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MARVEL ENTERTAINMENT GROUP FILES VOLUNTARY CHAPTER 11 PETITION TO IMPLEMENT FINANCIAL RESTRUCTURING PLAN
-- Plan Contemplates Marvel Receiving $525 Million In New Funds and Trade Partners and Employees Being Paid On Time and In Full --
-- Business To Continue Uninterrupted -- NEW YORK, N. Y., December 27, 1996 --
Marvel Entertainment Group, Inc. (NYSE: MRV) today announced that, in order to implement a proposed $525 million recapitalization that will enable Marvel to pursue its new strategic initiatives and achieve sustained profitability, Marvel has filed a voluntary petition for reorganization in the U.S. Bankruptcy Court for the District of Delaware in Wilmington. The filing will ensure that Marvel can continue all business operations without interruption while it obtains necessary approvals of its financial restructuring plan. The filing was necessitated by the failure of the holders of bonds issued by Marvel's holding companies to reach agreement regarding any alternative plans for the Company's future. As a result of today's petition, Marvel will be able to avail itself of the orderly processes of the court to complete the reorganization and move forward without the necessity of bondholder consent. Holders of Marvel holding company bonds were asked more than a month ago to support Marvel's plan by waiving certain restrictions contained in the bonds. However, the failure to reach agreement with bondholders, many of whom are so-called "vulture investors" who recently accumulated the bonds, delayed Marvel from moving forward with its plan in a timely fashion.
"We would have preferred to re-capitalize Marvel without having to seek the aid of the court, but the actions and positions taken by the bondholders prevented that approach," said Scott Sassa, Chairman and CEO of Marvel. "The key to putting Marvel on track for a dynamic and profitable future is a quick resolution to this situation, and we want to get on with it"
"We are taking steps that are not typical in this situation," said Mr. Sassa. "We intend to pay all of our bills, including those submitted prior to the filing, on time and in full, and maintain normal credit terms with our suppliers and licensers. We expect to continue doing business with our customers and licensees under normal business terms. We will fund and move forward with all of our new strategic investments, and employees will be paid in full and on time. We will gain a valuable new asset in Toy Biz, Inc. and new funds that will allow us to face the future with strength and confidence."
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