Bloomberg News is reporting that financier Ronald Perelman has agreed to pay $80 million to settle a lawsuit that accused him of diverting some $553.5 million in notes at a time when he controlled Marvel. Perelman and other Marvel directors were accused of moving the proceeds of notes issued by Marvel in 1993 and 1994 to other enterprises controlled by Perelman.
One of the celebrated junk bond-wielding corporate raiders of the greed-fueled 1980s, who feasted voraciously at the public trough in the wake of the savings and loan crisis of the Reagan/Bush years, Perelman purchased Marvel from New World Entertainment in 1989 for $82.3 million. Using a variety of gimmicks and riding the comic boom of the early 1990s Perelman managed to goose Marvel’s profits to unsustainable levels while adding a number of poorly performing acquisitions including Fleer/Skybox, Malibu Comics, and the Panini Group—all of which proved to be dead weight that helped drag Marvel into bankruptcy in 1996.
After Marvel declared bankruptcy in 1996, noteholders and Marvel’s litigation trustees sued Perelman in 1997 seeking $470.8 million in damages. In 2004 a U.S. District Court Judge ruled in Perelman’s favor, but his ruling was overturned in 2005 by the Court of Appeals. While agreeing to pay $80 million to settle the suit, Perelman continues to deny any wrongdoing in the looting of the company he controlled.
The settlement will go to some of the pre-bankruptcy Marvel shareholders and unsecured Marvel creditors. They will share about $50 million with $25.9 million going to legal fees, $2 million to pay off a loan, and $1 million in trustees’ fees and administrative expenses.