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In August, just as Conan the Barbarian 3D was released, Stan Lee Media Inc. filed a lawsuit in an effort to reclaim ownership on the fictional Conan character. The move by SLMI, which was founded by comic book legend Stan Lee but now operates independently, is part of a larger campaign to put back the pieces from a turbulent bankruptcy from nearly a decade ago.
SLMI believes that finally having a court-recognized board of directors will give it the necessary standing to pursue reclamation of its intellectual property, but the current owners of the Conan character say it’s too late.
SLMI went into bankruptcy in 2001 and soon thereafter, Stan Lee resolved differences with Marvel, bringing over rights to characters including Spider-Man, the Incredible Hulk, X-Men, Iron Man, the Fantastic Four, Thor, and more.
As SLMI continues its fight against Lee and Marvel in an attempt to convince judges that rights to these characters were unlawfully transferred, SLMI also is seeking to regain additional turf in a separate lawsuit against Conan Sales Co., Paradox Entertainment, and others who aided the allegedly improper transfer of Conan in 2002.
Back then, a bankruptcy judge stopped transfer of SLMI assets, but allowed Conan Sales Co. to reclaim the character it once held per a “Settlement Approval Order.” Now, in the current lawsuit, SLMI says the judge’s order should be declared void because 1,800 SLMI shareholders were not provided sufficient notice.
Last week, the defendants moved to dismiss the lawsuit on a variety of points, but especially because the complaint was served on an “untimely” basis.
The motion to dismiss says that SLMI had an opportunity to challenge the order during the bankruptcy process and failed to do so. The defendants argue that the Bankruptcy Code doesn’t require notices to shareholders, and that the bankruptcy judge had found a notice of a hearing to be sufficient.
In order for SLMI to win, the defendants say that their adversary needs to show that a fraud on the court was perpetrated, and nothing in SLMI’s “vague” allegations meet that standard, they say.
Instead, the defendants believe that the lawsuit to reclaim Conan upon the film’s release was an “ambush” that was “intended to, and did, embarrass” defendants at a “very important time.”
A dismissal of the complaint is requested because no substantive allegations are alleged and because relief would cause the defendants, who have spent nearly a decade trying to revitalize the Conan character, “substantial undue prejudice.”
Conan the Barbarian 3D wasn’t exactly a hit, grossing less than $50 million worldwide on a reported budget of $90 million. But a good deal of ancillary revenue and future derivative works could be at stake, and of course, SLMI probably hopes to demonstrate it has regained its feet in the midst of legal battles over other characters.
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