It looks like Spider-Man, Captain America, the X-Men and their crime-fighting cohorts are broke. Marvel Entertainment Group, publisher of Marvel Comics, today filed for Chapter 11 bankruptcy protection in New York.

Over the past three years, Marvel has been bleeding money thanks to a marked decline in comic-book and trading card sales--its core businesses. Last month, the company fired 115 employees, one-third of its work force.

Under a proposed financial restructuring plan, the Andrews Group, a New York investment firm, will pump $365 million into Marvel. That investment will allow Marvel to purchase a profitable toy company, Toy Biz Incorporated, in an effort to strengthen Marvel's financial standing.

Marvel says it should be back on solid financial ground by mid-1997. The company also plans to develop Marvel Studios, a film and TV production house, create Marvel Mania theme restaurants, release Marvel Interactive software and create Fleer/SkyBox trading card initiatives. "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," said Scott Sassa, Marvel's chairman and CEO.

The bankruptcy declaration also brings to a head an internal power struggle between investor Ron Perelman--who controls 80 percent of the company and runs the Andrews Group--and bondholders, including fellow takeover artist Carl Icahn. In November, Perelman had threatened bondholders with the bankruptcy filing unless they approved a reorganization plan that dilutes public stockholders ownership of Marvel. But the bondholders balked.

Today's filing allows Marvel to reorganize without bondholder consent. Eight shareholders have filed lawsuits to block the deal.

Under the terms of Chapter 11, Marvel said it will pay all its bills, including those submitted prior to the filing, on time and in full, and maintain normal credit terms with its suppliers and licensors.

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