SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_____________
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 8)
MARVEL ENTERTAINMENT GROUP, INC.
(Name of Issuer)
Common Stock, par value $.01 per share
(Title of Class of Securities)
573913 10 0
(CUSIP Number)
Marvel Holdings Inc.
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
Copy to:
John M. Reiss
White & Case
1155 Avenue of the Americas
New York, NY 10036
(212) 354-8113
May 7, 1997
________________________________________________________
(Date of Event which Requires Filing of this Statement)
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If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box [ ].
_____________
Check the following box if a fee is being paid with this statement [ ].
Page 1 of 5 Pages
Exhibit Index appears on page 4.
<PAGE>
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Marvel Holdings Inc.
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a)[ ]
(b)[X]
3 SEC USE ONLY
4 SOURCE OF FUNDS
00
5 CHECK BOX IF DISCLOSURE OR LEGAL PROCEEDINGS IS
REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES 7 SOLE VOTING POWER
BENEFICIALLY 50,932,167
OWNED BY EACH
8 SHARED VOTING POWER
REPORTING PERSON
WITH
9 SOLE DISPOSITIVE POWER
50,932,167
10 SHARED DISPOSITIVE POWER
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING
PERSON
50,932,167
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES [ ]
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
50.03%
14 TYPE OF REPORTING PERSON
CO
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This statement amends and restates the Schedule 13D, relating to the
common stock, par value $.01 per share, of Marvel Entertainment Group, Inc.
("Marvel"), as originally filed with the Securities and Exchange Commission
(the "Commission"), on May 18, 1993 by New Marvel Holdings Inc., MacAndrews &
Forbes Holdings Inc. ("M&F"), and Mafco Holdings Inc. ("Mafco"), as amended by
Amendment No. 1, filed with the Commission on October 12, 1993 by Marvel
Holdings Inc. ("Marvel Holdings"), Marvel (Parent) Holdings Inc. ("Marvel
Parent"), Four Star Holdings Corp., Andrews Group Incorporated ("Andrews"),
M&F and Mafco, as amended by Amendment No. 2 filed with the Commission on
November 15, 1996 by Marvel Holdings, Marvel Parent, Andrews and Mafco, as
amended by Amendment No. 3, filed with the Commission on December 31, 1996 by
Marvel Holdings, Marvel Parent, Andrews and Mafco, as amended by Amendment No.
4 filed with the Commission on March 10, 1997 by Marvel Holdings, Marvel
Parent, Andrews and Mafco, as amended by Amendment No. 5 filed with the
Commission on April 25, 1997 by Marvel Holdings, as amended by Amendment No. 6
filed with the Commission on April 29, 1997 by Marvel Holdings, and as amended
by Amendment No. 7 filed with the Commission on May 1, 1997 by Marvel
Holdings.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
EXHIBIT NO. Description
7 Letter to all of the Members of the Board of
Directors of Marvel from Marvel Holdings
and the Official Bondholders Committee,
dated May 7, 1997.
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated May 12, 1997
MARVEL HOLDINGS INC.
By: /s/ Carl C. Icahn
Name: Carl C. Icahn
Title: Chairman and President
Signature page for Schedule 13D, Amendment No. 8, which attaches as an exhibit
the May 7, 1997 letter to Marvel Directors from Marvel Holdings Inc. and the
Official Bondholders Committee.
<PAGE>
Exhibit 7
MARVEL HOLDINGS INC
c/o Icahn Associates Corp.
767 Fifth Avenue, 47th Floor
New York, New York 10153
(212) 702-4300
May 7, 1997
BY FACSIMILE
BY FEDEX
BY REGULAR U.S. MAIL
TO: ALL DIRECTORS OF MARVEL ENTERTAINMENT GROUP, INC.
(See attached Distribution List)
Re: Fiduciary Duties to the Stockholders of Marvel Entertainment Group,
Inc.
Gentlemen:
I write this letter on behalf of Marvel Holdings, Inc. ("Holdings"), the
50.03% stockholder of Marvel Entertainment Group, Inc. ("Marvel"), and the
Official Bondholders Committee (the "Committee"), who represents the bonds
that are secured by, among other things, an additional 28.78% of the issued
and outstanding stock of Marvel.
In order to fulfill your fiduciary duties to the stockholders of Marvel
and to avoid potentially acrimonious and protracted litigation, swift action
is required on your part. Marvel has recently announced its intention to file
a plan of reorganization that would wrongfully strip the stockholders of their
investment in Marvel. Pursuant to Marvel's proposal, the outstanding stock in
Marvel would be canceled without consideration even though the market
currently values the stock of Marvel at over $200 million and the original
Marvel reorganization plan (filed on December 27, 1996) valued the stock at
approximately $90 million. This new proposed plan must not be permitted to
proceed. You must not permit the bank lenders of Marvel (the "Bank Group") to
wield the over $1 billion dollars in financing and lending relationships they
have with other companies owned or controlled by Ronald O. Perelman in order
to improperly subvert Marvel's reorganization in blatant derogation of
stockholder interests.
You have a legally mandated duty of care and duty of loyalty to all of
the stockholders of Marvel. Marvel's current circumstances do not modify
these duties; given Marvel's reliance on its solvency at the commencement of
these chapter 11 cases, a change of position now would be perceived as a
baseless fabrication put forth for the sole purpose of abdicating your
fiduciary duties to stockholders. Thus, you are legally prohibited from
allowing Ronald O. Perelman and his associates and their advisors, with their
myriad of conflicting interests, to wipe out the equity in Marvel and
overcollateralize the Bank Group. Your failure to resist this illegal outcome
and to fully comply with your fiduciary duties will expose you to substantial
liability and ensure Marvel of being locked in expensive and otherwise
unnecessary litigation for the foreseeable future.
As you probably know, Holdings and the Committee have recently filed a
proposed plan of reorganization of their own for Marvel (the "Stockholder
Plan") pursuant to which all creditors, including in particular the Bank
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Group, would be satisfied in full, all stockholders will retain their shares,
and $365 million of new equity capital will be invested in Marvel pursuant to
a guaranteed rights offering to Marvel's stockholders (the "Rights Offering").
Under the Stockholder Plan, the Bank Group will receive $100 million in cash
(assuming that is the balance at confirmation of the DIP loan provided by the
Bank Group), the stock or assets of Fleer/SkyBox and Panini (which, were
financed by the Bank Group for in excess of $500 million and which were valued
as of December 1996 by Marvel's financial advisors at between $305 - $385
million), and a secured promissory note for the remaining amount owed to the
Bank Group (which we have estimated at approximately $240 million).
In contrast to the Stockholders' Plan, according to a press release
issued by Marvel's management last week, Marvel has entered into a letter of
intent with Toy Biz, Inc. ("Toy Biz") and the Bank Group to file a plan of its
own (the "Proposed Management and Insiders Plan"), pursuant to which all
creditors of Marvel will be satisfied in full, Toy Biz will be merged into
Marvel, and all current stockholders will be stripped of their interests.
Under the Proposed Management and Insiders Plan, the Bank Group will receive
$250 million in cash (which is to be raised by a new loan to Marvel from an as
yet unidentified lender), the stock of Fleer/SkyBox and Panini (which the Bank
Group and management now inexplicably value at only $200 million), a secured
promissory note in the amount of $170 million, plus 28% of the new common
stock of Marvel. Apparently the balance of the new stock of Marvel will be
issued to Toy Biz and its owners, leaving Marvel stockholders with only
warrants to buy stock in the future.
We strongly urge the Board of Marvel to carefully review the Stockholder
Plan (which has already been filed with the Bankruptcy Court) and compare it
to the Proposed Management and Insiders Plan (which, to our knowledge, has not
yet been filed), before you permit Marvel's management to proceed with their
proposal.
We believe that a good faith effort to evaluate the two plans fairly and
to fulfill the Board's fiduciary duty to the stockholders requires, at a
minimum, that the review be conducted by a committee composed exclusively of
disinterested Directors (i.e., Directors other than Ronald O. Perelman and his
associates, including the members of management who have previously indicated
their intention to join Andrews Group upon confirmation of a plan) receiving
independent legal and financial advice. We are confident that such a review
will lead you to the same conclusion we have reached: that the Proposed
Management and Insiders Plan unfairly favors the Bank Group, overvalues Toy
Biz, results in a less viable Marvel than the Marvel envisioned under the
Stockholder Plan, and improperly deprives your stockholders of their
interests. Under such circumstances, you should prohibit management from
filing the Proposed Management and Insiders Plan and taking any action to
impede or frustrate the Stockholder Plan. You should also require management
to withdraw its request for authority from the Bankruptcy Court to pay Toy Biz
a $7 million break-up fee.
While there are many similarities between the two plans -- they both
provide for the payment in full of all creditors, and the satisfaction of the
Bank Group claims is achieved with the distribution to the Bank Group of
Fleer/SkyBox and Panini, cash, and a promissory note -- there are a number of
significant differences that clearly demonstrate management's total
abandonment of its duties to stockholders in the interest of unfairly
preferring the Bank Group; a bank group that, perhaps not coincidentally, is
lead by the very same bank that in March announced it had made or underwritten
over $1 billion in financing to Revlon, another Perelman company. For present
purposes, the most noteworthy of the differences between the two plans are the
following: (1) under the Stockholder Plan, Fleer/SkyBox and Panini are valued
at approximately $385 million, while the Proposed Management and Insiders Plan
values the same assets at only $200 million; (2) under the Stockholder Plan,
Marvel will retain its current 27% ownership interest in Toy Biz and compel
Toy Biz to pay its fair share of promotional and advertising expenses, while
the Proposed Management and Insiders Plan contains yet another overpriced
merger with Toy Biz; and (3) under the Stockholder Plan, $365 million of new
<PAGE>
capital is raised in the form of equity infused by the current owners of
Marvel under the Rights Offering, while the Proposed Management and Insiders
Plan relies on $250 million of additional debt and the merger of a struggling
Toy Biz. As a result of these material differences, the Stockholder Plan
provides for the retention of equity, while the Proposed Management and
Insiders Plan cancels it. Given the gravity of the consequences, these
differences should be carefully considered and evaluated, particularly in
light of Perelman's other relationships with the Bank Group.
The $200 million valuation of Fleer/SkyBox and Panini is particularly
egregious. As of December 1996, Marvel's own financial advisors valued these
assets at $305 million to $385 million. How can the value have been cut
nearly in half in 4 months time? Moreover, it should be remembered that Fleer
was purchased in 1992 for $287 million, SkyBox was purchased in 1995 for $165
million, and Panini was purchased in 1994 for $162.4 million, with loans
provided by the Bank Group in the aggregate amount of over $500 million. How
can the combined value of these assets now be a mere $200 million? Is this an
admission of gross mismanagement? Or did management grossly overpay for these
assets in the first place? Or perhaps, neither is true and management is now
simply attempting to favor the Bank Group because of its other Perelman
connections. Unlike the stockholders and bondholders, whose consent and input
was not requested in connection with the acquisition of these assets, the Bank
Group not only approved, but financed, these transactions on the basis of
whatever due diligence they deemed appropriate at the time. Given the Bank
Group's complicity in these deals, why is 100% of the purported loss now being
imposed on the stockholders?
The apparent overvaluation of Toy Biz is equally inexplicable. The stock
of Toy Biz has closed at an average price of $9.37 over the past 30 trading
days. Why then is a financially distressed Marvel prepared to pay at least
$14.00 per share, a 50% premium over market? Toy Biz has recently reported
quarterly earnings of a mere $0.02 per share, and this is without having to
pay any royalties for the use of Marvel's characters and without having to pay
any promotional or advertising expenses, all of which have been absorbed by
Marvel. Most importantly, how can management recommend the Toy Biz
acquisition when it apparently provides no value to stockholders? In the
absence of providing a return to stockholders, there is simply no reason for
Marvel to be engaged in acquisitions at this time. Perhaps not
coincidentally, it appears that the only party benefited by the proposed
acquisition is the Bank Group, which will receive an enhanced collateral pool.
In addition to satisfying all creditors in full while preserving
stockholder interests, the Stockholder Plan also produces a substantially
stronger company than would result under the Proposed Management and Insiders
Plan. Under the Stockholder Plan, Marvel will retain approximately $200
million in cash after payment of all confirmation obligations and have bank
debt of only $240 million. In contrast, the Proposed Management and Insiders
Plan leaves Marvel with $0.00 cash and burdens the Company with $420 million
of bank debt. This distinction alone should lead the Board to the conclusion
that the Stockholder Plan should be pursued and the Proposed Management and
Insiders Plan abandoned.
The Proposed Management and Insiders Plan is apparently premised on the
contrived notion that Marvel is insolvent and that its shares are worthless.
This view, however, has been clearly refuted not only by the marketplace, but
by the Bankruptcy Court in its decision granting the Committee motion for
relief from the automatic stay. It also contradicts Marvel's own recent
public positions: Marvel implicitly relied upon its solvency to obtain the
extraordinary relief of getting Bankruptcy Court permission to pay prepetition
unsecured claims in full prior to the confirmation of a plan; the plan
originally filed by Marvel, which provided for the payment in full of all
claims and the retention of shareholder interests was similarly premised on
Marvel's solvency.
Based on the fact that Marvel is solvent and its shares have value, the
Proposed Management and Insiders Plan is not only unconfirmable, but
<PAGE>
constitutes an utter abdication of Marvel's fiduciary duties to its owners.
This should not be tolerated by Marvel's Board and will not be tolerated by
its stockholders. In that regard, we draw your attention to the attached
press release indicating that the Official Equity Committee appointed in
Marvel's chapter 11 case has compared the Stockholder Plan to the proposed
Management and Insiders Plan and has voted unanimously to support the
Stockholder Plan.
In connection with your review and consideration of the matters addressed
herein, the Stockholder Plan, and the Proposed Management and Insiders Plan,
you may contact Carl
<PAGE>
Icahn at (212) 702-4333 to discuss these issues more fully or any questions or
comments you may have.
Very truly yours,
/s/ Vincent J. Intrieri
Vincent J. Intrieri
Secretary and Treasurer, Marvel Holdings, Inc.,
Vice Chairman, The Official Bondholders
Committee
cc: Paul Shapiro, Esq.
<PAGE>
Attachment
Equity group backs Marvel <MRV.N> bondholder plan
PHILADELPHIA, May 6 (Reuter) - A committee of equity security holders of
Marvel Entertainment Group Inc said Tuesday that they unanimously support the
reorganization plan by the Marvel bondholders' committee.
The committee said the bondholders's plan and a separate plan proposed by
the debtors and Toy Biz Inc <TBZ.N> offer full payment to the debtors' secured
lenders.
"But the equity committee determined that the bondholders' plan provided
for significantly better treatment to Marvel stockholders," said Gary
Schildhorn, counsel for the equity committee.
Marvel bondholders filed a reorganization plan April 29, a day after the
comic book publisher announced a reorganization plan of its own seeking to
spin off its publishing and licensing business and combine them with Toy Biz
Inc.
The equity committee had said that day that it opposed the plan by Toy
Biz and Marvel, which owns about 25 percent of Toy Biz stock.
Under the bondholder plan, the banks would receive the distribution of
the stock of two Marvel subsidiaries -- Panini and Fleer/Sky Box -- and a
secured note for the balance of the indebtness owed them, Schildhorn said.
In addition, the debtor-in-possession loan of $100 million would be paid
in cash, Schildhorn said.
Under the Toy Biz plan, Marvel's banks would hold about 28 percent of the
company and get 100 percent of Marvel's Fleer/Sky Box trading cards business
and 100 percent of its Panini sticker businesses.
Toy Biz shareholders would own the other 72 percent of Marvel. The plan
also includes a $365 million rights offering and the creation of a transition
team to resuscitate the company, which filed for Chapter 11 in December.
REUTER
Rtr 19:54 05-06-97
:TICKER:MRV TBZ
:SUBJECT:RP&S COBO PUB MNA USA
Copyright (c) 1997 Reuters
