Stan Lee Media

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Stan Lee Media

Type	Public Delisted
Founded	October 1998
Founder(s)	Stan Lee, Peter F. Paul
Headquarters	Beverly Hills, California, USA
Key people	Nelson Thall, Director
Industry	Entertainment
Services	internet animation studio
Subsidiaries	Stan Lee Media Studios

Stan Lee Media (SLM) was an Internet-based creation, production and marketing company founded in 1998, dismissed from Chapter 11 Bankruptcy protection in November, 2006. The company created Stan Lee branded super hero franchises for applications in all media. Its 165-man animation production studio was based in Los Angeles, California from 1998-2001.It won the 2000 Web Award for the best Entertainment Portal on the World Wide Web.

Contents 1 Evolution 1.1 Bankruptcy 2 Productions 2.1 The 7th Portal 2.2 Others 3 Lawsuits 4 References

[edit] Evolution

The company was founded by Stan Lee (Spider Man, X-Men, Iron Man The Hulk, and Fantastic Four co-creator) with his then-friend, Peter F. Paul in 1998 as Stan Lee Entertainment. Stan Lee Entertainment merged with Stan Lee Media, Inc. of Delaware in April 1999. In July 1999, SLM of Delaware acquired Boulder Capital Opportunities, Inc., a publicly traded company, and through its reverse merger Stan Lee Media became a publicly traded company under the symbol SLEE.^[1]

The company won the Best of Show Web Award in November, 2000, as the best Entertainment Portal on the internet, beating Warner Bros and Disney's portals.

The company launched the first new team of superheroes to be created by Stan Lee in thirty years, the 7th Portal, at a $1 million gala hosted by Dick Clark at Raleigh Studios on February 29, 2000. The first high concept 'webisode' to be broadcast on the internet, 7th Portal's worldwide debut crashed the servers of Macromedia's Shockwave web site with millions of viewers.^{[citation needed]}

The President of Sony Digital studios was hired away to become the CEO of Stan Lee Media in June, 2000, and a joint venture with the largest anime manga company in Japan resulted in production and distribution deals over the internet, on television and in theme parks in Europe, South America and Asia.

SLM used $4.3 million in stock to purchase Conan Properties Inc., owner of Conan the Barbarian. Plans for a third Conan movie and webisodes were made.^[2] With SLM stock price falling below the sale agreement level, Conan Properties, Inc. stock a legal battle ensued between with the previous owners,Baums, LSDC, Arthur Lieberman and the de Camps.^[3]

[edit] Bankruptcy

The company ran out of operating capital during the dot com meltdown and closed operations entirely by December 19, 2000.^[4]

Near the end of 2000, investigators began a review of stock transactions by co-founder Peter Paul and corporate officer Stephan Gordon.^[5] Paul fled to São Paulo, Brazil to avoid prosecution.^[6][7], and the company filed for Chapter 11 Bankruptcy Protection on February 11, 2001. Paul was extradited back to the U.S. after the US Attorney in New York indicted him for violating SEC Rule 10b-5, a securities regulation felony. Paul pleaded guilty.^[8][9] He was sentenced to ten years in jail, and was incarcerated in October 2009.

During the Chapter 11 debtor in Possession proceedings, Stan Lee assigned the major character franchises he created to his new public company, POW! Entertainment, without the knowledge or approval of the Bankruptcy court. Courts later determined that Lee and his new partner Arthur Lieberman failed to disclose the existence and value of the Rights Assignment Lee made to the company when he founded it.^[10]

The company has since been the subject of numerous lawsuits, discussed below.

[edit] Productions

Some of Stan Lee Media's most important projects included the animated Web series The 7th Portal (where Stan Lee himself voiced the character Izayus), The Drifter, and The Accuser. The 7th Portal characters were licensed to an interactive 3-D movie attraction in four Paramount theme parks.^[11]

[edit] The 7th Portal

The 7th Portal became the first ever web animation series to succeed as a 3D ride attraction and to be developed for a $150 million dollar movie by Paramount with producer Mark Canton.^{[citation needed]}

The 7th Portal premiered on the new animation hub Shockwave, on February 29, 2000 when its global launch overwhelmed Macromedia's servers.^[12] It became the most successful web originated animated series, being picked up by Fox in mid run, for distribution on TV in South America and Europe.^[13] Twenty-two episodes were made,^[14] of which the first twenty were shown on-line before the website went bankrupt. The final two episodes were only visible on television.

[edit] Others

Other productions included the Evil Clone —a purported attempt to clone Stan Lee as a cartoon that wackily criticized many aspects of the media, including happy endings, the StanLeeMedia.net website—, and The Backstreet Project, a project including the Backstreet Boys. Different editions on The Backstreet Project comic books were released on the market. Six webisodes were also released in 1999 via StanLeeMedia.net.

[edit] Lawsuits

Starting in 2007, various parties, including some connected to co-founder Peter Paul, sought to take control of Stan Lee Media Inc of Colorado, a successor company to Stan Lee Media, and to sue Stan Lee, Marvel Entertainment, and other parties, for intellectual property owned by Lee, his later company Pow Entertainment, or Marvel Comics, claiming that this property belonged in fact to Stan Lee Media Inc of Colorado. For clarity below, Stan Lee Media Inc of Colorado is referred to as SLMI, as opposed to the original Stan Lee Media, which is referred to as SLM.

The suits actually started with a preemptive strike by Stan Lee in January 2007, when Lee sued SLMI and Jim Nesfield, who was then running the company, claiming the company was commiting $50 million worth of trademark infringement.^[15]

On March 15, 2007, Nesfield, representing shareholders of SLMI, filed a lawsuit against Marvel Entertainment for $5 billion, claiming that Stan Lee's assignment of all of his creative rights to SLM made SLMI a co-owner of the characters that Lee created for Marvel.^[16]

On June 9, 2007, Peter Paul and his associates filed suit against POW Entertainment, Stan Lee, and other former executives of Stan Lee Media, accusing them of improperly transferring assets from SLM's bankruptcy to start POW Entertainment in November 2001 without the knowledge of the Bankruptcy Court or creditors of SLM.^[17]

September 2008, Nesfield's suit from March 2007 was dismissed without prejudice.^[15] It would be replaced by a largely similar suit in January 2009.

On January 20, 2009, Martin Garbus held a press conference in New York announcing a new suit against Marvel Entertainment, Inc., in which he represented Nelson Thall and John Petrovitz (called an associate of Peter Paul in an August 2009 press release^[18]), against Marvel Enterprises, Inc., Marvel Characters, Joan Lee (Stan Lee's wife), Joan C. Lee (Stan Lee's daughter), Isaac Perlmutter (Marvel executive), Avi Arad (Marvel executive) and Arthur M. Lieberman (Marvel executive)^[19] for recovering more than $750,000,000 in profits owed by Marvel to Stan Lee Media since 1998. In the press conference Garbus explained his theory that Stan Lee retained an interest in his early characters by virtue of having been a 'co-creator' of those characters, and that he had assigned these to SLM in an October 15, 1998 agreement. Garbus believes that Marvel's claim to the characters rests on a similar agreement signed a month later, by which time Lee had nothing left to assign (having already given the characters to Stan Lee Media). Garbus believes that high levels of compensation given to Stan Lee by Marvel after a 2005 lawsuit indicate that Marvel acknowledged Stan Lee's co-creator status, and that this acknowledgment probably appears in the settlement agreement between the two (the agreement was sealed by the court).

On January 27, 2009, Judge Stephen Wilson ruled that Lee and POW Entertainment had illegally transferred the rights to the characters The Drifter, The Accuser and Stan’s Evil Clone from SLM, without the knowledge or consent of the Bankruptcy Court.^[20]

On March 17, 2009, A Colorado court gave a victory to Stan Lee, denying efforts by P.F.P. Family Holdings, a company affiliated with Peter Paul, to reconvene the December 2008 SLMI shareholder meeting. The plaintiffs had hoped to use the meeting to install themselves or their allies as directors of SLMI, but the court determined that there had been no quorum and thus no meeting to reconvene.^[21][22]

In September 2009, Garbus, complaining of "irreconcilable differences with his clients" was replaced as lead counsel by Oliver Armas at Chadbourne & Parke^[23], and the new firm sought to amend Garbus's original complaint.^[24]

[edit] References