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Marvel-Chase deal (poof!)
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October 8, 1997: 4:02 p.m. ET
Comic book publisher's settlement with lenders unravels in face of Toy Biz
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NEW YORK (CNNfn) - Marvel Entertainment Group Inc. said Wednesday its proposed settlement with lenders led by Chase Manhattan Bank has collapsed.
In a prepared statement, Marvel said Chase has advised the comic book publisher that the plan failed to win the requisite two-thirds support even though a majority of lenders are in favor of it.
Chase and financier Carl Icahn (who gained control of Marvel's stock from another ex-corporate raider, Ronald Perelman) entered into the proposed settlement on Sept. 30.
The collapse comes on the same day that a new offer emerged from Toy Biz, the exclusive licensee of Marvel's characters, to merge both companies into one.
The plan, which would have allowed Marvel to exit Chapter 11 proceedings, would have repaid $385 million in pre- and post-petition bank claims as well as transferred Marvel's Italian Panini S.p.a. entertainment sticker business.
But what the plan did not address was how to deal with the exclusive licensing arrangements held by Toy Biz, which is 27-percent owned by Marvel.
People close to Marvel said they believe Toy Biz officials were lobbying other members of the bank syndicate to vote against the proposed settlement.
"They are trying to scuttle our deal," said one person, speaking on condition of anonymity.
As for Wednesday's Toy Biz offer, Marvel said it has "not yet received any proposal" and it is "highly skeptical of this proposal." Since Marvel filed for bankruptcy last December, three agreements with Toy Biz have collapsed.
Marvel now plans to seek new financing from the Icahn-controlled High River L.P. and Westgate International L.P., a New York-based money management firm.
Without additional financing, Marvel said it may not be able to avoid "a piece-meal liquidation."
Cash levels are "dangerously low" and Marvel is increasingly concerned about "the loss of vendor, supplier and employee support."
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Marvel
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