Ronald Perelman Loses Appeal of Marvel Suit

Billionaire financier Ronald Perelman lost an appeal of a lawsuit that accused him of diverting $553.5 million in notes issued by Marvel Entertainment Co. when he was its controlling shareholder. He now faces the prospect of a trial.

Marvel, the world’s largest comic book company before it filed for bankruptcy protection in 1996, publishes Spider-Man, X-Men and the Incredible Hulk comics. Perelman and other Marvel directors were accused of transferring proceeds from the notes to other companies he controlled in the mid-1990s. After the bankruptcy filing, Marvel’s litigation trustees sued the directors to recoup the money.

U.S. District Judge Kent Jordan in Wilmington, Del., ruled in favor of the directors and dismissed the suit.

In a ruling made public this week, the U.S. 3rd Circuit Court of Appeals reversed that decision and sent the case back for further proceedings.

“The record before us would support a finding that Perelman’s companies received $553.5 million in financing they would otherwise have been unable to secure,” a three-judge panel said.

The decision is a setback for Perelman, 62, who won more than $1.4 billion in damages in an unrelated suit in May after a Florida jury ruled that Morgan Stanley gave him bad financial advice in the 1998 sale of his stake in Coleman Co. to Sunbeam Corp.

Christine Taylor, a spokeswoman for Perelman and his MacAndrews & Forbes Holdings Inc., said, “We look forward to vindicating our position” at trial.

Marvel trustees say Perelman and other directors caused the company to issue $553.5 million in notes in 1993 and 1994, and “none of the proceeds went to Marvel, or were used for Marvel’s benefit,” according to the appeals court ruling.

Instead, the trustees allege, the directors unjustly enriched themselves.

Marvel emerged from bankruptcy in late 1998 as a unit of Toy Biz Inc., which renamed itself Marvel Enterprises Inc.