Legendary writer and editor Stan Lee, seemingly a magnet for lawsuits, has been drawn into yet another legal battle, one that could leave the future of his POW! Entertainment in question.
According to Hollywood, Esq., Lee and POW! executives Gil Champion and Arthur Lieberman, among others, have been sued for $3.6 million by two people who claim there was a conspiracy to inflate the worth of the media company’s assets at the time of a reverse merger in 2004 that allowed POW! to become publicly traded without slogging through the lengthy registration process.
Making the lawsuit more complex, or at least more dicey, is that one of the plaintiffs, Valerie Barth, worked for years as Lee’s public relations representative, and asserts she was instrumental in the creator receiving his star last year on the Hollywood Walk of Fame.
The claims are rooted in Lee’s departure in 2001 from the bankrupt dot-com Stan Lee Media — that company has its own winding history of lawsuits involving, at various times, its namesake, Marvel and Conan the Barbarian, among others — to form POW!, which in the past decade has struck deals with such companies as Disney, Archie Comics and BOOM! Studios. Three years later a reverse merger with a shell corporation called Arturian Entertainment allowed POW! to immediately go public.
Still following? Barth, whose PR consulting company Media Dynamics was the controlling shareholder of Arturion, and Ron Sandman, whose UltraVision Inc. was a minority shareholder, now allege that Lee and his partners misrepresented POW!’s assets and provided documents demonstrating that the company controlled Lee’s intellectual property, including his name and likeness, and downplayed threats of litigation. (That same intellectual property forms the core of Lee’s ongoing legal fight with Stan Lee Media.) According to Hollywood, Esq., Barth and Sandman have been so vocal in their accusations that POW! sued them, claiming fraud and abusive business practices.
In their counterlawsuit, the two allege that POW! fraudulently took control of Arturion, violated dozens of laws, and permitted Lee to divert and co-mingle revenues for consulting, literary works, interviews, honorariums and the like. In addition to the $3.6 million in compensatory damages, Barth and Sandman seek the removal of POW!’s board of directors, and the transfer of shares.
According to documents filed with the U.S. Securities and Exchange Commission, POW! Entertainment generated just $24,628 in net income in 2011; the previous year, the company saw a $1.1 million net loss.
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