IT ALSO FREED HIM TO
start a new company with his friend Peter Paul, which they called Stan LeeMedia. Paul put in $500,000, while Lee assigned the company all his intellectual property. Calling itself anInternet animation studio, the dot-com rode the bubble market.Flush with success, Paul underwrote a gala Hollywood fundraiser in August 2000 for Hillary Clinton's U.S.Senate campaign. He had begun negotiating with representatives of Bill Clinton for the departing president to become Stan Lee Media's ambassador of goodwill.Just days later, newspapers reported that Paul had served time on twofelony convictions: the first, for taking millions of dollars from theCuban government for a shipment of coffee he never delivered; thesecond, for cocaine possession. The Clintons cut themselves off fromPaul.Paul had been manipulating the stock since 1999, and now tried tokeep the shares and company afloat -- covering payroll with borrowings from his margin account. After the Securities andExchange Commission began reviewing his stock dealings, Paul fledto Brazil. Arrested there, he had to await extradition in a prison he says was like a dungeon.Stan Lee Media sought bankruptcy protection in 2001. In2002, Stan Lee sued Marvel Entertainment on a previouslyundisclosed contract. It turned out that in November 1998-- a month after assigning his intellectual property to StanLee Media -- Lee had gone to Marvel claiming half-ownership of Spider-Man, the X-Men and other characters,since Marvel had cancelled his previous rights assignmentin its bankruptcy. Lee got a new contract for up to $1million in annual salary and 10% of movie and TV profits, assigning Marvel his rights in those characters.So, come 2002,
Spider-Man: The Movie
had grossed more than $1 billion and Lee invoked that contract andsued. Their 2005 settlement was sealed, but Marvel later reported a $10 million charge for it.Peter Paul,meanwhile, had been extradited back to the U.S. where he pled guilty in March, 2005 for his Stan Lee Mediastock manipulation. Since then he's sued the Clintons in California for scaring off a potential investor in StanLee Media. He's also aided the group that's trying to assert Stan Lee Media's claims to Stan Lee's creations.Working with him is investor Jim Nesfield, a one-time Wall Streeter who was the star informant for EliotSpitzer when the former New York Attorney General sued mutual funds for allowing "late trading" by hedgefunds. Nesfield approached Marvel and was rebuffed when he asserted claims to Stan Lee's creations. He then filedan unusual 13-D with the SEC, detailing what he said were Marvel and Stan Lee's wrongdoings.So Lee himself complained to a Colorado state court judge about what he called a hijacking of Stan LeeMedia. Lee wrote other shareholders, saying that Peter Paul was behind Nesfield's group and blaming Paulfor the company's earlier bankruptcy. A large block of shares was still held by entities that Paul had admittedusing in his 1999-2000 manipulations. But since 2003, Paul says, all thatstock belonged to Christopher C. Belland, a Key West, Fla., realtor andtour operator who posted bond for Paul. In May, the Colorado judgeruled that Nesfield's group could run Stan Lee Media.In a statement to
, Marvel says Nesfield's group will recover nothing. Lee's agreement with Stan Lee Media never mentioned anyMarvel characters, Marvel says. What's more, it says, Stan Lee'scharacter creations were "works-for-hire" and have always belonged toMarvel. Lee has made public statements concurring with the "work-for-hire" characterization. But those statements seem at odds with hisMarvel contracts and his 2002 lawsuit. Stan Lee didn't respond to
The Bottom Line:
Marvel shares have been on a tear inrecent months, due to excitementabout
But a bitter legalfight over ownership may dog theshares.