Franklin Mint Case Settlement Is Rejected

Franklin Mint Corp.’s $25-million settlement with the Diana Princess of Wales Memorial Fund to end a malicious-prosecution case Franklin brought against the fund was rejected by a California appeals court.

The lower court’s determination that the settlement was in good faith can’t be upheld because the “parties failed to set a value for the settlement, and failed to present competent evidence proving a value,” the Los Angeles appeals court said in a July 6 ruling.

Franklin Mint, a closely held maker of collectibles, had countersued the fund and law firm Manatt, Phelps & Phillips over a 1998 lawsuit aimed at stopping Franklin Mint from making Princess Diana memorabilia. Franklin Mint in 2000 won $2.3 million in lawyers’ fees from the charity after a federal judge dismissed the suit.

To settle Franklin Mint’s malicious prosecution suit, Franklin and the trustees of the Diana fund had agreed, among other things, that the fund would pay $1 million to a charitable foundation controlled by Franklin Mint and its owners, Stewart and Lynda Resnick. The fund would make $24 million in grants to jointly approved charities.

The law firm asked the court to allow the $25 million to offset any damage awards imposed against it, and the judge agreed. Franklin Mint appealed.

The appeals court overturned the decision because the bulk of the money would go to charities approved by Franklin and the Diana fund, not to Franklin itself.

Fiona Posell, a spokeswoman for Roll International Corp., the Los Angeles-based parent company of Franklin Mint, declined to comment.

Christopher Tayback, a lawyer for the Diana Princess of Wales Memorial Fund, and Manatt Phelps’ attorney, Mark Lee, didn’t immediately return calls to their offices.