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MARVEL SAYS AGREEMENT WITH BANK CREDITORS
UNRAVELS ALTHOUGH MORE THAN 50% OF BANKS
APPROVE DEAL
NEW YORK, N. Y., OCTOBER 8, 1997 -- Marvel Entertainment Group (NYSE: MRV) announced today that a comprehensive settlement agreement struck two weeks ago among Marvel, High River Limited Partnership and Westgate International, L.P, and Chase Manhattan Bank, the agent for a syndicate of bank lenders, has unraveled although more than 50% of banks approved the deal. Chase advised Marvel that more than half of the bank lenders supported the deal but that it was unable to achieve the requisite two thirds' support. Marvel stated that it will seek to obtain new financing from High River and Westgate over the objections of the banks and will vigorously defend against the banks' efforts to appoint a Chapter 11 trustee in the 10-month old bankruptcy case. Marvel believes that the appointment of any trustee at this time would be extremely detrimental to an already very unstable situation. Additionally, the bank lenders have opposed any new borrowings by Marvel that could be repaid ahead of their existing loans. The Company stated that without new financing, Marvel may not be able to avoid a piecemeal liquidation and has no choice but to continue to pursue litigation against the banks in an effort to save the Company. The next hearing in Marvel's bankruptcy proceedings has been scheduled for October 24, 1997. Under the terms of the agreement-in-principle reached on September 22 and finalized on September 29, 1997, High River (an entity controlled by Carl C. Icahn), and Westgate (a New York-based money management firm) were to have purchased all pre- and post-petition bank claims from Marvel's bank lenders in exchange for $385 million in cash and the transfer of Marvel's Panini S.p.A. sticker business. High River and Westgate had already funded an escrow account in the amount of $385 million. The $385 million deposit will now be returned to High River and Westgate. Chase had until October 7, 1997 to deliver necessary consents from syndicate members and the Bankruptcy Court had scheduled a hearing for approval of the comprehensive settlement agreement for October 24, 1997. The Company said it was extremely distressed to learn of Chase's failure to obtain the necessary consents after Chase kept Marvel, High River and Westgate in round-the-clock negotiations during the last three months, apparently without the requisite support of its member banks. The Company added that Marvel's cash
The copyright of the article Marvel Creditor Agreement Unravels in Comic Books is owned by Robert Smithers. Permission to republish Marvel Creditor Agreement Unravels in print or online must be granted by the author in writing.
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