|
Marvel readies Ch. 11 exit
|
 |
June 25, 1998: 6:21 p.m. ET
Judge rules plan of reorganization is fair, clearing way for confirmation
|
NEW YORK (CNNfn) - After more than 1-1/2 years of messy bankruptcy proceedings, Marvel Entertainment Group Inc., the nation's largest comic book publisher, is ready to emerge from Chapter 11 protection, a federal judge ruled Thursday.
In a 20-page decision, Judge Roderick McKelvie of the U.S. District Court in Delaware declared a settlement proposed by the court-appointed trustee for Marvel and senior lenders was "fair and reasonable."
The move clears the way for a hearing on June 29 to confirm the plan of reorganization, which was reached between trustee John Gibbons and Chase Manhattan Corp. acting on behalf of secured lenders.
But the plan comes despite objections from billionaire investor Carl Icahn, who last year won control of Marvel in a protracted, highly publicized battle against rival financier Ronald Perelman.
In his ruling, McKelvie rejected objections from Icahn and unsecured creditors, who argued the settlement would result in substantial losses.
"The court finds that this speculative loss does not unfairly impact unsecured creditors," the judge said in his ruling.
The Plan of Reorganization
Under the reorganization plan, Marvel would merge with Toy Biz Inc. -- a company established by Perelman to manufacture toys based on Marvel's comic book characters like Spiderman and the X-Men.
Marvel's secured lenders would receive a portion of equity in the new company and be paid 70 cents on the dollar for their $617 million worth of Marvel-related claims.
Equity holders would receive 12 million warrants. Four million would be exercisable at $12 a share for six months; three million warrants for convertible preferred stock would be exercisable at $10.65 a share for six months; and five million warrants would be exercisable at $18.50 a share for four years.
Various plans attempted
Icahn won control of Marvel from Perelman last year by purchasing bonds that were backed by the company's stock. After installing his own board, Icahn tried to negotiate various plans of reorganization with Marvel's creditors.
But each plan collapsed after failing to win creditors' approval. Icahn subsequently sued Toy Biz alleging that it conducted an elaborate scheme to interfere with Marvel's plans.
Part of the battle involves Marvel's stake in Toy Biz. In exchange for its exclusive license to manufacture toys, Marvel received 27 percent of Toy Biz's stock, which carried super-voting rights equivalent to 78 percent. But Toy Biz argued that the super-voting rights were void after control of the Marvel's stock shifted from Perelman to Icahn.
By December 1997, the Marvel case was transferred out of federal bankruptcy court in Delaware to U.S. District Court. McKelvie appointed a trustee to replace the Icahn-appointed board.
For Icahn to prevail now, he must either propose a competing plan that satisfies the court's guidelines or find legal grounds to oppose next week's confirmation.
-- from staff and wire reports
|
|
|
|
|
|
Marvel
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
