“They spread out in so many directions that all efficiency was lost,” Poulsen said in a telephone interview. “The company had inherited this from Kjeld’s father, Godtfred, who was willing to try anything. At one point, he even considered building actual houses based on Lego bricks.”

Mounting Losses

Danske Bank A/S, Lego’s primary bank, stopped lending the company money in 2004 as its losses mounted. Kristiansen served on the bank’s board from 1997 to 2001.

“It was a big crisis,” Soeren Jakobsen, author of “Lego Legacy,” a book on the Lego heirs published in 2008, said by phone. “Lego’s main bank wouldn’t provide further loans and the family had to resort to financing the company with its own money and taking up a loan with a new group of banks.”

By 2004, disappointing sales, and competition from Hasbro and Mega Bloks, a competing toy line, resulted in Lego posting its third annual loss in five years. Kristiansen began to implement a turnaround plan, cutting 1,000 jobs and limiting product lines. He soon stepped aside, ceding control to a hand- picked management team led by Joergen Vig Knudstorp, who is now the company’s CEO.

Refocused Products

Knudstorp refocused the company’s product line and sold businesses he deemed unessential.

“At first I actually said, let’s not talk about strategy, let’s talk about an action plan, to address the debt, to get the cash flow,” he said in a 2011 Bloomberg Businessweek article. “But after that we did spend a lot of time on strategy, finding out what is Lego’s true identity. Things like, why do you exist? What makes you unique?”

In 2011, Kristiansen restructured the family holding company for succession planning. He reduced his economic interest in Kirkbi to just over half, with the remainder divided equally between his children, Danish newspaper Jyllands-Posten reported in a May 2012 interview with Kirkbi chief executive officer, Soeren Thorup Soerensen. The Kirkbi website lists each of the four Kristiansens as a shareholder with more than 5 percent of the company.

To calculate economic interest and dividend flows, the Bloomberg index applies a 51 percent stake in Kirkbi to the elder Kristiansen and splits the remaining 49 percent among the three children.