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OCT
22
11 MOS

Stan Lee Media Loses Appeal Over 'Conan the Barbarian' Rights

The 9th Circuit refuses to shake up what happened in bankruptcy court a decade ago.

The Avengers Premiere Stan Lee - H 2012
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Stan Lee

Roses are red, the sky is blue, and Stan Lee Media Inc. has lost again in court.

This time, the 9th Circuit Court of Appeals has shot down the company's attempt to reclaim the rights to the Conan the Barbarian character.

SLMI was founded by Stan Lee in the late 1990s, but eventually the company declared bankruptcy and Lee returned to Marvel. Along the way, SLMI's assets were raided in bankruptcy, and SLMI shareholders have been unsuccessfully attempting again and again and again to convince various judges this happened illegally.

Among the assets ripped from SLMI's fingertips were rights to Conan the Barbarian, acquired by Conan Sales Co. in 2002. In a subsequent lawsuit, SLMI claimed that 1,800 SLMI shareholders weren't given proper notice, and that Lee's longtime attorney Arthur Lieberman and the company's ex-controller Junko Kobayashi made misrepresentations, failed to disclose conflicts and made improper acts during the bankruptcy process.

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But before SLMI could get to trial against Conan Sales Co. (CSC) for exploiting the character in works like Conan the Barbarian 3D, a federal judge dismissed the lawsuit.

On Monday, the 9th Circuit affirmed the dismissal, writing in an opinion that "SLMI presented insufficient evidence that Kobayashi or Lieberman adversely dominated SLMI, or that any such adverse domination influenced an otherwise arm's-length negotiation between CSC and the unsecured creditors' committee, both of which were represented by independent legal counsel."

The appellate court added that the district court didn't abuse its discretion in denying relief based on purported fraud and not setting aside a decade-old order in the bankruptcy process.

Of course, SLMI has never let defeat discourage their continued pursuit of alleged lost rights.

Earlier this month, the company appealed a different judge's decision to throw out a billion dollar lawsuit over Disney's exploitation of franchises like Fantastic Four, X-Men and Spider-Man.

And the company doesn't believe the legal war over Conan rights is finished either. SLMI's lawyer tells THR that it plans to file a petition for a rehearing en banc before the 9th Circuit on the grounds that CSC's secured claims must be subordinated to SLMI's unsecured creditors under federal bankruptcy law.

E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner