Marvel Chairman Presents Another Bankruptcy Plan

Marvel Entertainment Group Inc. Chairman Ronald Perelman unveiled a second proposal to get the comic-book company out of Bankruptcy Court, drawing criticism from bondholders who succeeded in blocking the first plan.

Under the proposal, Marvel would combine its comic book and character-licensing businesses with Toy Biz Inc., which makes toys modeled on Marvel characters such as Spider Man and the Incredible Hulk. Marvel then would auction the combined company, mainly to repay secured creditors.

Bondholders said the plan is Perelman’s latest effort to hamper their recovery on $894 million of bonds. Perelman, who owns 80% of Marvel, in December offered bondholders and stockholders a 20% stake in a combined Marvel-Toy Biz. The new plan offers them warrants for 12.5% of the combined company.

“This proposal is even worse for Marvel shareholders and bondholders than the original Perelman plan,” the bondholders’ committee said in a statement. The panel called the proposal “an outrageous sweetheart deal for the banks and Toy Biz insiders.” The latest plan has been approved by Marvel’s lead lender, Chase Manhattan Bank.

Marvel said today that the minimum bid in an auction for the combined Marvel-Toy Biz would have to provide at least $430 million in cash to Marvel’s prebankruptcy secured lenders and $285 million, or $14 a share, for Toy Biz shareholders.

Secured lenders that are owed $725 million would receive proceeds from a new $250-million term loan and a five-year, $170-million note. They also would get a 28% stake in the new company and all of the stock of Marvel’s Fleer/SkyBox trading card and Panini sticker units.

Bondholders, led by financier Carl Icahn, and Marvel shareholders would get warrants for 12.5% of the new company.

Toy Biz stock was unchanged at 10.25 in late trading. Marvel stock rose .125 to 2.375.

Perelman in December proposed that his Andrews Group Inc. invest $365 million in Marvel, allowing it to acquire Toy Biz. He later withdrew the plan after bondholders objected.

A U.S. Bankruptcy Court ruled in February that Marvel bondholders could foreclose on and vote 80% of the company’s common shares. The court in March barred bondholders’ effort to replace Marvel Entertainment’s board, however.

If Marvel can’t proceed with the Toy Biz merger, the company said it would accept separate bids for its publishing and licensing businesses and its 26.7% stake in Toy Biz. If the Toy Biz transaction doesn’t proceed, Marvel said Toy Biz would receive a breakup fee of $7 million.

Marvel said Fleer/SkyBox and Panini also would be marketed and may be sold in a separate auction.