Stan Lee Media
Encyclopedia
Stan Lee Media was an Internet
Internet
The Internet is a global system of interconnected computer networks that use the standard Internet protocol suite to serve billions of users worldwide...

-based creation, production and marketing company that was founded in 1998, filed for Chapter 11 bankruptcy protection in 2000, and ultimately dismissed from bankruptcy in November, 2006. In its early years, the company created Stan Lee branded super hero franchises for applications in all media. Its 165-man animation production studio was based in Los Angeles, California
Los Angeles, California
Los Angeles , with a population at the 2010 United States Census of 3,792,621, is the most populous city in California, USA and the second most populous in the United States, after New York City. It has an area of , and is located in Southern California...

 from 1998-2001. It won the 2000 Web Award for the best Entertainment Portal on the World Wide Web, but the company failed in the same year and the corporate shell has been involved in numerous lawsuits in the years since. The company has been characterized as "a sleazy Internet start-up that could function as the poster child for the excesses of the turn-of-the-century era."

Evolution

The company was founded by Stan Lee
Stan Lee
Stan Lee is an American comic book writer, editor, actor, producer, publisher, television personality, and the former president and chairman of Marvel Comics....

 (Spider-Man
Spider-Man
Spider-Man is a fictional Marvel Comics superhero. The character was created by writer-editor Stan Lee and writer-artist Steve Ditko. He first appeared in Amazing Fantasy #15...

, X-Men
X-Men
The X-Men are a superhero team in the . They were created by writer Stan Lee and artist Jack Kirby, and first appeared in The X-Men #1...

, Iron Man
Iron Man
Iron Man is a fictional character, a superhero in the . The character was created by writer-editor Stan Lee, developed by scripter Larry Lieber, and designed by artists Don Heck and Jack Kirby, first appearing in Tales of Suspense #39 .A billionaire playboy, industrialist and ingenious engineer,...

 The Hulk
Hulk (comics)
The Hulk is a fictional character, a superhero in the . Created by Stan Lee and Jack Kirby, the character first appeared in The Incredible Hulk #1 ....

, and Fantastic Four
Fantastic Four
The Fantastic Four is a fictional superhero team appearing in comic books published by Marvel Comics. The group debuted in The Fantastic Four #1 , which helped to usher in a new level of realism in the medium...

 co-creator) with his then-friend, Peter F. Paul
Peter F. Paul
Peter F. Paul is a former lawyer and entrepreneur who was convicted for conspiracy and drug dealing, and later for securities fraud in connection with his business dealings with Spider-Man creator Stan Lee...

 in 1998 as Stan Lee Entertainment. Stan Lee Entertainment merged with Stan Lee Media, Inc. of Delaware in April 1999. In July 1999, SLM of Delaware acquired Boulder Capital Opportunities, Inc., a publicly traded company, and through its reverse merger Stan Lee Media became a publicly traded company under the symbol SLEE.

The company won the Best of Show Web Award in November, 2000, as the best Entertainment Portal on the internet, beating Warner Bros and Disney's portals.

The company launched the first new team of superheroes to be created by Stan Lee in thirty years, The 7th Portal, at a $1 million gala hosted by Dick Clark at Raleigh Studios on February 29, 2000. The first high concept 'webisode' to be broadcast on the internet, The 7th Portals worldwide debut crashed the servers of Macromedia's Shockwave web site with millions of viewers.

The President of Sony Digital studios was hired away to become the CEO of Stan Lee Media in June, 2000, and a joint venture with the largest anime manga company in Japan resulted in production and distribution deals over the internet, on television and in theme parks in Europe, South America and Asia.

SLM used $4.3 million in stock to purchase Conan Properties Inc., owner of Conan the Barbarian
Conan the Barbarian
Conan the Barbarian is a fictional sword and sorcery hero that originated in pulp fiction magazines and has since been adapted to books, comics, several films , television programs, video games, roleplaying games and other media...

. Plans for a third Conan movie and webisodes were made. With SLM stock price falling below the sale agreement level, Conan Properties, Inc. stock a legal battle ensued between with the previous owners,Baums, LSDC, Arthur Lieberman and the de Camps.

Bankruptcy

The company ran out of operating capital during the dot com meltdown and closed operations entirely by December 19, 2000.

Near the end of 2000, investigators began a review of stock transactions by co-founder Peter Paul and corporate officer Stephan Gordon. Paul fled to São Paulo
São Paulo
São Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...

, Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...

 to avoid prosecution, and the company filed for Chapter 11 Bankruptcy Protection on February 11, 2001. Paul was extradited back to the U.S. after the US Attorney in New York indicted him for violating SEC Rule 10b-5
SEC Rule 10b-5
SEC Rule 10b-5, codified at 17 C.F.R. § 240.10b-5, is one of the most important rules promulgated by the U.S. Securities and Exchange Commission, pursuant to its authority granted under § 10 of the Securities Exchange Act of 1934...

, a securities regulation felony. Paul pleaded guilty. He was sentenced to ten years in jail, and was incarcerated in October 2009.

During the Chapter 11 debtor in Possession proceedings, Stan Lee assigned the major character franchises he created to his new public company, POW! Entertainment, without the knowledge or approval of the Bankruptcy court. Courts later determined that Lee and his new partner Arthur Lieberman failed to disclose the existence and value of the Rights Assignment Lee made to the company when he founded it.

The company has since been the subject of numerous lawsuits, discussed below.

Productions

Some of Stan Lee Media's most important projects included the animated Web series The 7th Portal (where Stan Lee himself voiced the character Izayus), The Drifter, and The Accuser. The 7th Portal characters were licensed to an interactive 3-D movie attraction in four Paramount theme parks.

The 7th Portal

The 7th Portal became the first ever web animation series to succeed as a 3D ride attraction and to be developed for a $150 million dollar movie by Paramount with producer Mark Canton.

The first public use of the word Webisode
Webisode
A webisode is a short episode which airs initially as Internet television, either download or stream as opposed to first airing on broadcast or cable television. The format can be used as a preview, a promotion, as part of a collection of shorts, or a commercial.A webisode can be an episode...

 is attributed to the marketing and promotion of The 7th Portal. It is a portmanteau formed by the words 'web' and 'episode'.

The 7th Portal premiered on the new animation hub Shockwave, on February 29, 2000 when its global launch overwhelmed Macromedia's servers. It became the most successful web originated animated series, being picked up by Fox
Fox Broadcasting Company
Fox Broadcasting Company, commonly referred to as Fox Network or simply Fox , is an American commercial broadcasting television network owned by Fox Entertainment Group, part of Rupert Murdoch's News Corporation. Launched on October 9, 1986, Fox was the highest-rated broadcast network in the...

 in mid run, for distribution on TV in South America and Europe. Twenty-two episodes were made, of which the first twenty were shown on-line before the website went bankrupt. The final two episodes were only visible on television. All 22 episodes are on Youtube
YouTube
YouTube is a video-sharing website, created by three former PayPal employees in February 2005, on which users can upload, view and share videos....

.

Others

Other productions included the Evil Clone —a purported attempt to clone Stan Lee as a cartoon that wackily criticized many aspects of the media, including happy ending
Happy ending
A happy ending is an ending of the plot of a work of fiction in which almost everything turns out for the best for the protagonists, their sidekicks, and almost everyone except the villains....

s, the StanLeeMedia.net website—, and The Backstreet Project, a project including the Backstreet Boys
Backstreet Boys
The Backstreet Boys are an American vocal group, formed in Orlando, Florida in 1993. The band originally consisted of A. J. McLean, Howie Dorough, Brian Littrell, Nick Carter and Kevin Richardson. They rose to fame with their debut international album, Backstreet Boys...

. Different editions on The Backstreet Project comic books were released on the market. Six webisodes were also released in 1999 via StanLeeMedia.net.

Lawsuits

Starting in 2007, various parties, including some connected to co-founder Peter Paul, sought to take control of Stan Lee Media Inc of Colorado (SLMI), a successor company to Stan Lee Media, and to sue Stan Lee, Marvel Entertainment, and other parties, for intellectual property owned by Lee, his later company Pow Entertainment, or Marvel Comics, claiming that this property belonged in fact to Stan Lee Media Inc of Colorado. For clarity below, Stan Lee Media Inc of Colorado is referred to as SLMI, as opposed to the original Stan Lee Media, which is referred to as SLM.

The suits actually started with a preemptive strike by Stan Lee in January 2007, when Lee sued SLMI and Jim Nesfield, who was then running the company, claiming the company was committing $50 million worth of trademark infringement.

On March 15, 2007, Nesfield, representing shareholders of SLMI, filed a lawsuit in New York against Marvel Entertainment
Marvel Entertainment
Marvel Entertainment, LLC , formerly Marvel Enterprises and Toy Biz, Inc., is an American entertainment company formed from the merger of Marvel Entertainment Group, Inc. and Toy Biz, Inc....

 for $5 billion, claiming that Stan Lee's assignment of all of his creative rights to SLM made SLMI a co-owner of the characters that Lee created for Marvel.

On April 7, 2007 pursuant to a Resolution of the Board of Directors of Stan Lee Media Inc. of Colorado John Petrovitz was elected to the Board of Directors of the Company and appointed President of Stan Lee Media Studios, Worldwide.

On June 9, 2007, Peter Paul and his associates filed suit against POW Entertainment
POW Entertainment
POW! Entertainment is an American media production company formed by Gill Champion, Arthur Lieberman and former Marvel Comics editor and publisher Stan Lee in 2001. POW! is made up of primarily two companies, POW! Entertainment, Inc...

, Stan Lee, and other former executives of Stan Lee Media, accusing them of improperly transferring assets from SLM's bankruptcy to start POW Entertainment in November 2001 without the knowledge of the Bankruptcy Court or creditors of SLM. In July, they filed suit in California.

On July 27, 2007 Stan Lee Media Studios, Inc. was formed in Delaware.

In June of 2008 Barrons published the article "The Rage Offstage at Marvel" raising questions about Marvel Entertainment's title to its billion-dollar character franchises including Spiderman, Fantastic Four and the Incredible Hulk.

September 2008, Nesfield's suit from March 2007 was dismissed without prejudice. It would be replaced by a largely similar suit, again in New York, in January 2009.

On January 20, 2009, Martin Garbus
Martin Garbus
Martin Garbus is an American attorney. He has tried cases throughout the country involving constitutional, criminal, copyright, and intellectual property law. He has appeared before the United States Supreme Court as well as trial and appellate courts throughout the United States...

 held a press conference in New York announcing a new suit against Marvel Entertainment, Inc., in which he represented Nelson Thall and John Petrovitz against Marvel Enterprises, Inc., Marvel Characters, Joan Lee (Stan Lee's wife), Joan C. Lee (Stan Lee's daughter), Isaac Perlmutter (Marvel executive), Avi Arad (Marvel executive) and Arthur M. Lieberman (Marvel executive) for recovering more than $750,000,000 in profits owed by Marvel to Stan Lee Media since 1998. In the press conference Garbus explained his theory that Stan Lee retained an interest in his early characters by virtue of having been a 'co-creator' of those characters, and that he had assigned these to SLM in an October 15, 1998 agreement. Garbus believes that Marvel's claim to the characters rests on a similar agreement signed a month later, by which time Lee had nothing left to assign (having already given the characters to Stan Lee Media). Garbus believes that high levels of compensation given to Stan Lee by Marvel after a 2005 lawsuit indicate that Marvel acknowledged Stan Lee's co-creator status, and that this acknowledgment probably appears in the settlement agreement between the two (the agreement was sealed by the court).

On January 27, 2009, Judge Stephen Wilson ruled that Lee and POW Entertainment had illegally transferred the rights to the characters The Drifter, The Accuser and Stan’s Evil Clone from SLM, without the knowledge or consent of the Bankruptcy Court.

On March 17, 2009, A Colorado court gave a victory to Stan Lee, denying efforts by P.F.P. Family Holdings, a company affiliated with Peter Paul, to reconvene the December 2008 SLMI shareholder meeting. The plaintiffs had hoped to use the meeting to install themselves or their allies as directors of SLMI, but the court determined that there had been no quorum and thus no meeting to reconvene.

In September 2009, Garbus, complaining of "irreconcilable differences with his clients" was replaced as lead counsel by Oliver Armas at Chadbourne & Parke
Chadbourne & Parke
Chadbourne & Parke LLP, founded in 1902 by Thomas L. Chadbourne, currently has some 400 lawyers and tax advisors in 13 offices in ten countries...

, and the new firm sought to amend Garbus's original complaint.

On March 31, 2010, Judge Paul Crotty dismissed the New York lawsuit against Marvel, Stan Lee, and others, citing lack of standing, expiration of statute of limitations, and other causes.

On May 27, 2010 the Colorado Court of Appeals issued an order to reverse the Colorado Court decision of March 17, 2009 having determined that a sufficient number of shares were represented at the 2008 Board of Directors meeting to establish a quorum and elect the Board of Directors.

On July 26, 2010 SLMI moved to substitue SLMI as the real party of interest and to file a complain relating to November 2002 Order to Settle.

On September 10, 2010 New York attorney Lillian Laserson filed her "Declaration and Expert Opinion" Regarding Stan Lee Media concluding that "SLMI did not lose its rights of ownership under the October 1998 Assignment merely by the fact that it did not react to or challenge Lee's termination." Additionally on September 10, 2010 Attorney Raymond J. Dowd wrote a letter to Judge Paul Crotty requesting an "indicative ruling pursuant to Rule 12.1 of the Federal Rules of Appellate Procedure that SLMI's Motion To Vacate and Clarify Lack of Subject Matter Jurisdiction Over Non-Party SLMI ('Motion to Vacate') pursuant to Rule 60(b) of the Federal Rules of Civil Procedure raises a substantial issue."

On September 15, 2010 Raymond J. Dowd moved to substitute SLMI as the real party of interest and filed "Memorandum of Law in Reply and Further Support for Motion to Unseal and Motion to Substitute" in United States District Court Southern District of New York.

On October 18, 2010 the Colorado Supreme Court denied Stan Lee's appeal to reverse the Colorado Court decision of March 17, 2009 and announced its conclusion that there is no reasonable doubt of the validity of the shareholder's proxy appointment. Additionally on October 18, 2010 Raymond J. Dowd representing intervenor Stan Lee Media, Inc, sent a letter to United States District Judge United States District Court of New York Hon. Robert W. Sweet in regard to SLMI motion to intervene and unseal records of July 14, 2010. At this point, SLMI had an apparently valid board of directors for the first time since the bankruptcy filing. The company then hired new counsel, who petitioned Judge Wilson to lift his stay on the California proceedings. This was granted, and they filed a new, consolidated complaint in February 2011 They are seeking a jury trial over the question of whether or not they actually own the characters that Lee created.

On August 21, 2011 the day the Conan movie opened, SLMI sued Paradox Entertainment
Paradox Entertainment
Paradox Entertainment owns rights to many intellectual properties, the most famous of which is Conan the Barbarian as created by pulp author Robert E. Howard and expanded upon by many other authors over the years. Other properties include Bran Mak Morn, Kull, Solomon Kane, Mutant, Mutant...

, Conan Sales Co., Arthur Lieberman and other over the rights to Conan
Conan the Barbarian
Conan the Barbarian is a fictional sword and sorcery hero that originated in pulp fiction magazines and has since been adapted to books, comics, several films , television programs, video games, roleplaying games and other media...

as they claim Conan was improperly transferred to Conan Sales Co. and sold to Paradox.
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