LI-based Acclaim Entertainment unloads comic book business

Long Island Business News, May 6, 2005 by Claude Solnik

A trio of bidders have agreed to buy the rights to a wide range of superheroes from Acclaim Entertainment's roster for $925,000 for use in comics and other media, after an earlier offer to the bankrupt company fell through.

The winning group, which includes investors Ashok Kothari, Jason Kothari and Chandra Shamdasani, was one of three bidders for Acclaim Comics Inc., the firm's defunct comic book operations.

The group won out after former Marvel Comics marketing manager John Taddeo, who had prevailed in a bidding war, told Acclaim representatives he didn't plan to complete the deal.

The new group won the rights to a stable of figures such as Shadowman, Rai, Ninjak, Archer and Armstrong, Bloodshot, X-O Manowar, Bad Eggs, Armorines, Harbinger, Dr. Mirage, Eternal Warrior, Destroyer, Darque Passages, Quantum and Woody.

Acclaim's venture in the comic book business began in June 1994 when the video-game maker bought the Valiant comic book brand for about $55 million from Voyager Communications.

Acclaim planned to use the characters for its games and as a way of entering the world of publishing comics, until the comic-book market went sour.

Around the same time as Acclaim's purchase of Valiant, the comic- book market collapsed due to the increased supply of comic books and lower demand from customers, Greg Holland, operator of fan site ValiantComics.com, wrote on the Web site.

In 1996, just two years after buying Valiant, Acclaim stopped publishing Valiant Comics. It re-launched the comics later that year under the Acclaim brand name. In late 1998, Acclaim stopped publishing comic books altogether, only to resume in 1999.

They basically put it on the junk pile three years before they filed, said Allan B. Mendelsohn, trustee for the estate of Acclaim, which filed for bankruptcy on Sept. 1, 2004.

Acclaim so far has sold only three major assets, including video game Juiced, for about $10.5 million.

It was the hottest, the one closest to market at the time the case was filed, said Mendelsohn.

The firm also sold its Glen Cove headquarters to the Pistilli Group for $8.75 million and dumped physical assets such as furniture and fixtures in Glen Cove and in Austin, Texas, for more than $300,000 each.

Mendelsohn said he hopes to find a buyer for the firm's elaborate trade show booth, once part of Acclaim's marketing efforts, which remains in Las Vegas. And he's gearing up to find buyers for Acclaim's extensive catalogue of video games.

We're going to sell it. It's a question of finding the right buyer, said Mendel-sohn. We're interviewing brokers. We want to make sure it gets marketed to the right people.

He doesn't intend to bring in an appraiser, since he said the ultimate value of the list will be determined by bids rather than any estimates of the value.

I would say within the next six to eight months, we're going to try to get rid of the remaining catalog of games, Mendelsohn said. Appraisals generally tell you what somebody would lend against it. I'm interested in what it will sell for. The highest offer is what it's worth.

The acquisition of Acclaim Comics, however, at least would close the book on one part of the firm's past.

As for the new owners of the Valiant characters, it won't be easy to bring them back to life.

New Jersey-based Valiant Intellectual Properties has formed to make its own bid for the characters without paying a penny to Acclaim.

That entity applied for trademarks for Valiant character names, which they argue Acclaim let lapse.

If Valiant Intellectual obtains the rights to the names, the winners of the bid from Acclaim could still use the characters, but might be forced to debut them under a different name.