UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 10, 1997
MARVEL ENTERTAINMENT GROUP, INC.
Delaware 1-10779 94-3024816
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation
387 PARK AVENUE SOUTH, NEW YORK, NEW YORK 10016
(Address of principal executive offices and Zip Code)
(212) 696-0808
(Registrant's telephone number, including area code)
(Former Name or Former Address, if changed since last report)
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Item 5. Other Events.
Marvel Entertainment Group, Inc. (the "Company"), High River Limited
Partnership ("High River"), Westgate International L.P. ("Westgate"), Toy Biz,
Inc. ("Toy Biz"), Isaac Perlmutter, Avi Arad and The Chase Manhattan Bank have
reached an agreement in principle on certain key economic terms relating to
the chapter 11 bankruptcy cases of the Company and its subsidiary and parent
debtors. Consummation of the agreement in principle is subject to: (1)
negotiation and execution of definitive documentation regarding the agreement;
(2) approvals of the Boards of Directors of the Company and Toy Biz; (3)
approval by the holders of at least 67% in amount and 51% in number of the
secured lender claims (other than the secured lender claims against Panini (as
defined below)); and (4) approval of the United States Bankruptcy Court for
the District of Delaware, where Marvel's chapter 11 case is pending (the
"Bankruptcy Court"), none of which can be assured.
Pursuant to a plan of reorganization (the "Plan") to be proposed by
the Company and its subsidiary and parent debtors, Toy Biz, High River, and
Westgate, Marvel and Toy Biz will be combined (the "Toy Biz Merger") in a
transaction in which the stockholders of Toy Biz (other than the Company) will
receive, in exchange for their Toy Biz shares, 49% of the outstanding shares
of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company, as reorganized ("Reorganized Marvel").
Additionally, pursuant to the Plan, the currently outstanding shares
of Common Stock would be cancelled and the Company's equity holders (including
the holders of senior secured notes issued by the Company's parent holding
companies, Marvel Holdings Inc., Marvel (Parent) Holdings Inc. and Marvel III
Holdings Inc.) would be offered rights (the "Rights Offering") to purchase on
a pro rata basis: (1) new shares equal to 51% of the outstanding Common Stock
of Reorganized Marvel for an aggregate price of $170 million, and (2) $225
million of new debt securities of Reorganized Marvel. High River and Westgate
will appoint a majority of the board of directors of Reorganized Marvel. The
proceeds of the rights offering will be used to retire all of the bank claims
acquired by High River and Westgate as described below.
The global settlement also contemplates that High River and Westgate
would purchase all of the prepetition and postpetition claims and liens of the
secured lenders of the Company and its subsidiaries, except for $120 million
of indebtedness of the Company's wholly-owned subsidiary, Panini, S.p.A., and
$80 million to $95 million of indebtedness of the Company's Fleer/SkyBox
businesses (which indebtedness would not be indebtedness of the Company), in
exchange for: (a) $395 million in cash; and (b) five year warrants to acquire
ten percent (10%) of Reorganized Marvel, which warrants shall have an exercise
price based upon a net equity value of $525 million with no more than $225
million in term indebtedness for borrowed money (exclusive of indebtedness for
working capital). Under this arrangement, Fleer/SkyBox and Panini would be
auctioned for sale for the benefit of the Company's secured lenders. Pending
such auction, Fleer/SkyBox and Panini would be operated for the account of
such secured lenders, and all expenses of such operation would be the
responsibility of the Company's secured lenders. The secured lenders will
receive 100% of the common stock of Panini and Fleer/SkyBox at the earlier of
(i) such time as they shall request it in writing, or (ii) the consummation of
a plan of reorganization for the Company and its subsidiary and parent
debtors. The Company would receive a $200 million to $215 million credit
against the indebtedness held by the Company's secured lenders at such time as
an order of the United States Bankruptcy Court for the District of Delaware
(the "Bankruptcy Court") in form and substance reasonably acceptable to High
River, Westgate, and the secured lenders, approving the acquisition and
settlement of the secured lender claims (other than the specified claims
against Panini and Fleer/SkyBox) becomes a final order.
Based on the foregoing and with a full reservation of all rights,
the secured lenders will not object to the Company's continued use of cash
<PAGE>
collateral through July 17, 1997 pursuant to the same terms and conditions,
and being afforded the same protections, set forth in the current financing
and cash collateral orders approved by the Bankruptcy Court.
No assurances can be given that any definitive agreements will be
reached or that, if reached, the transactions contemplated thereby will be
consummated.
Item 7. Financial Statements and Exhibits.
99.1 Press Release dated July 10, 1997
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
MARVEL ENTERTAINMENT GROUP, INC.
Date: July 14, 1997 By:/s/ August J. Liguori
------------------------
Name: August J. Liguori
Title: Vice President, Finance
[Signature page for Form 8-K filed with respect to comprehensive settlement.]
<PAGE>
STATEMENT OF CARL ICAHN, CHAIRMAN OF MARVEL
ENTERTAINMENT, ON AGREEMENT TO COMBINE
MARVEL AND TOY BIZ
______________________________________________________________________
NEW YORK, JULY 10, 1997 - Carl Icahn, Chairman of Marvel Entertainment
Group Inc. (NYSE:MRV), today issued the following statement regarding the
agreement in principle reached today among Marvel, its bondholders, Toy Biz,
Inc. (NYSE: TBZ), and The Chase Manhattan Bank to combine Marvel and Toy Biz
in a single company controlled by Marvel's current owners.
"We're pleased that only three weeks after taking control of the Marvel
Board we have been able to get all parties together on a mutually beneficial
agreement that will reunite Marvel and Toy Biz as one company. Conflicts and
divisiveness between the toy company and the rest of Marvel have been a major
problem over the last few years and have hurt all of Marvel's constituencies.
With this agreement, this problem should now be rectified, and all of Marvel's
properties and assets will be combined under one roof where they belong. We
want to move quickly to negotiate definitive documentation and obtain the
requisite approvals from the Marvel and Toy Biz Boards that will enable us to
submit a single, consensual plan to the bankruptcy court."
Contact: George Sard/Paul Caminiti/Stephanie Pillersdorf
Sard Verbinnen & Co
212/687-8080
