"Lionel press release above." I have no doubt that to avoid proceeding with an expensive lawsuit, Grubba (and Klein) agreed to the stipulations made. The agreement fell apart later. Whether it was strictly true or not that Grubba and/or Klein knew Pierson was going to use Lionel's intellectual property is an entirely separate issue. Just as in criminal cases defendants sometimes settle for pleading to a lesser charge even though they are innocent, to avoid even more severe penalties should they go to trial. Happens regularly. We just cannot and probably never will know whether Klein and Grubba knew what Pierson was going to do.
In any case, my purpose wasn't to re-litigate the MTH or Lionel lawsuits, but to point out that Bob Grubba has never been found liable by a judge and/or jury nor has he been criminally charged. This was a negotiated pre-trial settlement that Lionel won. The presumption of innocence should prevail. His reputation has taken quite a beating in the third rail O gauge hobby, and I'd say it's mostly hearsay and slander/libel until proven otherwise in a legal proceeding. He's also providing "best in class" models in HO and N in many instances as well. This serves the hobby better than lawsuits, especially lawsuits (you know the ones) that represent pique, jealousy or sore losing more than substance, of which we've had a few. Thankfully not recently. In summary, give peace a chance. 
