“Once it filed for bankruptcy, its assets were subject to intense scrutiny. Through all of that time, it never once claimed that it owned any interest in any Marvel character.”

Gee, Richard, in the SLM bankruptcy, who would have been responsible for claiming rights? Would that have been Stan Lee, the head of the company or Junko Kobayashi (the debtor in possession), whom he controlled and who was an officer of the newly formed POW! Entertainment? How about the intense scrutiny that missed Stan having Kobayashi sign over assets to a POW subsidiary without approval or knowledge of Judge Lax, the trustee, the shareholders, or the creditors’ committee? How about the intense scrutiny of the Oct. 1998 contract with SLM being virtually identical with the Nov. 1998 contract with Marvel? How about the intense scrutiny of Stan warranting to Marvel that he had not assigned rights to anyone else when, if fact, he had done just that the previous month? How about the intense scrutiny of the guarantees made to the SEC by Perlmutter that there were no competing claims when he sucked hundreds of millions of dollars out of investors?

When Marvel had the bankruptcy court void the contract with Stan, it quickly learned it had really screwed up. It was desperate to make a new agreement with him. After voiding it, they didn’t have to give him anything. We are to believe that they voided the contract and then were such nice guys that they gave him a much better one? Why would they do that? Richard, what is the color of the sky in the world in which you live?

Richard, please explain to the investors why you have publicly referenced previous employment agreements as if they matter when the Nov. 1998 agreement said this: “This Agreement will constitute the entire understanding between the parties in connection with Stan Lee’s relationship with Marvel from the date hereof, shall supersede any and all previous agreements and may not be amended or modified except by a writing signed by the party to be charged.”

Wow. The Agreement constituted the entire understanding between the parties. It superseded any and all previous agreements. Richard, don’t you think it is about time to knock off the BS and tell the truth?

Because of Material Misstatements and Omissions in this lame defense of Marvel, the SEC should be reviewing all the 10(b)5 violations referred to here-

There are many unsubstantiated and false claims in the Barron’s article. It is unfair to Marvel and its shareholders to dismiss Marvel’s position as simply attacking the messenger. Peter Paul has been convicted of three felonies and is awaiting sentencing for his latest crime, manipulating the stock of Stan Lee Media. His history speaks for itself. Marvel’s position with respect to Mr. Paul’s claims is not based on his lack of credibility. It is based on facts in the public record.

There are three main falsehoods underlying Peter Paul and Stan Lee Media, Inc.’s claims against Marvel.

First is the claim that Marvel is not the sole owner of every character created by Stan Lee during Mr. Lee’s lengthy tenure as a Marvel employee. Mr. Lee signed written employment agreements with Marvel in 1976 and 1980 in which Mr. Lee acknowledged and confirmed that all the work he did for Marvel from the beginning of his employment (in 1940) was as an employee. As is customary in contracts reflecting works made for hire, there was also a “belt and suspenders” assignment to Marvel of all rights in all characters he had previously created or would create for Marvel in the future.

The copyright law treats work done by an employee within the scope of his employment as a “work made for hire” which means the employer is automatically the author and owner for copyright law purposes. Therefore, Mr. Lee never owned any of the characters he created for Marvel. Since he never owned them, he could never have transferred them to anybody. Mr. Lee himself has always acknowledged that the Marvel characters belong and always belonged to Marvel.

Second, in order for Mr. Paul’s claims to have any traction, a court would have to accept that when Marvel rejected Mr. Lee’s contract in the bankruptcy proceeding, that rejection somehow resulted in a return to Mr. Lee of rights in Marvel’s characters. Not only did Mr. Lee never have those rights, but the rejection of Mr. Lee’s contract did not and could not have had that effect. Neither Mr. Paul nor SLMI has ever pointed to any legal support for their theory because they simply made it up.

Third, Mr. Paul has deliberately mischaracterized what happened in the 2002 Stan Lee/Marvel lawsuit. Since the majority of the litigation papers are public record, there is no reason for anyone to be confused. That lawsuit was over how to interpret a profit participation paragraph in Mr. Lee’s 1998 contract. It had nothing whatsoever to do with ownership of any characters. Mr. Lee never claimed in that lawsuit or anyplace else to own any part of any character he created for Marvel. In 2005, the profit participation lawsuit was settled. While the terms are confidential, Mr. Lee did not “give back” or transfer to Marvel any interest in any characters in the settlement.

The truth is a lot duller than the spin Mr. Paul is trying to put on the facts. Stan Lee never owned any of the characters he created and never claimed to own them. His contract with Stan Lee Media was and is clear on its face that Stan Lee was giving to his new company all the rights in characters that he planned to create for it – not any Marvel characters. Stan Lee Media was in business from approximately 1998-2001 when it went bankrupt. It made numerous filings with the SEC and issued a tremendous volume of promotional material. Once it filed for bankruptcy, its assets were subject to intense scrutiny. Through all of that time, it never once claimed that it owned any interest in any Marvel character.

Stan lee Media closes it doors when it runs out of money because the management hired by Stan arranges 3 death spiral convertible financings that finally tank the stock and access to funds. Bill Clinton seduces Stan Lee’s Japanese partner Tendo Oto of venture Soft to create a compay with Clinton through his agent Jim Levin and Oto reneges on a promise to invest another $5mm in SLM in Nov 2000.

Stan Lee fires Peter Paul and puts SLM in Chapter 11 Feb 2001
Paul goes to Brazil where his last major investment in a company that sells English language products has been functioning since 1993.

Paul is indicted in New York by Hillary Clinton’s friendly US Atty for the Eastern Dist of NY while he remains in Brazil at the direction of his lawyers in June 2001 while in dialog with Atty Gen Ashcroft and Asst Atty Gen Chertoff to expose SLM and Clinton frauds.

Lee sues Marvel in Nov 2002 on the Nov 1998 contract which Marvel has never published for shareholders and lenders to see- Marvel secretly settles for more than $10 million a profit participation provision in the contract Marvel knows is fraudulent because it warrants Stan lee Media’s contract was never executed by Stan.

In his suit against Marvel- Lee describes the contract with Marvel (identical to the contract with SLM a month earlier) as a conditional assignment of his rights to his creations and his expectation to share in all profits derived from exploiting HIS characters!

After being paid by Marvel – the next day- Marvel announces a $500 million credit line from Merrill Lynch to start Marvel studios- with non-recourse notes collateralized by 100% of IP rights Marvel has that Stan Lee Media owns 50% of.

14. Under the Agreement the Defendants were given the right and assumed the obligation to commercially exploit Mr. Lee’s characters, as well as his name. In order to facilitate these rights and obligations, Defendants received a conditional assignment of Mr. Lee’s rights in his many world famous and hugely popular characters, and Mr. Lee was entitled to share in the profits from any live action or animation television or movie production based on these characters and other Marvel characters, as well as profits from the exploitation of any ancillary rights associated with such film or television productions, including toys.

15. Throughout his relationship of more than sixty years with Defendants, during which Mr. Lee permitted Defendants to exploit his superhero characters on the understanding that they would share in the profits derived therefrom, Mr. Lee reposed trust and confidence in Defendants to, among other things, deal with him fairly and in good faith, and to pay over to him a portion of the profits derived from such commercial exploitation.
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As you see, Lee made a “conditional assignment of Mr. Lee’s rights.” Mr. Lee “permitted Defendants to exploit his superhero characters.” He asserted then what he denies now after getting paid off by Marvel. Have Marvel investors been told the truth? What about the investors in Stan Lee Media? Peter Paul has been portrayed as the bad guy by those with their own agendas. Stan signed a lifetime agreement with SLM in Oct. 1998, a month before he signed the same agreement with Marvel. Hey Stan, how about giving the money you got from Marvel to the SLM shareholders. It belongs to them. You would get your share as a shareholder. That’s fair. Stan, the public is going to soon learn what happened in the SLM BK. How was it that, contrary to the orders of the judge, THE ACCUSER and THE DRIFTER were somehow transferred by insiders to a subsidiary of you new company, POW!? How did you pull off that one? We need a new supervillain — BANKRUPTCY FRAUD MAN.