Well if they are convicted of fraudulently withholding money and using bad accounting practices to hide liabilities and the rest of the stuff then there's no defending them. However I'd like to remind people at this moment all it is, is just an allegation - and in the majority of the civilised Western world people are assumed to be innocent until proven guilty.
I know there are a lot of people who hate 4Kids as demonstrated from this thread and even the comments on that hollywoodreporter article and will pounce at any oppurtunity to pour scorn at them and bring up the now infamous "riceball into doughnut" incident but they really ought to refrain from passing judgement until the case is over and a decision made. Unless they know something that no one else knows (in which case they really should pass that on to the authorities) then you're just looking silly and frankly childish making verdicts of their guilt, even more so if they turn out to be innocent in all this.
Either way by the looks of it, it was the executives and managing directors, basically the higher ups who were being greedy and shady (again I stress if true) not the day to day staff in charge of actually producing the dubbed animation. Unfortunately it seems that the hardworking teams that have worked hard to deliver an excellent product to many viewers in the West may have to suffer due to the incompetence of a few. People really need to show more tact and class then make comments "rejoicing this" or I quote from the comments section in that article, "Yay! Good riddence!" & "HA! It serves 4Kids right."
EDIT - Also I don't know why people are using the fact that they managed to acquire all the subsidary rights to Pokemon very cheaply (too cheaply in hindsight) as a stick to beat them up with. That's just business; they made an offer to the Japanese company, which they apparently didn't check throughly and just accepted it (probably never in a million years anticipating it's eventual popularity) - which as they admit is their fault and mistake so I don't understand why Pokebeach are describing 4Kids actions as "questionable". It only appeared to be a mistake in hindsight after the popularity of Pokemon exploded in the West. Pokemon could have easily been a failure in which case 4Kids would have lost $10 million and the Japanese company would be laughing that they'd managed to con a lot of money from some American suckers. Like any business, they took a risk and for them it spectacularly paid off.
Right, as I threw in the Pokebeach commentary for potential context. And I wasn't thrilled with the OP's comments, either, especially, as you rightfully observed, "who knew Pokemon would be the juggernaut, vis-a-vis, the deal at the time?" I was more focused on Kelts' ancedote, rather than the Pokebeach OP, anyway. (Besides, the issue was more on the TPCI takeover and the money issue, anyway.)
Fairness and truth is the goal here, both the good and the bad. 4Kids may have done things beyond anyone's sole control, which happens in our current economy, and they may have done some untoward things, as well. (Even the untoward items have to be acknowledged in proper context with everything else. Truth matters most, doesn't it? Again, as you noted with your edit about the '98 deal. Harsher in Hindsight, but, hell, I didn't think Pokemon would be so popular, at the time, either.) We don't know, as, frankly, we're getting either secondhand accounts, or to go with Allstair, depends on the media source you trust.
You are also correct in that it is supposed to be innocent until guilty, which is why I'm not going to freak about the fraud issue until real proof surfaces. (I only added the THR link for clarity's sake.) I'm not an economics expert, so I just want to report the news, and leave it up for everyone else. (If I'm going to sound childish or engage in wankery, I'll go with a topic I have more knowledge of. Heh.)
I didn't say it in my first post, but I was quite curious about the Pokemon fandom's reaction. 4Kids deserves its criticism, yet I never was one to wish them out of existence, either. I understand the negativity, but, as you said, we could live without the schadenfreude.
Frankly, I didn't even know about the YGO issue or any of this until yesterday. I knew their stock was down, but I never thought "ZOMG! Bankruptcy!" Under Chapter 11, they can hopefully reformat and have a chance to come back.
Edit: In case if my previous post whipped up any unneeded frenzy, my apologies. Certainly wasn't my intent, at the time. Anyway, I definitely second all of what Allstair said.