LOS ANGELES--(BUSINESS WIRE)--Oct. 8, 2009-- EMAK Worldwide, Inc. (OTC: EMAK) announced that it will defend vigorously against a shareholder lawsuit that was filed September 29, 2009 in the Los Angeles Superior Court of the State of California. The defendants in this lawsuit are the Company and certain current and former members of its Board of Directors. This suit is brought on behalf of a group of plaintiffs that includes Donald Kurz, EMAK’s former CEO and a significant shareholder.

“The Company considers this complaint to be a misguided and frivolous effort. It is yet another costly and destructive action involving a disgruntled former employee of the Company. Since being ousted as CEO by EMAK’s Board in 2005, Kurz has made numerous attempts to gain control of EMAK, including a failed proxy contest in 2006. The Board considers this to be another attempt to baselessly discredit its members and EMAK's management team for personal gain, as evidenced by the suit's attempt to recover funds for Kurz and the other plaintiffs personally. By inviting him to rejoin the Board in June, after extending at least three prior invitations following his precipitous resignation from the Board in August of 2005, our hope was that Kurz would make a positive contribution to EMAK's business challenges instead of simply continuing what appears to be a personal vendetta. As a large shareholder myself, I find this complaint bizarre,” said Stephen Robeck, EMAK’s Chairman of the Board.

The Company believes that the allegations are without merit and intends to defend vigorously against the claims and causes of action asserted in this legal matter. For example, the plaintiffs' allegations regarding a failure to sell the Company in 2005 are utterly baseless, as EMAK never received an offer to buy the Company at any price, let alone at $15.00 per share. In addition, the Company is investigating possible claims against Kurz based on what the Company believes are his recent breaches of his fiduciary duties as a Director of EMAK.

Peter Ackerman, Managing Director of Rockport Capital Inc. and EMAK’s preferred stockholder, commented, "I am disappointed that Kurz felt compelled to file a lawsuit that in my estimation is without merit. If allowed to focus, this management is fully capable of growing EMAK's business and creating value for all shareholders. This lawsuit, therefore, should be withdrawn so as not to burden management with unnecessary distractions."

EMAK’s CEO Jim Holbrook added, “It is also lamentable that Kurz feels the need to continue to attack the Company that he failed when he was its CEO. He has cost EMAK and its shareholders well over a million dollars in legal fees since his departure, hard-earned money that would have been much better spent investing in our growth areas. We look forward to this ridiculous suit being dismissed in the near future.”

About EMAK Worldwide, Inc.

EMAK Worldwide, Inc. is the parent company of a family of marketing services agencies including Equity Marketing, Logistix, Neighbor and Upshot. Its agencies are experts in “consumer activation” by offering strategy-based marketing programs that directly impact consumer behavior. The agencies provide strategic planning and research, consumer insight development, entertainment marketing, design and manufacturing of custom promotional products, kids marketing, event marketing, shopper marketing and environmental branding. The Company’s blue-chip clients include Kellogg, Kohl’s, Kraft, Macy’s, Procter & Gamble and Safeway, among others. Headquartered in Los Angeles, EMAK has offices in Chicago and Hong Kong. More information about EMAK Worldwide is available on the Company’s website at www.emak.com.

Certain expectations and projections regarding the future performance of EMAK Worldwide, Inc. discussed in this news release are forward-looking and are made under the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These expectations and projections are based on currently available competitive, financial and economic data along with the Company’s operating plans and are subject to future events and uncertainties. Management cautions the reader that the following factors, among others, could cause the Company’s actual consolidated results of operations and financial position in 2009 and thereafter to differ significantly from those expressed in forward-looking statements: the Company’s dependence on a single customer; the significant quarter-to-quarter variability in the Company’s revenues and net income; the Company’s dependence on the popularity of licensed entertainment properties and the ability to license, develop and market new products; the Company’s dependence on foreign manufacturers; the Company’s need for additional working capital; the negative results of litigation, governmental proceedings or environmental matters; and the potential negative impact of past or future acquisitions. The Company undertakes no obligation to publicly release the results of any revisions to forward-looking statements, which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The risks highlighted herein should not be assumed to be the only items that could affect the future performance of the Company.

Source: EMAK Worldwide, Inc.

At EMAK Worldwide, Inc.:
Media and investor inquiries:
Jim Holbrook, Chief Executive Officer
323-932-4068