MARVEL'S DISMAL NEWS

When asked about the source of their losses, both companies reported that costs associated with the current bankruptcy battle were a primary contributor to their decline. Things are so bad at Marvel that an attorney for Carl Icahn was reported to have said that "There's likely enough money operationally to keep the lights on and the doors open (at Marvel) at least until the end of the year...but we have no money to write new licensing business, to attract key employees, or to resuscitate pre-bankruptcy plans for new ventures."

A possible bright note in today's dismal news is that all parties appear to have agreed to move the battle for Marvel from Judge Helen Balick's U.S. Bankruptcy Court to the U.S. District Court of Judge Roderick McKelvie. McKelvie has scheduled a hearing on Thursday, November 20th to hear arguments in regard to the cases by the various competing parties. The primary point in question is whether to either appoint a bankruptcy receiver (which is being sought by the secured lenders led by Chase Manhattan Bank and Toy Biz, Inc.) or to allow Marvel to move forward with its claims of "improper, manipulative, and collusive conduct" against Chase, the other secured lenders, Toy Biz, Avi Arad, Issac Permutter, and Ronald O. Perelman.

While Judge McKelvie may not rule immediately, it is widely believed that any judge would be more decisive than Judge Helen Balick, who consistently refused to act in a manner which would bring the Marvel bankruptcy to resolution. It is also believed that ending the litigation in regard to Marvel would possibly revive Carl Icahn's reported plans to sell the company to a major entertainment conglomerate. As matters now stand, Icahn is in the uncomfortable position of being at risk of losing not only his own considerable investment in the Perelman bonds he purchased to wrest control of Marvel, but also the funds of his allied investors. At the same time, Avi Arad and Issac Perlmutter face the possibility of losing control of Toy Biz, and Chase and the other secured creditors are at risk for only receiving pennies on the dollar for their loans. To say that these potentially huge losses act as a goad for all parties to seek a resolution is clearly an understatement.