In the wake of the Chaos Chapter 7 bankruptcy filing (see 'Order Wins--Chaos Ends'), word leaked out that Chaos founder Brian Pulido had sold the rights to Chaos' most popular character, Lady Death, to CrossGen Comics just two weeks before bankruptcy was filed.  CrossGen issued this statement in response to questions about the transaction.

Brian Pulido and Mark Alessi are friends, so Mark knew that Chaos! was in financial trouble. While CG was rumored to be buying Chaos! for a long time, it was never CG's intention to do so. In fact, Brian offered CG the chance to buy the company or invest in it, and it was Mark's opinion that the Chaos! line was not a fit with CG's overall market plans. However, Brian and Mark were and still are good friends, and Mark has always endeavored to be a good corporate citizen in the comics world. If you look at CG's efforts with regard to Top Shelf's crisis earlier this year, and how instrumental CG was in the founding of A Commitment To Our Roots (ACTOR), it's clear that we have always tried to act with the best interests of comics and comics creators at heart. In this case, Mark wanted to help by doing a business deal with Chaos! that would ultimately benefit both Brian and the Chaos! creators.

So, the idea was proposed that CG could help Brian by purchasing one of the Chaos! properties at top market dollar, with the intention of selling it back to him when Brian was able to restructure the company. This would give Brian needed cash to pay creditors who were owed money and give him a better position to restructure the company. The fact is that up until the very end, it was Brian's intention and desire to restructure and stay in business. So, CG bought Lady Death for an amount determined to be top dollar based on an outside evaluation of Chaos!' worth. Brian then took that money, $12,500, and paid creditors to whom Chaos! still owed back payments. At that time, Brian also lobbied heavily for CG to provide some freelance work for some of the Chaos! creators who had not been paid in full for their Chaos! work, yet. As a result, several of those creators were provided work as fill-in artists for ongoing CG series.

When the restructuring didn't occur, and Chaos! was forced to file for bankruptcy, CG still owned Lady Death. At that point, Mark and Brian made a handshake agreement that revenue that came in to CrossGen from existing Lady Death property licensing agreements would be directed first to creators who worked on Lady Death and were still owed money. First dollars from that revenue would go to those creators before CG would take a dime. Those creators, based on a list from Brian, will be notified by CG of that intent by mail sometime soon. Mark intends to stick by that deal, and is making it public at this time to demonstrate those intentions.

Now, in the past, publishers have waited for a company to officially close, and then purchase properties for pennies and make much more profit from those properties than they would have had they purchased them prior to a bankruptcy or company closing. In the past, entire lines have been bought for as little as $10,000. It has been reported in the past that Todd McFarlane bought all the Eclipse properties for only $25,000. In this case, CG purchased a single property for $12,500, primarily as a mechanism for Chaos! to pay its creators, and not to profiteer off of someone else's poor fortune.

With this arrangement, it was hoped that Brian would have originally been able to avoid the bankruptcy option. When it became inevitable, it was decided that Brian and Mark would work together to create a framework for the payment of the Lady Death creators who were still owed money. In fact, it is our hope that other publishers who purchase properties from Chaos! will adopt the same approach in ensuring that creators who worked on those properties can also eventually be compensated.