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Stan Lee has reached an agreement ending a legal dispute with two former shareholders of POW! Entertainment that threatened the future of his company, Hollywood Esq. reports. The terms of the deal are confidential.
POW! was formed in 2001 following Lee’s departure from bankrupt dot-com Stan Lee Media, and went public three years later through a reverse merger with Arturion Entertainment, a shell corporation controlled by public relations consultant Valerie Barth and UltaVision Inc. director Ron Sandman.
All seemed to go well, with Barth even working as Lee’s PR representative (she asserts she was instrumental in the creator receiving his star on the Hollywood Walk of Fame). But then last year POW! sued Barth and Sandman for breach of contract and fraud; the two struck back in May with a counterclaim accusing Lee and POW! executives Gil Champion and Arthur Lieberman (who passed away May 1) of conspiring to inflate the worth of the media company at the time of the reverse merger. They alleged Lee and his partners misrepresented POW!’s assets and provided documents demonstrating that the company controlled Lee’s intellectual property, including his name and likeness, and downplayed threats of litigation. (That same intellectual property forms the core of Lee’s complicated ongoing legal fight with Stan Lee Media.) In addition to $3.6 million in compensatory damages, Barth and Sandman sought the removal of POW!’s board of directors, and the transfer of shares.
According to documents filed with the U.S. Securities and Exchange Commission, POW! Entertainment generated just $24,628 in net income in 2011; the previous year, the company saw a $1.1 million net loss.
Legendary writer and editor Stan Lee, seemingly a magnet for lawsuits, has been drawn into yet another legal battle, one that could leave the future of his POW! Entertainment in question.
According to Hollywood, Esq., Lee and POW! executives Gil Champion and Arthur Lieberman, among others, have been sued for $3.6 million by two people who claim there was a conspiracy to inflate the worth of the media company’s assets at the time of a reverse merger in 2004 that allowed POW! to become publicly traded without slogging through the lengthy registration process.
Making the lawsuit more complex, or at least more dicey, is that one of the plaintiffs, Valerie Barth, worked for years as Lee’s public relations representative, and asserts she was instrumental in the creator receiving his star last year on the Hollywood Walk of Fame.
The claims are rooted in Lee’s departure in 2001 from the bankrupt dot-com Stan Lee Media — that company has its own winding history of lawsuits involving, at various times, its namesake, Marvel and Conan the Barbarian, among others — to form POW!, which in the past decade has struck deals with such companies as Disney, Archie Comics and BOOM! Studios. Three years later a reverse merger with a shell corporation called Arturian Entertainment allowed POW! to immediately go public.
Stan Lee Media, which just last month lost its bid to reclaim the rights to Conan the Barbarian, has been dealt another setback as an appeals court upheld a lower court’s decision preventing the failed dot-com from intervening in Stan Lee’s decade-old lawsuit against Marvel as part of an effort to gain control of the writer’s most famous co-creations.
However, Hollywood, Esq. reports the company hopes today’s ruling by the 2nd Circuit Court of Appeals will pave the way for pending action in California against its namesake and co-founder, whom it claims improperly transferred rights to such characters as Spider-Man, the X-Men, Iron Man, the Avengers and Thor from Stan Lee Media to Marvel. A judge had stayed the lawsuit last year pending the 2nd Circuit decision.
Lee sued Marvel back in 2002, claiming the company breached a conditional assignment of his copyright in Spider-Man when it failed to pay him 10 percent of profits from Columbia Pictures’ Spider-Man movie. He received a partial summary judgment before entering into a confidential agreement with Marvel. Stan Lee Media attempted to intervene in the dispute as the real party of interest, but was rejected by the judge because the company had gone into bankruptcy the previous year, and none of the shareholders could demonstrate they had legal standing or the authority to represent SLM.
A federal judge has dismissed a bid by Stan Lee Media Inc. to reclaim the rights to Conan the Barbarian, which the failed dot-com briefly held before going into bankruptcy in 2001. However, a bigger legal brawl still lies ahead, when the company appears before the 2nd Circuit Court of Appeals on March 8 to argue it should be allowed to pursue the rights to Spider-Man, the Fantastic Four, The Avengers and other lucrative Marvel properties.
Stan Lee Media, which operates independently of its namesake and co-founder — in fact, it’s suing Stan Lee — has struggled since emerging from bankruptcy in November 2006 to regain some of the money and glory from the heyday of the Internet bubble, primarily through lawsuits claiming the improper transfer of intellectual properties.
In the Conan lawsuit, filed in August even as Conan the Barbarian 3D arrived in theaters, the company claimed, in part, that when Conan Sales Co. bought back the rights to the Robert E. Howard characters in 2002, shareholders weren’t notified, and SLM’s interests weren’t properly represented. The complaint also alleged that Arthur Lieberman, Lee’s longtime attorney, committed fraud during the proceedings, and failed to report conflicts of interest. As a result, SLM argued, the transfer of the rights to Conan Sales Co., which subsequently sold them to Paradox Entertainment, should be annulled.
Publishing | On the heels of Monday’s direct-market overview for March, ICv2 has released its sales estimates for the month, placing the top-selling FF #1 at 114,472 copies — more than 37,500 ahead of the No. 2 title, Green Lantern #64. The retail news and analysis site notes that the relaunched FF #1, aided by variant covers, joins the Human Torch-killing Fantastic Four #587 as the only titles to sell more than 100,000 copies in the past six months.
While 11 of the Top 25 comics saw sales increases, if only slight, the graphic novel category looked decidedly more grim, with just the third volume of The Unwritten and Batman and Robin: Batman Reborn breaking the 4,000-copy mark. [ICv2.com]
Crime | Los Angeles police have recovered a copy of Action Comics #1 stolen from the home of actor Nicolas Cage in 2000. The 1938 comic, worth as much as $1.5 million, was discovered last month by an unidentified man who claims to have bought the contents of an abandoned San Fernando Valley storage locker. It’s now in an LAPD evidence safe while the department’s art details detectives try to track down the thieves, but Cage says he can’t wait to get the comic back. “It is divine providence that the comic was found and I am hopeful that the heirloom will be returned to my family,” he said in a statement. [Ventura County Star, Los Angeles Times]
Little more than a week after one judge had seemingly ended a decade-old dispute between Stan Lee Media and Stan Lee and Marvel, another court is reviving it.
THR, Esq. reports that U.S. District Judge Stephen Wilson is allowing the new board of failed dot-com Stan Lee Media to file a new consolidated complaint against Lee, alleging that he improperly transferred rights to such characters as Spider-Man, the X-Men, Iron Man, the Avengers and Thor from SLM to Marvel.
The original $750-million lawsuit — that was about half of the estimated proceeds from Marvel’s movies — was filed against Lee and Marvel in January 2009 by two SLM shareholders who were later determined to lack standing. An appeal was dismissed in December 2010, followed early this month by a ruling that the plaintiffs’ motions were time-barred, as they come a decade after the alleged injury. But now a newly elected board of directors has successfully petitioned Wilson to permit the complaint to move forward, this time only against Lee, QED Productions and POW! Entertainment. Marvel and DC aren’t named in the lawsuit.
As confusing as the case’s journey through the courts has been, it’s nothing when compared to the complicated backstory: In 1998, Marvel CEO Isaac Perlmutter used bankruptcy procedures to end Marvel’s $1 million-a-year lifetime contract with Lee, negating Lee’s assignment to the company of his rights to his co-creations. It also freed Lee to form Stan Lee Entertainment (which later merged with Stan Lee Media) with now-infamous entrepreneur Peter F. Paul. The company filed for bankruptcy in February 2001, and emerged from protection in November 2006. The lawsuit — and the $5-billion one that came before it, in March 2007 — hinged on a sequence of events that took place between August 1998, when Marvel terminated Lee’s employment, and November 1998, when Lee entered into a new agreement with the company and signed over his likeness, and any claims to characters. Representatives of SLM previously have claimed that on Oct. 15, 1998, Lee transferred to that company rights to his creations and his likeness.
Stan Lee Media is seeking unspecified punitive or exemplary damages, a declaration of the company’s rights and an injunction against further infringement.
Publishing | The 61st volume of Eiichiro Oda’s insanely popular pirate manga One Piece sold more than 2 million copies in its first three days of release, according to the Japanese market-survey firm Oricon. It’s the fastest-selling book in the Oricon chart’s nearly three-year history, breaking the previous record set by the 60th volume of One Piece, which sold more than 2 million copies in four days. [Anime News Network]
Retailing | Heidi MacDonald talks to Dave Bowen, Diamond’s director of digital distribution, about the newly announced deal with iVerse Media that will allow retailers to sell digital comics in their stores: “The retailer will login using their Diamond retailer login and be presented with the opportunity to create store-specific, item-specific codes in whatever quantities they need. Then we’ll use some approved cryptographically secure method to generate random codes for the retailer to use. And we’ll format those in a PDF which they can then print out. Likely what will happen is, it’ll print easily on Avery 30-up laser labels. So what you have is a sheet of Avery laser labels with a bunch of different books and codes on individual labels. In that case the retailer takes that material and secures it and then when someone wants Transformers #16 they simply ring the sale and give the label or sticker or cut-out to the consumer. [...] It’s really very simple. Then the consumer that has that code, which is live, they could literally step out of the line, pull out their iphone or ipad or whatever other device and redeem the code and begin reading the material.” Meanwhile, Todd Allen dissects what he describes as “a particularly silly digital download scheme.” [The Beat, Indignant Online]
Awards | Jeff Lemire’s acclaimed Essex County was the first finalist eliminated Monday in the Canada Reads literary debates to select the essential Canadian novel of the decade. Despite a defense by musician Sara Quin, the graphic novel was voted down by the five-person celebrity panel after the first hour, not because of content but because of format: Four of the judges just couldn’t get past Essex County‘s “lack of words.” This year marked the first time that a graphic novel had been a finalist for the prestigious Canada Reads program.
“Well, I was the first book voted off of the Canada Reads competition today, and I’ll admit that it stings a bit more than I thought it would,” Lemire wrote on his blog. “But, in the end I am really proud of the accomplishment of making it to the final 5. It’s a great sign for the future of graphic novels in this country, and their continued acceptance mainstream literary circles on a whole.” [Afterword, CBC News]
A federal judge on Wednesday dismissed a $750-million lawsuit against Stan Lee and Marvel Entertainment over character rights and movie profits, Variety reports.
The lawsuit, filed in January 2009 by Stan Lee Media shareholders Jose Abadin and Christopher Belland, accused Lee of improperly transferring rights to characters like Spider-Man, Iron Man and the X-Men from the now-defunct company to Marvel in 1998. According to the claim, the defendants denied shareholders of the failed dot-com their rights to 50-percent ownership of Lee’s co-creations at Marvel. Abadin and Belland argued they, as shareholders, were owed $750 million in profits from movies based on Lee’s characters.
The suit has a complicated backstory, of course: In 1998, Marvel CEO Isaac Perlmutter used bankruptcy procedures to end Marvel’s $1 million-a-year lifetime contract with Lee, negating Lee’s assignment to the company of his rights to his co-creations. It also freed Lee to form Stan Lee Entertainment (which later merged with Stan Lee Media) with now-infamous entrepreneur Peter F. Paul. The company filed for bankruptcy in February 2001, and emerged from protection in November 2006. The lawsuit — and the $5-billion one that came before it, in March 2007 — hinged on a sequence of events that took place between August 1998, when Marvel terminated Lee’s employment, and November 1998, when Lee entered into a new agreement with the company and signed over his likeness, and any claims to characters.
On Wednesday U.S. District Court Judge Paul A. Crotty rejected the lawsuit, in part because Abadin and Belland didn’t acquire shares of Stan Lee Media until 1999, meaning they lacked standing. Further, securities claims against Lee already were settled. Crotty also rejected the plaintiffs’ copyright claims, citing the statute of limitations, and noted that Lee’s “lifetime” contract with Stan Lee Media violated California labor laws, which limits such agreements to seven years.
Update: Eriq Gardner at THR, Esq. has more details.
Shareholders of Stan Lee Media on Monday sued Marvel Entertainment, Stan Lee and others for more than $750 million — about half of the estimated proceeds from Marvel’s movies.
Also named are Marvel Entertainment Chairman Isaac Perlmutter and former Marvel Studios CEO Avi Arad.
The suit, filed in federal court in New York City, accuses the defendants of denying shareholders of the failed dot-com their rights to 50-percent ownership of Lee’s co-creations at Marvel.
A Marvel spokesman told The Associated Press that the lawsuit is filled with “ridiculous claims.”
This is only the latest round in a dispute that dates back to 1998, when Perlmutter used bankruptcy procedures to end Marvel’s $1 million-a-year lifetime contract with Lee. That negated Lee’s assignment to the company of his rights to creations such as Spider-Man, The X-Men, Iron Man and The Hulk.
However, it also freed Lee to form Stan Lee Entertainment (which later merged with Stan Lee Media) with now-infamous entrepreneur Peter F. Paul. The company filed for bankruptcy in February 2001, and emerged from protection in November 2006.
The lawsuit — and the $5-billion one that came before it, in March 2007 — hinges on a sequence of events that took place between August 1998, when Marvel terminated Lee’s employment, and November 1998, when Lee entered into a new agreement with the company and signed over his likeness, and any claims to characters.
Representatives of Stan Lee Media previously have claimed that on Oct. 15, 1998, Lee transferred to that company rights to his creations and his likeness.
It also should be noted that in July 2007, Stan Lee Media sued Stan Lee, who returned the favor.
For more, and more colorful, background, Barron’s published a solid article on the dispute back in June.
Update: Tom Spurgeon has commentary as he watches a press conference this morning featuring Martin Garbus, attorney for the plaintiffs.