Toys R Us Backs Down in 2007 First Baby Contest

Yuki Lin's parents saw her arrival in the world at the stroke of midnight on New Year's Day as good fortune. "She's a lucky baby, and she will bring us luck," Yan Zhu Liu, her proud mother, announced.

But her status as America's first baby born in 2007 sparked a furious dispute over a $25,000 (£12,000) prize and allegations of racism levelled at one of the country's biggest companies, Toys R Us.

The problem was that while Yuki became a US citizen by birth, her parents are not. And after originally declaring that the New York couple had won the money, Toys R Us announced that the sweepstake was open only to legal residents and withdrew the prize from Han Lin and Yan Zhu Liu, both 22-year-old restaurant workers.

"She was deprived of $25,000 intended to be used for her college education because of who her parents are," said Albert Wang, a New York lawyer who accused Toys R Us of treating Chinese-Americans as second-class citizens.

Yesterday the New Jersey company announced that it was backing down and would award a $25,000 savings bond to three babies in the final pool.

The winners are Yuki, who was born in Manhattan's Downtown hospital weighing 2.9kg (6.5lb); Yadira Esmeralda, born in the Southside hospital in Bay Shore, New York, and Jayden Swain of Gainesville, Georgia, who arrived 19 seconds after midnight and who was announced the winner when Yuki was disqualified.

"We love all babies," Toys R Us said in a statement. "We deeply regret that this sweepstake became a point of controversy. As a result, we have decided to award all three babies in the grand prize pool a savings bond."

"Justice has been done," said Mr Wang, who told the New York Times some people feared the controversy would expose the Chinese couple's immigration status and leave them at risk of being deported.