Bankruptcy and Marvel Studios[edit]

In late 1995, Marvel reported its first annual loss under

Perelman, which was attributed mainly to the company's
large size and a shrinking market.[11] On January 4, 1996
Marvel laid off 275 employees.[31]
In late 1996, Perelman proposed a plan to save Marvel
in which the company would merge with Toy Biz after
Perelman spent $350 million for the Toy Biz shares that
he did not already own. He would then receive newly
issued Marvel shares to maintain his 80 percent stake.
[11]

Separately, in July 1996, Marvel filed with the U.S.

Securities and Exchange Commission to raise money to
create a private entity called Marvel Studios.[32] Much of
the money to create Marvel Studios came from the sale
of Toy Biz stock.[32][33]
On December 27, 1996, the Marvel group of companies
filed for Chapter 11 bankruptcy protection.[7][11][34][35][36][37]
[38]
 At this time, Carl Icahn, an American businessman
and investor, began buying Marvel's bonds at 20% of
their value and moved to block Perelman's plan.[11] In
February 1997, Icahn won the bankruptcy court's
approval to take control of the company's stock.[11] Later,
in June 1997, Icahn won the right to replace Marvel's
board, including Perelman.[11][39]
In December 1997, during the post-bankruptcy
reorganization phase, Toy Biz came to an agreement to
purchase Marvel from the banks.[7][11] In December 1997,
the bankruptcy court appointed a trustee to oversee the
company in place of Icahn.[11] In April 1998, while the
legal battle continued, the NYSE delisted Marvel stock.
[11]
In August 2008, former company head Ronald Perelman
paid $80 million to settle a lawsuit accusing him of
helping divert $553.5 million in notes when he controlled
the company.[19]