RC2 increases the cost of recall

Oak Brook toy maker RC2 Corp. said Thursday it will record a $4 million charge during its second quarter related to a recall of some wooden railway toys -- a figure that is more than double a previous estimate.

RC2 voluntarily recalled 26 types of wooden railway toys from its Thomas & Friends Wooden Railway line last month following an internal investigation that showed certain paint colors contained lead. The paint was used by a supplier in China.

Previously, the company had expected a second-quarter charge between $1 million and $2 million for the recall.

RC2 also said it anticipates profession service fees, air freight, returns and replacement processing, marketing and promotional costs related to the recall to be between $3 million and $4 million in the second half of 2007.

Chief Executive Officer Curt Stoelting said the company was encouraged by "the high recovery levels of recalled products."

"Nothing is more important to us than child safety," he said in a statement.

The recalled toys were sold at stores throughout the country from January 2005 through June 2007.

Last month, Seattle-based law firm Hagens Berman Sobol Shapiro filed two class action suits against RC2, saying the company should be liable for the recall and held financially responsible for any blood and diagnostic medical tests for children who have come in contact with the lead-tainted toys.

A RC2 spokeswoman said about 1.5 million toys are affected by the recall.