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By Jacob Rund
Comic book baron and Spider-Man co-creator Stan Lee is being sued in Delaware state court for alleged disclosure failures and fiduciary duty breaches surrounding the $11.5 million sale of his media company, POW! Entertainment Inc.
The purported class action lawsuit, filed Jan. 24 in the Delaware Court of Chancery by former POW! stockholder Richard Norwood, claims Lee and two other executives didn’t make investors aware of the price each POW! share would fetch before stockholders met to vote on the sale.
Lee, the former chairman of Walt Disney Co. subsidiary Marvel Comics, served as POW!'s chairman since it was formed through a reverse merger in 2004. The company developed animated and reality-based TV shows and TV movies and was acquired last year by Hong Kong-based Camsing Entertainment International Inc.
According to the complaint, deferred compensation agreements held by Lee and Arthur Lieberman, a now-deceased co-founder, introduced conflicts of interest into the sale.
Despite these “clear” conflicts, the board never adopted a code of ethics or established committees “to ensure the conflicts were properly isolated during negotiations,” the complaint said.
The suit says Lee, Lieberman and President Gill Champion collectively held a controlling stake in the company, and alleges the company did not have appropriate internal controls in place.
The case is Richard Norwood v. Stan Lee, Del. Ch. , filed 1/24/2017.
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