NEW YORK) — Financiers Ronald Perelman and Carl Ichan met in a superhero-style confrontation Friday when dissident bondholders led by Ichan said they intend to vote a majority of bankrupt Marvel Entertainment’s equity to elect a new board of directors Tuesday.
The Official Committee of Bondholders of Marvel Holdings Inc., Marvel Holdings Inc. and Marvel III Holdings Inc. — the bondholder groups — said they told Marvel Entertainment Group Inc., which is controlled by Perelman, they intend to elect a new board for the comic book and trading card company.
Icahn and six other candidates are on the bondholders’ slate. Two more directors would be selected by the bondholders.
The bondholders said their review revealed Marvel is in complete disarray and immediate action is needed to save the company.
Marvel said it and its secured creditors intend to oppose the bondholder plan to gain control of the board.
“There will be a hearing (this) afternoon and the secured creditors of Marvel will seek a stay of the court’s order allowing bondholders access of the stock,” a Marvel source said late Friday.
A temporary restraining order would prevent the bondholders from ousting Marvel’s board Tuesday, and would likely delay the implementation of a final reorganization plan by sending both sides back into court.
A prior court ruling allows bondholders to foreclose on 80 million shares of Marvel common stock that was collateral for the bonds.
Marvel contends the bondholder group is fronting for Icahn’s interests to “grab control of the company without committing a dollar.”
The bondholders said they will continue to guarantee a $365 million capital infusion, subject to the replacement of Marvel’s board and confirmation by the bankruptcy court of an acceptable reorganization plan. The bondholders said they intend to use the $365 million to recapitalize Marvel and to restore the company to financial and operational health.
In a letter sent to Marvel Friday, the bondholders’ counsel said the decision to replace the board “is driven by the critical and interrelated needs to halt Marvel’s deterioration and to promote Marvel’s proper reorganization.”
The bondholders also charged that Marvel refuses to try to undo the damage of its disastrous licensing program, which they said sacrificed Marvel’s long-term growth and opportunity so as to artificially inflate Marvel’s earnings per share.
They cited one of Marvel’s former officers as telling some members of the committee that his orders were “to get earnings at any cost.”
Marvel, in a printed response, said Ichan “now seeks to grab control of the company without committing a dollar.”
The bondholders’ rescue plan differs greatly from Perelman’s, under which Marvel was to buy shares in a separate company, Toy Biz Inc., that it did not already own and merge the profitable toy company into Marvel.
Toy Biz has an exclusive agreement to make toys based on Marvel’s superhero characters, including Spider-man, The Incredible Hulk and the X-Men.
In early March, Perelman, in a surprise move, gave up his fight to maintain control over Marvel and agreed to hand the company over to the dissident bondholders led by Icahn.
In February, a Delaware bankruptcy court ruled the bondholders could vote and foreclose on the 80% of Marvel’s stock pledged as a security. Ichan and other bondholders had objected to Perelman’s plan for the company, which would have diluted their equity in the company while keeping Perelman and his Andrews Group fully in control.
Marvel filed for Chapter 11 bankruptcy protection in December amid mounting financial losses and an inability to repay its bank debt.
Perelman bought Marvel in 1988 when it was a relatively small comic book publisher. He expanded it with the purchase of Fleer and SkyBox International trading card companies.