The company is alleging breach of contract and seeking more than $10 million in damages in its New York state lawsuit, Bloomberg News reported. It said the suit cited the pop star, her management company Atom Factory and Universal Music Group-owned merchandising firm Bravado International Group as defendants.
MGA Entertainment's complaint says that it agreed to produce dolls in Lady Gaga's image in Dec. 2011 at Bravado's "request and insistence" and paid the company a $1 million fee amid plans to ship the dolls to retailers this summer ahead of the important holiday selling season, according to Bloomberg.
But in April, Bravado told MGA that Lady Gaga wanted to delay production and shipping until her new album release in 2013, it cited from the complaint. MGA estimated $28 million in revenue for the fall 2012 retail season from the Lady Gaga dolls, Bloomberg also cited from the complaint.
MGA claims that final approval has been delayed to push back the launch and marketing of the dolls until next year. The complaint says the toy company paid "an excessively generous royalty rate, invested millions in the preproduction of the Lady Gaga dolls and put its reputation and goodwill on the line in order to secure distributors and retail shelf space," Bloomberg said.