Earlier this week, after Disney purchased Marvel Entertainment for $4 billion, we pointed out that Marvel’s most valuable intellectual property — including rights to Spider-Man, Iron Man, X-Men and other characters — were under legal dispute.
Now there’s been an interesting development in the case that pits Stan Lee Media against Marvel over whether Lee assigned the rights to his characters to SLM before leaving the company.
Oliver Armas at New York’s Chadbourne & Park has taken over as lead counsel for the plaintiffs in the case. As if the backing of a powerhouse law firm like Chadbourne isn’t enough to scare Marvel (and its new owners at Disney), Michael Hess at Giuliani Partners is now co-counsel in the case. Hess is most famous for being co-lead counsel for Richard Nixon in his failed attempt to stop The New York Times from publishing the Pentagon Papers.
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The new lawyers are going right at Marvel, requesting an opportunity to file an amended complaint. Marvel lawyers are opposing the motion on procedural grounds, with opposition papers due in court by early next week. The judge will hold a hearing and make a decision thereafter.
What’s in the new complaint? SLM attorneys are keeping it close to their vest — even the defense says they haven’t seen it —but an insider teases there could be big changes. We’ll update developments soon.
This lawsuit hasn’t been a secret, of course. We discussed it back in January, and Disney likely protected itself in the event of an adverse ruling. In the comment section of our prior post, Roger Goff at Wolf Rifkin wrote: “I am fairly confident that the contingent liability from the lawsuit will be carefully addressed in the acquisition agreement. There is certain to be an indemnity, and probably a holdback, to protect Disney from bearing the burden of a large adverse judgement.”
But we haven’t seen the deal, and the possibility exists that the survivor of the merger might assume all assets and liabilities.
This dispute raises passion in SLM shareholder circles. We’re not sure who posted this video on YouTube, but it goes through a timeline of events in this complicated legal saga, shows what a financial analyst thinks about the case, and offers a pretty good perspective on the plaintiffs’ position:
