Historical Overview & Timeline
Stan Lee is world renowned as a creative genius responsible for creating Spider-Man, The Incredible Hulk, Thor, Iron Man, the Fantastic Four, X-Men, and many other comic book icons.[link] In 1998, Lee co-founded a company that later became Stan Lee Media, Inc. (“SLMI”).
In July 1998, Bankruptcy Court records show that Marvel rejected and repudiated Lee’s employment contract during Marvel’s bankruptcy.[link][link] After Marvel rejected Lee’s contract, Lee was free to exploit his characters. As a result, Lee invested and assigned all of his intellectual property to SLMI in order to exploit the characters he created in new and traditional comic book media.
In October 1998, Lee executed an assignment[link] of all his intellectual property to SLMI, including his name and any rights to characters he had previously created – such as Spider-Man, The Incredible Hulk, Thor, Iron Man, the Fantastic Four, and X-Men (the “October 1998 Assignment”).[link]
In exchange for the October 1998 Assignment,[link] Lee received SLMI shares and a lifetime salary.
From the beginning, SLMI operated under the “direction” of Lee – and Lee was SLMI’s Chairman, Chief Creative Officer, and largest shareholder.[link]
In order to attract shareholder investment in SLMI, Lee executed a ratification[link] of the October 1998 Assignment in October 1999. SLMI filed the October 1999 ratification[link] with the SEC when SLMI initiated its “IPO” (initial public offering), and SLMI investors poured millions into SLMI.
The October 1998 Assignment[link] to SLMI is the only assignment of Lee’s rights recorded with the U.S. Copyright Office. Under the Copyright Act, 17 U.S.C. § 205(d), the first-in-time recorded assignment prevails in a case of competing assignments.
Lee continued to direct and control SLMI and was the Company’s controlling shareholder when SLMI achieved a $300 million market cap on NASDAQ.[link]
SLMI’s SEC disclosures filed in 2000, signed by Lee as Chairman of the Company, contained the October 1998 Assignment and the October 1999 Ratification.[link]
Shortly thereafter, SLMI spiraled out of control under Lee’s direction, and SLMI’s management (with Lee’s knowledge and approval) put SLMI into bankruptcy on February 16, 2001.[link][link]
Thereafter, while Lee still maintained control of the Company, the SEC delisted SLMI,[link] the State of Colorado administratively dissolved the Company, [link] and Lee and others emptied the Company of its assets.
Under the October 1998 Assignment,[link] SLMI’s assets include the right to commercialize Lee’s name and image. When SLMI entered bankruptcy, its assets included all of Lee’s intellectual property and other assets such as Conan the Barbarian.[link][link] During SLMI’s bankruptcy, neither the October 1998 Assignment nor the October 1999 Ratification was disclosed in the company’s asset schedules.
Notwithstanding the October 1998 Assignment and the “stay” imposed by the United States Bankruptcy Code on claims to a bankrupt company’s assets during the SLMI bankruptcy, Lee commercialized his name on various projects such as “Stan Lee’s Stripperella.”
In 2002, Lee sued Marvel in a lawsuit known as Lee v. Marvel[link] to obtain the profits from Spider-Man, the movie.
In Lee v. Marvel[link], Lee claimed that he assigned the rights to Spider-Man, The Incredible Hulk, X-Men and others to Marvel in November 1998.[link]
In 2006, the bankruptcy court dismissed the SLMI bankruptcy case.[link]
After years of shareholder activism (commencing in 2007 after the bankruptcy court dismissed SLMI’s bankruptcy case), on May 27, 2010 the Colorado Court of Appeals handed SLMI shareholders a victory – defeating attempts by Lee and others to block SLMI from electing an independent Board of Directors to act in the best interest of SLMI’s shareholders.[link]
Lee sought to overturn the Court of Appeals decision and lost.[link]
Meanwhile, in federal court in California, Lee and his company POW! Entertainment suffered a major setback when federal Judge Stephen V. Wilson in January 2009 voided Lee’s previous attempt to remove SLMI assets out of the SLMI bankruptcy.[link]
Shareholders were not successful in a New York action challenging Lee’s management due to lack of standing. [link]
Lee controls POW! Entertainment and, in turn, POW! employs former SLMI officers who acted at Lee’s direction during the SLMI bankruptcy and remain loyal to Lee.[link][link][link]
On July 8, 2010, SLMI’s Board of Directors retained the law firm of Dunnington, Bartholow & Miller LLP as Company counsel to investigate SLMI’s claims and identify the extent of its missing assets.[link]
SLMI is now asserting ownership of Lee’s rights in the characters Spider-Man, The Incredible Hulk, Thor, Iron Man, the Fantastic Four, X-Men and many others in an action in New York. [link] [link][link]
SLMI is also pursuing its rights under the October 1998 Assignment from Lee to SLMI in California before the Hon. Stephen V. Wilson.[link]
