From: [j r m] at [grove.ufl.edu] (Geoffrey Mason) Subject: [NEWS] Marvel Bondholders Mount Counterattack Date: 18 Jan 1997 08:26:01 -0700 Newsgroups: rec.arts.comics.info Monday January 13 9:58 PM EST Marvel Bondholders Mount Counterattack By Jessica Hall NEW YORK (Reuter) - The bondholders of Marvel Entertainment Group Inc.'s holding companies mounted a counterattack Monday, filing a motion to dismiss Marvel's controversial bankruptcy plan and seeking to protect their $894 milion investment. The bankruptcy filing intensified a battle between Ron Perelman, who controls a majority stake in Marvel, and Marvel bondholders, including financier Carl Icahn. The bondholders, which united to form an official committee on Jan. 9, said certain bondholders would support a rights offering and would secure additional financing to properly capitalize Marvel and improve its profitability. The bondholders said their recapitalization proposal, which remains subject to due diligence, would be an alternative to Marvel's pre-packaged bankruptcy plan filed in December. Marvel, which publishes comic books such as Spider Man and the X-Men, and its three holding companies filed for reorganization under Chapter 11 of the U.S. bankruptcy code last month. Under that bankruptcy plan, Marvel proposed a a $525 million recapitalization plan which would dilute the ownership of public stocksholders. The plan would also dilute the value of the company's public bonds, which are backed by the stock. Marvel, which could not be immediately reached to comment on the bondholders' filing, previously said it was forced to file bankruptcy because the bondholders failed to agree on alternatives to its reorganization. Marvel bondholders had balked at Perelman's request that they waive certain restrictions contained in the bonds and support Perelman's plan to buy newly issued shares of Marvel at a steep discount to the market price. Perelman then dismissed the bondholders' counter plan of a rights offering to generate needed capital and submitted a bankrutpcy plan, the bondholders said. Marvel's Chapter 11 reorganization plan benefitted Perelman at the expense of Marvel creditors, the bondholders said. Perelman could not be immediately reached for comment. In a motion filed Monday with the U.S. Bankruptcy Court for the District of Delaware, the bondholders said they should be permitted to exercise their right to vote and to foreclose upon the common stock pledged as collateral to the bonds. The bondholder also asked the court to lift an automatic stay, which restricts competing reorganization plans. "Perelman must not be permitted to use to automatic stay offensively to ram through a self-interested deal. Court approved continuation of the automatic stay ... would turn a financial folly into a judicial travesty," the bondholders said in the filing. "The secured bondholders, and not Perelman, have the true economic interst in the common stock of Marvel," the bondholders said. The bondholders also alleged that Marvel's assets "have been mismanaged and underutilized for a number of years." Marvel's woes come after several years as a Wall Street darling. The stock, which traded as high as $35 a share in 1993, closed at $2.125 on Monday. In addition to the power struggle between Perelman and the bondholders, Marvel has suffered as interest in comic books and sports memorabilia waned. Marvel also stumbled with some unsuccessful acquisitions, analysts said. On Monday, Marvel said it formed a new operating unit, Marvel Enterprises, that unites the management of its sports and entertainment trading card businesses, its international youth sports and entertainment stick unit, and its online entertainment and interactive software business. Reuters/Variety -- Geoffrey R. Mason | [j r m] at [grove.ufl.edu] Editor - indy Magazine | 611 NW 34th Drive College of Law - Univ of Florida | Gainesville, Florida 32607-2429 -- URL = http://grove.ufl.edu/~jrm