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Courthouse Steps

By ALM Staff | Law Journal Newsletters |
August 02, 2004

CASE CAPTION: Marvel Enterprises Inc. and Marvel Characters Inc. v. The Walt Disney Co., The Walt Disney Studios Inc., BVS Entertainment, BVS International N.V. and ABC Family Worldwide, L.A. Superior Court # BC318855.

CAUSES OF ACTION: Breach of written contract; breach of implied covenant of good faith and fair dealing; accounting; unfair business practices; intentional interference with prospective economic advantage; and fraud.

COMPLAINT ALLEGATIONS: Disney's accounting statements claim that series using Marvel characters continue to lose money and that Marvel is not entitled to any profit distribution despite increased demand for telecasts and home videos because of hit movies produced by studios other than Disney. Disney hadn't produced books and records, blaming poor record keeping by its predecessor, Fox Family. Disney overpaid for Fox Family by billions of dollars and failed to develop a viable marketing strategy for the valuable intellectual property of Marvel that it acquired. Fox made sweetheart deals with corporate affiliates and Disney continues to exploit them to support its claim that none of the series have recouped their costs and shown any profit. Disney has also failed to market the properties to avoid competition with its own animated programming. Disney has refused to allow Marvel to audit accountings through 2003 until disputes to 2002 have been resolved, in order to conceal handsome profits made when it repackaged and re-released “Spider-Man” videos to coincide with the May 2002 Sony “Spider-Man” movie release. The series feature “The Incredible Hulk,” “X-Men” and Spider-Man. Disney acquired some of them with Fox Family in 2001. (Disney got X-Men in an agreement with Saban Entertainment and Saban International in 1993.) Disney has refused to credit Marvel with nearly $16 million due under the Spider-Man agreement first made with Fox Family.

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