Posted on 06/29/2008 6:06:32 PM PDT by doug from upland
NOTE: for the record, I hold a considerable number of shares in Stan Lee Media and have a very keen interest in the $5 billion lawsuit against Marvel. My friend, Peter Paul, has been blamed for the collapse of the company. Although he was guilty of a 10b5 violation for trying to keep the price of the stock propped up, I hope that he will someday be vindicated. I believe he was an easy fall guy in this mess. Although it ran out of cash and filed bankruptcy, SLM had an asset worth tens of millions of dollars ---- Stan Lee's name, likeness, characters, etc. The rights of SLM were never asserted in the BK, and it was dismissed for cause in late 2006.
THIS YOUTUBE SHOWS A SMALL PART OF THE STORY AND HOW ASSETS WERE TAKEN FROM THE BK WITHOUT KNOWLEDGE OF THE JUDGE, TRUSTEE, CREDITORS COMMITTEE, OR SHAREHOLDERS.
You are going to be hearing much, much more about this case. Over three years ago, I spent considerable time in the Valley division of the Federal BK court in California looking over the SLM bankruptcy file. I was amazed that assets, named in the SLM 10K, were never listed as assets in the bankruptcy. This whole thing stinks to high heaven. This may become the largest bankruptcy fraud and conspiracy to defraud in history.
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Marvel's in for a Hulk of a Lawsuit - Barron's
by: SA Editor Eli Hoffmann
posted on: June 29, 2008 | about stocks: MVL
Barron's Bill Alpert (free) does some investigative reporting - and comes up with some serious questions about Marvel Entertainment (MVL).
Marvel - owner of more than 5,000 characters including Spider-Man, Iron Man, Hulk and X-Men - has made a spectacular comeback since its bankruptcy in 1998. Shares trade for $33, after earnings more than doubled in 2007 to $140M. This year Marvel began producing its own films, opening up a new source of revenue besides its bread-and-butter licensing segment.
Here's the issue: In 1998, controlling shareholder Isaac Perlmutter used bankruptcy procedures to cancel Marvel's $1M/year lifetime contract with Stan (The Man) Lee - which also voided Marvel's exclusive rights to Lee's characters. Lee left Marvel and started Stan Lee Media [SLM] with his friend Peter Paul; Paul put up $500K and Lee assigned to the company all his intellectual property.
In 2000, soon after underwriting a gala Hollywood fundraiser for Hillary Clinton's Senate campaign, Paul fell out of favor when previous felony convictions - for robbing the Cuban government (not a great idea) and for cocaine possession - came to light. This lead to Paul dipping into his margin account - in which he had booked profits gained by manipulating SLM's shares - in order to keep the company afloat. The SEC got suspicious and launched an investigation. Paul, who had fled to Brazil, [DFU NOTE - he did not flee to Brazil; he had not been indicted and took his family to Brazil to run his last remaining asset, a CD language translation company] was extradited, and currently awaits sentencing on stock fraud manipulation.
Meanwhile, Stan Lee abandoned Paul, and went back to Marvel for up to $1M/year and 10% of movie and TV profits.
But what of his characters? Lee now claims his creations were 'works-for-hire' and have always belonged to Marvel. But in 2002, Stan Lee sued Marvel, and was apparently paid $10M, claiming half-ownership of his characters due to the 1998 contract cancellation. If so, Stan Lee Media, now run by Jim Nesfield (star Eliot Spitzer insider-trading whistleblower), seems to have a legitimate claim to part-ownership in the characters.
Marvel rejects Paul's claims, and questions how much credence one should give to a man with a record the length of Paul's. Still, even if Stan Lee Media doesn't win the rights to half of Marvel's profits, their claims raise serious questions that should concern investors.
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Here's the contract Stan Lee signed with Stan Lee Media in October 1998. Note 4 a):
I assign, convey and grant to the Company forever, all right, title and interest I may have or control, now or in the future, in the following: Any and all ideas, names, titles, characters, symbols, logos, designs, likenesses, visual representations, artwork, stories, plots, scripts, episodes...
And here's his Nov. 1 1998 contract with Marvel. Note 5 a):
You hereby assign, convey and grant to Marvel forever throughout the universe all right, title and interest solely and exclusively which you may have or control or which you may have had or controlled in the following: Any and all ideas, names, titles, characters, symbols, logos, designs, likenesses, visual representations, artwork, stories, plots, scripts, comic books or comic strips, episodes...
5 b):
You hereby warrant that you have not assigned, licensed, pledged or otherwise hypothecated, nor attempted to do so any of the Property and Rights to anyone other than Marvel, its affiliates, predecessors or their designees and will not do so in the future.
The Comics Reporter summarizes some of the Stan Lee vs. Stan Lee proceedings.
Marvel strategic partners: Viacom's (VIA) Paramount distributes Marvel's films. Lions Gate Entertainment (LGF) produces direct-to-DVD films for Marvel. Hasbro (HAS) has exclusive toy rights for its characters. And Universal Studios (NBC) has created some heavy-duty theme-park attractions based on its characters, such as Florida's Marvel Super Hero Island and a Japan Spider-Man attraction.
So - are my marvel comic books from the 1970s going to put my kid through college?
They might. I hope the movies keep doing well, because half of that money is ours. :)
Official Press Release (I think this was some time last year)
NEW YORK—(BUSINESS WIRE)—Marvel Entertainment, Inc. (NYSE: MVL), reported that a claim was filed today in United States District Court for the Southern District of New York by Stan Lee Media, Inc. The claim against Marvel Entertainment alleges that nine years ago Stan Lee transferred to Stan Lee Media ownership of a number of Marvel comic book characters he co-created. Marvel believes that the claim against it is without merit and that it will prevail in this dispute.
Stan Lee Media was recently in bankruptcy and is being sued by Stan Lee. In his suit, Mr. Lee is challenging the legitimacy of the management of Stan Lee Media. Mr. Lee is a long-time employee of Marvel and its predecessor companies and currently serves as Publisher Emeritus of Marvel Comics. Mr. Lee commented that, “I do not support this action and believe the suit to be baseless.”
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Stan was obligated, pursuant to his contract with Marvel, to fight the takeover. Marvel’s quarterly report the the period ending June 30 should be interesting when it comes out in July or August. They will be obligated to report that a Colorado court (where SLM is incorporated) determined that Jim Nesfield and the investors had the votes necessary and their takeover of the company was valid.
Hey Stan, if everything was a work for hire, why did you sue Marvel to assert your rights? Why did Marvel make a settlement with you that includes profits and over a $10 million cash payoff? That will be interesting to explore in court.
Is that the same Peter Paul that was involved in the Clinton fund raiser scandals? Did he betray her-heinous?
But I'm not greedy, you can have half. ;-)
Warning - don’t rent Stan Lee DVDs - especially if you think they are OK for kids. I rented one that had a comic book like figure on the front and was watching it with my son and became horrified at the violence in it. Somehow they don’t have a rating.
bfl
Half is what we want. Stan has a 1/2 interest in the characters he created. He assigned everything to which he had rights in the known universe to SLM.
From everything I have read about this case, that sounds like a reasonable request. Do you have any idea how long the lawsuit might be tied up in court?
Same guy. And that case is still proceeding toward court. We hope that HILLARY! UNCENSORED -— http://video.google.com/videoplay?docid=7007109937779036019&pr=goog-sl -— helped to stop her. The 13-minute segment available on the internet was seen by over 8 million people.
I think some of you may find this info interesting.
As chairman and chief creative officer of the company, this is what Stan told the SEC and investors in his 10K annual report for 1999. http://www.secinfo.com/dsVsb.5Dg.htm Go down to 6th page of 69.
Read below. Stan claimed the following: “Stan Lee’s co-creations include Spider-Man, The Incredible Hulk, X-Men, The Fantastic Four, Iron Man, Daredevil, Silver Surfer and Dr. Strange.” How can he now say that the works were work for hire?
from the 10K -—
EMPLOYMENT AND SERVICES AGREEMENTS: The Company entered into a lifetime employment agreement with Stan Lee in 1998 in consideration for the assignment and transfer of all of Mr. Lee’s right, title and interest in and to any and all ideas, names, titles, characters, symbols, logos, designs, likenesses, visual representations, artwork, stories, plots, scripts, episodes, literary property, and the conceptual universe related thereto, including his name and likeness. Mr. Lee’s services for and on behalf of the Company shall be exclusive with the exception of those services provided under a lifetime agreement with Marvel Enterprises, Inc., which shall require no more than an average of 10-15 hours per week on its behalf. The employment agreement provides for base salary compensation of $250,000 annually, a discretionary bonus as determined by the company’s board of directors, stock options equal to the highest number of options offered to company executives, reimbursement of certain business expenses, including without limitation, business-related travel and entertainment expenses, and a term life insurance policy in the minimum principal sum of $2 million.
UNIQUE COMPANY ASSETS Our primary assets consist of all the intellectual property currently owned by our founder Stan Lee, including ownership in perpetuity to Stan’s name, likeness, brand and signature slogans, “Stan Lee Presents,” “Excelsior!” and “Stan’s Soap Box,” along with rights to all intellectual property that will hereafter be created by Stan Lee. Known to millions as the man whose Super Heroes propelled Marvel Comics to its preeminent position in the comic book industry, Stan Lee’s co-creations include Spider-Man, The Incredible Hulk, X-Men, The Fantastic Four, Iron Man, Daredevil, Silver Surfer and Dr. Strange. Now, in the 21st Century, Stan Lee is broadening his horizons once more, this time, into cyberspace. His Marvel creations have inspired thousands of Super Hero fan sites throughout the web, representing millions of web page references. Now his fans and admirers may meet the newest cutting-edge Stan Lee characters in The 7th Portal, which has been launched on shockwave.com and will later be featured on our stanlee.net website. In addition, Stan’s fans can visit stanlee.net to read a regularly updated Stanzine with games, goofs and features from Stan and his staff.
REUTERS UK
Legal fights could hurt Marvel -Barron’s
Sun Jun 29, 2008 11:19pm BST
NEW YORK, June 29 (Reuters) - Shares of Marvel Entertainment Inc (MVL.N: Quote, Profile, Research) are up more than 20 percent since the beginning of the year, but the comic-book publisher could run into legal trouble, financial weekly Barron’s reported.
Litigation stemming from the company’s earlier agreements with bankrupt dot-com Stan Lee Media may raise factual questions about Marvel’s title to its billion-dollar character franchises, Barron’s reported in its June 30 edition. (Reporting by Emily Chasan; Editing by Braden Reddall)
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