Stan Lee Media suing Marvel, Lee
dot.com rises from the dead to sue comics company
Mar 26, 2007 Dominic von Riedemann
(Source: www.redherring.com)
Remember the dot.com boom-n'-bust of the 1990's? Basically everyone thought there was gold in them thar InterWeb hills and it was just a matter of figuring out how to extract it. The only problem was, those companies all went bankrupt before they could, leaving investors penniless and IT techs waiting tables.
The dot.coma hangover has come back to haunt Stan Lee, the public face and Publisher Emeritus of Marvel Entertainment. In 1998, Lee and former lawyer (and convicted cocaine trafficker) Peter F. Paul founded Stan Lee Media, in an attempt to create branded super hero franchises across all media. Unfortunately, Stan Lee Media went bankrupt in 2001, amid allegations that Paul and SLM officer Stephan Gordon had attempted to keep the company afloat by buying stocks with bad checks. Paul was convicted of fraud but has not yet been sentenced.
Now lawyer Jim Nesfield has revitalized Stan Lee Media, becoming the chairman, CEO and president of the company. One March 15th, he filed a lawsuit against Marvel Entertainment, claiming that Stan Lee signed a contract in 1998 that assigned co-creative interests to SLM, the same interests that Lee also assigned to Marvel Comics. Nesfield claimed the contract was hidden from the public, but he is filing suit to assert SLM's shareholder rights.
“Stan Lee is no longer with the company, but the contract remains intact,” Nesfield said. “He has signed it and the contract is still in force.” Nesfield has threatened to put Lee on the stand if the case goes to trial.
SLM wants 50% of all Marvel's royalties going back to the past three years (the farthest back Nesfield and SLM can claim), and going forward 50 years.
Lawyers for SLM were quick to suggest that Marvel and Stan Lee Media could easily settle this out-of-court.
“It’s very early in the case, but obviously in any case a settlement is possible,” said Ethan Horowitz, a partner with law firm Goodwin Procter, who is representing SLM. “Basically, Stan Lee assigned a lot of valuable rights to Stan Lee Enterprises. We are now the owner of those rights, and we go from there.”
In a press release put out that that same day, Marvel said, "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."
Marvel's rebuttal also quoted Stan Lee as saying, “I do not support this action and believe the suit to be baseless.” Lee filed suit against his old company in January, claiming that Nesfield illegally took control of SLM and infringed on Lee's copyrights and trademarks.
Nesfield was never initially involved with SLM, but described himself as an observer ever since the company went public in 2000.
“I’ve been following the company since its initial flotation and its demise, and I specialize in bankrupts in distress,” he said. “I’m what they call a vulture.”
According to contract law, a signed contract cannot be in force for longer than 10 years. Therefore, the waiting game is technically on Marvel's side, since if SLM cannot prove their case before October of 2008, the contract is no longer valid.
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