Toy Maker Loses Bid for COVID-19 Coverage in Calif. Federal Court

LOS ANGELES — A toy manufacturer is not covered for business interruption losses caused by the COVID-19 pandemic and related government restrictions because it did not sustain “direct physical loss of or damage to property,” a California federal judge has ruled.

In a July 2 order, Judge Michael W. Fitzgerald of the U.S. District Court for the Central District of California dismissed the case with prejudice, rejecting MGA Entertainment Inc.’s argument that loss of use or access to property constitutes physical loss.

MGA makes children’s toys under the brand names Bratz, Little Tykes and LOL Surprise!, with 65 percent of …