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Tuesday, June 25, 2024 | Back issues
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Stan Lee Media Loses Bid for Stake of Marvel Profits

MANHATTAN (CN) - Stan Lee Media cannot overturn court decisions relating to the venerable comic book writer's settlement of a $1 billion lawsuit against Marvel Enterprises, a federal judge ruled.

U.S. District Judge Robert Sweet said that the company's motions are unsupported and time barred since they come a decade after the alleged injury.

Lee, who co-created Spider-Man and several other comic book heroes with Jack Kirby and Steve Ditko, served as Marvel's former chairman and CEO. Lee worked for Marvel and its predecessors for decades, resulting in a fleet of iconic comic book characters, including the Fantastic Four, the Incredible Hulk, the X-Men, Daredevil, Silver Surfer and Iron Man.

In 1998, Lee began working for Stan Lee Enterprises (SLE) while still working 10 to 15 hours a week for Marvel. SLE is the alleged predecessor to Stan Lee Media Inc. (SLMI), an Internet-based marketing company that Lee co-founded with Peter F. Paul in 1999, according to Friday's ruling.

Lee terminated his contract with SLMI in 2001 over a salary dispute, and the company dissolved in early 2002 amid allegations of mismanagement and criminality.

Paul is currently serving a 10-year prison term for manipulating the company's stock before its collapse, the ruling states.

On Nov. 22, 2002, Lee sued Marvel for nearly $1 billion in New York federal court. The judge sealed certain documents in the case in 2004, and the parties reached a settlement after summary judgment in 2005.

Four Stan Lee Media shareholders filed suit in 2009 against Marvel, Lee, and Lee's family and attorney for copyright infringement, breach of fiduciary duty and breach of contract. They claimed the defendants had improperly received more than $750 million in Stan Lee Media assets.

A judge dismissed the lawsuit for standing as well as other grounds, and the appeal in that case was dismissed on Dec. 29, 2010.

"Lee has been using his own characters since at least 1999," U.S. District Judge Paul Crotty wrote in the 2010 ruling. "Plaintiffs cannot wait a decade to enforce their rights."

But that decision failed to put a stop to SLMI's litigation efforts.

"Because of the success of the [comic book] characters and the conflicting claims concerning their rights, it has been difficult to achieve finality," Sweet wrote Friday.

After filing suit against Marvel in California federal court, Colorado state court and New York bankruptcy court, Stan Lee Media moved in Manhattan federal court to vacate the summary judgment and dismissal decisions from 2005. The company also requested to intervene as a defendant and unseal certain filings from the case.

Sweet dismissed the company's arguments that it was the "real party of interest" and should replace Lee as plaintiff in a future action.

"SLMI has contended that it, rather than Lee, was the real party in interest and, as such, the court lacked subject matter jurisdiction," the ruling states. "However, there is no evidence that SLMI was the real party in interest with respect to Lee's claim for compensation under the Marvel/Lee employment agreement. There is no language in the SLE/Lee employment agreement granting SLMI any rights to Lee's salary, profit participation or other compensation from Marvel."

Sweet likewise dismissed claims that Lee and Marvel concealed the existence of such a contract.

"Conclusory allegations cannot support a claim of fraud on the court ... and as such this aspect of SLMI's motion must be denied," Sweet wrote.

Stan Lee Media's latest legal maneuver is a slap in the face of Judge Crotty's 2010 ruling, Sweet added.

"In light of the foregoing procedural history, SLMI's present motion must be regarded as an improper attempt to circumvent Judge Crotty's August 10, 2010 decision and should on that ground be denied," Sweet wrote.

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