David Lane, who successfully exported an American version of Noddy to the United States, is being sued by Chorion, the company that owns the rights to the characters, for allegedly disclosing confidential information in relation to the bid.
Mr Lane resigned as a director of Chorion last September. He launched his bid soon afterwards using the American investment bank Bear Stearns. He was rebuffed by Chorion's board, led by John Conlan, chairman, and Nick Tamblyn, managing director.
Mr Lane was bidding for the intellectual property rights to more than 600 stories by Enid Blyton, which Chorion's predecessor bought from the writer's family for pounds 14m in 1996.
The bid also included Agatha Christie's oeuvre, which the company bought from the food giant Booker for pounds 10m last year.
Chorion is demanding damages for breach of contract, compensation for breach of fiduciary duty and breach of confidence, and damages for interfering with the company's affairs by unlawful means. Mr Lane is understood to be contesting the action. Mr Lane and Chorion both declined to comment on the case.
Mr Lane joined the board of Chorion, the renamed Trocadero company, in July 1997 at the same time as Mr Conlan and Mr Tamblyn arrived from Allied Leisure.
Mr Lane became managing director of Enid Blyton Ltd, the company which owns the rights to the famous children's writer's books, where he was widely credited with securing a highly lucrative television deal for an American Noddy.