NEW YORK – A judge approved Marvel Entertainment Group Inc.’s $100 million debtor-in-possession financing plan but rejected two proposals that would have helped controlling shareholder Ronald Perelman solidify his grip on the comic-book and trading-card concern.
In a press release Wednesday, Marvel said U.S. Bankruptcy Court Judge Helen S. Balick “rejected and overruled” Marvel bondholders’ proposed alternative DIP financing plan. But Paul Caminiti, a spokesman for the Marvel creditors’ group, said bondholders viewed the ruling as a victory because the judge threw out a provision of the credit line that would have put the financing in default if Perelman lost control of the company.
Caminiti said the bondholders backed the $100 million plan through Chase Manhattan Bank except for the control provision and a provision regarding Marvel’s license with its Toy Biz Inc. affiliate. He said the plan as approved by the judge is “less onerous” to bondholders’ interests and wouldn’t put the credit line into default if, for instance, bond holders vote to foreclose on the common shares that secure the debt. Marvel’s secured creditors hold bonds secured by 79% of Marvel’s equity.
Perelman’s Andrews Group has proposed a recapitalization that would result in Andrews Group holding 80.8% of Marvel and the bondholders’ stake being substantially diluted.