THE ANDERSEN FIRM

SEAN P. SHEPPARD (admitted Pro Hac Vice)

1200 Plantation Island Dr. S, Ste. 220
St. Augustine, FL 32080
Telephone: (904) 471-5040
Fax: (904) 461-9312
O’DONNELL & ASSOCIATES
PIERCE O’DONNELL (State Bar No. 081298)
JACK G. CAIRL (State Bar No. 105335)
550 South Hope Street, Suite 1000
Los Angeles, CA 90071
Telephone: (213) 347-0290
Fax: (213) 347-0299
Attorneys for Defendants
JAMES NESFIELD, A.F. GALLOWAY
DOUGLAS C. COGAN

UNITED STATES DISTRICT COURT

CENTRAL DISTRICT OF CALIFORNIA

QED PRODUCTIONS, LLC, et al., CASE NO. CV 07-00225 SVW (SSx)

Plaintiffs, [Hon. Stephen V. Wilson]
v.
DEFENDANTS’ MEMORANDUM
OF POINTS AND AUTHORITIES IN
JAMES NESFIELD, et al., SUPPORT OF DEFENDANTS’
Defendants. MOTION FOR SUMMARY
JUDGMENT OR SUMMARY
ADJUDICATION

[Fed. R. Civ. P. 56]

[Defendants’ Memorandum of Points

and Authorities, Statement of Genuine
Issues; Supporting Declarations, and
Compendium of Exhibits filed
concurrently herewith]
 I. INTRODUCTION
The defendants are entitled to summary judgment on two (2) bases; (1)
plaintiffs do not have standing to bring any claim asserted in the First Amended
Complaint (hereinafter “FAC”) due to the fact that none of the plaintiffs is the legal
owner of the rights and/or properties being sued upon; and (2) with regard to any
claims brought derivatively by plaintiff, Gill Champion, purportedly on behalf of
Stan Lee Media, Inc., a Colorado corporation (hereinafter “SLM”), said plaintiff has
not properly and adequately pled any causes of action upon which relief may be
granted, and cannot fairly and adequately represent the interests of SLM
shareholders due to the fact that he is also the acting President and Chief Operating
Officer of plaintiff, POW! Entertainment, Inc. (hereinafter “POW!”), which is the
parent company of plaintiff, QED Productions, LLC (hereinafter “QED”).
II. THE PLEADINGS
The plaintiffs have filed an eight (8) count complaint against the defendants.
The plaintiffs admit in their FAC that (1) SLM, by and through its predecessor in
interest, Stan Lee Entertainment, Inc., was founded in 1998 for the purpose of
acquiring certain of those assets at issue in this pending action,1 (2) that SLM was
formed through a reverse merger in 1999 and acquired the assets of its predecessor,
Stan Lee Entertainment, Inc.,2 (3) that when SLM was formed through a reverse
merger in 1999 and acquired the assets of its predecessor, Stan Lee Entertainment,
Inc., those assets . . . did include ownership and copyright of any super-hero
characters or other intellectual properties created and developed by Stan Lee
thereafter, in connection with this employment at SLM,3 (4) that on February 16,
2001, SLM filed for Chapter 11 bankruptcy protection in the United States
Bankruptcy Court, Central District of California, Case No. SV-01-11329-KL, jointly

1
Plaintiffs’ FAC at ¶ 15.
2
Id. at ¶ 19.
3
Id. at ¶ 19.

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administered with Case No. SV-01-11331-KL (hereinafter referred to as the
“Bankruptcy Case”),4 (5) that the plaintiff, Stan Lee, on behalf of SLC, LLC,
entered into an agreement with SLM, debtors-in-possession in the Bankruptcy Case,
to acquire all rights to certain intellectual properties and produced entertainment
projects, including properties known as The Accuser, The Drifter and Stan’s Evil
Clone a/k/a Evil Clone (hereinafter referred to as the “Properties”),5 and (6) that the
aforementioned agreement between Stan Lee (on behalf of SLC, LLC) and SLM
was approved by Order of the Court in the Bankruptcy Case on or about April 11,
2002 (April 11, 2002 Order incorporating the agreement hereinafter collectively
referred to as “April 11, 2002 Order” or “Judge Lax’s Order”).6
This Court should also consider the fact that in the initial complaint on file
with this Court, the plaintiffs first falsely alleged that “SLC, LLC” purchased the
Properties from the Debtors, and that “SLC, LLC” thereafter assigned all rights to
the properties to Plaintiff, QED.7 As a point of fact and of record with the State of
California Division of Corporations, “SLC, LLC” was never formed by Stan Lee.8
Instead, it was formed by defendant, Douglas Cogan (hereinafter “Cogan”) in
December of 2006 to both highlight the fact that plaintiff, Stan Lee, had never done
so and to preempt any effort by said plaintiff to attempt to create SLC, LLC after the
fact.9
The U.S. Copyright Office records regarding The Drifter and The Accuser
copyrights clearly show that these assets were never conveyed by the Debtors to
“SLC, LLC” as plaintiffs alleged in the original complaint, and that said Properties
4
Id. at ¶ 20.
5
Id. at ¶ 21.
6
Id.
7
See Plaintiff’s Complaint [Original Complaint] at ¶ 14.
8
Copies of the State of California Division of Corporations records on SLC, LLC, a
California limited liability company have been submitted to this court for consideration on this
motion as exhibits to the Declaration of Sean P. Sheppard.
9
Id.

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were never conveyed by “SLC, LLC” to QED.10 Instead, these assets are now
alleged to have been assigned by SLM directly to QED on August 7, 2006.11 Notice
should be taken of the fact that the conveyance is dated more than four (4) years
after the date upon which such conveyance was ordered by Judge Lax to be
effectuated to SLC, LLC.12
In their FAC, the plaintiffs have now completely changed their factual
allegations and now allege that: “In or about February 2002, during the pendency of
the Bankruptcy Case, plaintiff, Stan Lee, acting on behalf of a limited liability
company that he anticipated forming, which at that time was tentatively referred to
as SLC, LLC (that is, “Stan Lee Company”), entered into an agreement, as
amended, to acquire from SLM, debtor-in-possession in the Bankruptcy Case, all
rights to certain intellectual properties and produced entertainment projects,
including properties known as The Accuser, The Drifter and Stan’s Evil Clone aka
Evil Clone (sometimes referred to as “the Properties”), which were to be developed
by a limited liability company with which Stan lee would be associated. . . . The
Agreement regarding the sale by SLM of the Properties was approved by Order of
the Court in the Bankruptcy Case on or about April 11, 2002.”13
Plaintiffs’ FAC then states as follows: “It was subsequently decided that the
company purchasing the assets would not be named SLC, LLC, as Stan Lee’s name
was already associated with Stan Lee Media, Inc., a company which was then in
bankruptcy and had been the subject of many unfavorable media articles because of
the wrongful and criminal acts committed by Peter Paul and others which resulted in
losses of many millions of dollars by numerous people and companies.

10
Copies of the U.S. Copyright Office records on the purported assignment of copyrights
from SLM to QED have been submitted to this court for consideration on this motion as exhibits
to the Declaration of Sean P. Sheppard.
11
Id.
12
Id.
13
See Plaintiffs’ FAC at ¶ 21.

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Consequently, Stan Lee did not want his name or persona to be directly associated
with the company that would be purchasing those properties from SLM, so it was
decided that a different name would be used, not a corporate name using Stan Lee’s
name or initials, such as SLC, LLC. Instead, Plaintiff QED, a wholly-owned
subsidiary of POW!, acquired the Properties from SLM. The change of the name of
the company acquiring the assets did not change any of the terms of the Agreement,
as amended. On information and belief, the creditors of SLM knew of and did not
object to the use of a different name of the company acquiring the assets.”14
Defendants have set forth ten separate and distinct affirmative defenses to
which no reply or matters in avoidance have been filed by the plaintiffs.
III. STATEMENT OF FACTS
A. General Additional Facts
In addition to those facts admitted by the plaintiffs in their FAC, the
following facts are not in dispute: On or about October 15, 1998, Stan Lee executed
a general assignment in favor of SLM’s predecessor in interest, Stan Lee
Entertainment, Inc., thereby effectively assigning to SLM all of Stan Lee’s right,
title and interest, forever, in all of his creations, his name, his likeness, and other
creative rights of any kind and from any source (hereinafter referred to as the
“October 15, 1998 Assignment”). SLM operated a business and was publicly traded
for a period of time. On or about February 16, 2001, SLM filed for bankruptcy
protection pursuant to Chapter 11 in the Central District of California.15 The SLM
bankruptcy was pending between February 16, 2001 and November 14, 2006, a
period of almost five (5) years and nine (9) months.16 During the entirety of the
bankruptcy proceedings, Stan Lee and Junko Kobayashi were the purported
“representatives” and “fiduciaries” of SLM. In fact, plaintiffs allege that Junko

14
Id. at ¶ 22.
15
Plaintiffs’ FAC at ¶ 20.
16
See Declaration of Sean P. Sheppard.

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Kobayashi was appointed by SLM’s board of directors to serve as “the authorized
representative of SLM during the Bankruptcy Case.”17
B. SLM Bankruptcy—Sale of Assets Order dated April 11, 2002
In proceeding to describe what happened during the SLM bankruptcy
proceedings, it is helpful to break up the discussion into two subsections; first, what
The Honorable Judge Kathleen T. Lax ordered to be done, and second, what the
plaintiffs took it upon themselves to do. As the court will see, these are two very
different things.
(1) What Judge Lax Ordered:
During the SLM bankruptcy, and of vital importance to the court’s decision in
this case, The Honorable Judge Kathleen T. Lax, United States Bankruptcy Court
Judge, Central District of California, San Fernando Valley Division, who was the
judge presiding over the SLM bankruptcies, Case No. SV 01-11329 KT, jointly
administered with Case No. SV 01-11331 KT, entered an order dated April 11,
2002, which authorized the sale of certain assets of SLM to a company by the name
of SLC, LLC.18 The assets authorized to be sold by the April 11, 2002 Order are the
same assets at issue in the plaintiffs’ pending FAC.
The April 11, 2002 Order was entered as a result of a motion, a supplement to
the motion and a notice of hearing, conformed copies of which have all been
provided to this Court for consideration on this pending motion for summary
judgment.19 As is clear from the motion, the supplement to the motion and the
17
Plaintiffs’ FAC at p. 10, ¶ 24, lines 15-16.
18
See generally copy of April 11, 2002 Order by The Honorable Judge Kathleen T. Lax,
United States Bankruptcy Court Judge, Central District of California, San Fernando Valley
Division, which was entitled “Order Granting Motion for Order to Approve Sale of Assets Free
and Clear of Liens” filed with this court in support of this motion as an exhibit to the Declaration
of Sean P. Sheppard.
19
See generally copies of “Notice of Motion and Motion for Order to Approve Sale of
Assets Free and Clear of Liens; Memorandum of Points and Authorities; Declaration of Kenneth
S. Williams in Support Thereof” dated November 27, 2001; “Notice of Hearing on Motion for
Order to Approve Sale of Assets Free and Clear of Liens dated November 27, 2001; “Supplement
in Support of Motion for Order to Approve Sale of Assets Free and Clear of Liens” dated January
21, 2002; all of which have been filed with this court in support of this motion as exhibits to the

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notice of hearing on the motion to approve the sale of the assets, all interested
parties, as well as Judge Lax, were considering and ultimately approved the sale of
the assets to SLC, LLC, a California limited liability company. Although the April
11, 2002 Order speaks for itself, there are several provisions worth highlighting for
purposes of this motion. Specifically, the April 11, 2002 Order (1) authorized the
agreement between Stan Lee, on behalf of “SLC, LLC”, and SLM, debtor-in-
possession to be consummated; (2) authorized the sale of certain of SLM’s assets to
an entity by the name of “SLC, LLC”, which entity was specifically represented by
Stan Lee to be a California limited liability company;20 (3) involved not only Stan
Lee, on behalf of SLC, LLC, but also involved the secured creditor by the name of
Wild Brain, Inc. and the Official Committee of Unsecured Creditors; (4) not only
limited the type of assets authorized to be sold, but also specifically designated the
entity to purchase the assets; that being SLC, LLC, a California limited liability
company;21 (5) required that the articles of organization reflect that SLC, LLC be a
special purpose entity thereby expressly restricting the business of SLC, LLC to
only the exploitation of the specific assets being sold and specifically prohibiting
SLC, LLC from conducting any other business;22 (6) prohibited SLC, LLC from
assigning, conveying, encumbering, or otherwise transferring the assets to anyone
without the express written consent of SLM;23 (7) required that any purported
assignment or transfer of the assets at issue be approved by the bankruptcy court. It
is clear from the very specific instructions contained within Judge Lax’s Order, that
the requirements of Stan Lee were not optional, and that Stan Lee did not have any
authority whatsoever to unilaterally change Judge Lax’s Order and substitute his

Declaration of Sean P. Sheppard.

20
April 11, 2002 Order, Agreement Article 3, ¶ 3.2, which has been filed with this court in
support of this motion as exhibit to the Declaration of Sean P. Sheppard.
21
Id.
22
Id. at Agreement, Article 3, ¶ 3.1.
23
Id. at Agreement, Article 7, ¶ 7.9]

-7-
own judgment based upon what he believed to be more convenient or more feasible.
It goes without saying that the purpose behind seeking approval and
authorization to sell assets during any bankruptcy is to ensure that no insider or
equity holder of the debtor-in-possession wrongfully benefits from a particular
transaction to the detriment of the creditors and the shareholders of the debtor-in-
possession. In fact, in Judge Lax’s Order she specifically references findings, which
are required in any such situation, whereby she found that (1) “the terms and
conditions of the Sale Agreement is in the best interest of the Debtors and their
estates”;24 “the terms of the sale of the Assets to Buyer [SLC, LLC] are the result of
good faith and arm’s length negotiations between the Debtors, the Official
Committee of Unsecured Creditors (the “Committee”), Wild Brain and Buyer, and
the Debtors have determined . . . that the Assets should be sold to Buyer [SLC,
LLC]. . . and that the consideration to be realized by the Debtors is fair and
reasonable”;25 and (3) that “Buyer [SLC, LLC] has acted, and is acting, in good
faith, and is therefore entitled to the provisions afforded to a good faith purchaser
under 11 U.S.C. § 363(m).”26 Furthermore, it is clear from Judge Lax’s Order and
the agreement incorporated therein were drafted with the intent of maintaining
control over the manner in which these very valuable assets were being managed.
2. What Actually Happened:
Even though Judge Lax and all of the interested parties very apparently went
through great effort to negotiate and finalize the terms and conditions of the April
11, 2002 Order, Stan Lee, by his own admission in the plaintiffs’ FAC, unilaterally
and without any authority of any kind, decided not to close on the sale of the assets
to SLC, LLC. In fact, Stan Lee never even set up SLC, LLC, even though for the
approximately six (6) months from November of 2001 through April 11, 2002 he

24
Id. at Order, p. 3, lines 5-7.
25
Id. at Order, p. 3, lines 10-19.
26
Id. at Order p. 4, lines 6-8.

-8-
allowed the bankruptcy judge, trustee, creditors and all interested parties believe that
he was doing so and/or had done so. Furthermore, on November 19, 2001 Stan Lee
went so far as to sign a document that was filed with the court in support of the
proposed sale of assets, warranting that SLC, LLC was, at the time of that filing, an
existing limited liability company pursuant to the laws of the State of California.27
In short, there was never any closing involving SLC, LLC and never any transfer or
sale of assets to SLC, LLC, as was specifically ordered by Judge Lax.
Instead, the plaintiffs now allege in their FAC that Stan Lee caused the assets
to be transferred and assigned to QED. The defendants are aware of only one
documented transfer by SLM to QED, that being the fraudulent assignment of
copyrights by Junko Kobayashi as the purported “authorized representative” of SLM
to Gill Champion, as agent of QED. The date of said fraudulent assignments was
August 7, 2006. Even assuming plaintiffs’ allegations to be true, the April 11, 2002
and agreement strictly prohibited such an assignment without the express written
consent to such a change by all parties to the agreement.28
IV. ARGUMENT

29

30

"
27
Id. at Agreement, Article 3, Section 3.2.
28
Id. at Agreement, Article 7, Sections 7.6 and 7.9.
29
Sicor Ltd. v. Cetus Corp., 51 F.3d 848, 853 (9th Cir.) # Celotex Corp. v. Catrett,
477 U.S. 317, 323-24 (1986)$ 116 S.Ct. 170 (1995)
30
Jesinger v. Nevada Federal Credit Union, 24 F.3d 1127, 1130 (9th Cir.1994)

-9-
 # $%
& #$
31

A. Plaintiffs Will Not Be Able To Prove

That They Are The Legal and Rightful Owners Of The Properties and Rights
Asserted, and Therefore Have No Standing
1. The Properties
Plaintiffs’ claimed ownership of the Properties, marks, copyrights,
publicity rights, signatures and photographs (hereinafter the “Assets”), is an
essential element of all of the causes of action asserted in Count I,32 Count II,33
Count III,34 Count IV,35 Count V,36 Count VI,37 Count VII,38 and Count VIII.39
Plaintiffs must be able to prove, as an element of each of said causes of action that
they own the Assets at issue.40 Plaintiffs’ claimed ownership of the Assets is
31
Clark v. City of Lakewood, 259 F.3d 996, 1004 (9th Cir.2001)
32
Plaintiffs’ FAC at ¶ 39.
33
Id. at ¶ 51.
34
Id. at ¶¶ 59-68.
35
Id. at ¶ 71.
36
Id. at ¶ 78.
37
Id. at ¶ 84.
38
Id. at ¶ 99.
39
Id. at ¶¶ 104(a), 104(b), 104(c), 106 and 108.
40
Count I—Copyright Infringement (
' Cavalier v. Random
House, Inc., 297 F.3d 815, 822 (9th Cir.2002) # Shaw v. Lindheim, 919 F.2d 1353, 1356
(9th Cir.1990)$ ( )! * #+he “deliberate, bad-faith, and abusive
registration of Internet domain names in violation of the rights of trademark owners.” Virtual
Works, Inc. v. Volkswagen of Am., Inc. , 238 F.3d 264, 267 (4th Cir.2001) (quoting S.Rep. No.
106-140, at 4 (1999)); Count IV—Common Law Right of Publicity (
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- 10 -
expressly based upon the April 11, 2002 Order, as plaintiffs specifically allege such
basis in their pending FAC.41 The defendants have produced the April 11, 2002
Order to this Court for consideration on this motion. There are no additional facts
that could be presented by the plaintiffs with regard to their claimed ownership
rights with regard to the April 11, 2002 Order. All of the material facts that could
possibly be placed before this Court regarding the origin of the plaintiffs’ claims of
ownership of the Assets, as based upon the April 11, 2002 Order, are currently
before this Court. Pursuant to the express language of the April 11, 2002 Order, it is
clear that plaintiffs are not the rightful owners of the Assets at issue.
It is important to note that the plaintiffs have
attempted to convince this Court (after filing an original complaint with entirely
different factual allegations) that it is somehow acceptable for Stan Lee to have
changed Judge Lax’s Order by attempting to sell and convey the Assets to another
entity because “[t]here was no operational difference between the two [SLC, LLC &
QED]; that is, what SLC, LLC was intended to be, as compared with what QED was
intended to be, other than a difference in the name of the two companies.”42 The
defendants contend that Stan Lee had no authority to modify anything in Judge

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41
Plaintiffs’ FAC at ¶¶ 20-22.
42
Id. at p. 9, ¶ 23, lines 24-26.

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Lax’s Order, and that if he wanted to modify anything in the April 11, 2002 Order
he needed to obtain court approval, as well as approval from all interested parties.
In failing to do so, Stan Lee’s actions are no different than some third party stealing
the assets from SLM during the bankruptcy proceedings—they are void.
Even putting aside for a moment the
contempt of Stan Lee in disregarding Judge Lax’s Order, the reason provided by the
plaintiffs for his decision also reveals even deeper frauds upon the bankruptcy court.
Specifically, the plaintiffs contend that the reason Stan Lee ignored Judge Lax’s
Order was because he “did not want his name or persona to be directly associated
with the company that would be purchasing those properties from SLM.” 43 Such a
statement is the complete opposite of the reasons cited by Stan Lee in obtaining
approval from the bankruptcy court for the sale in the first place.44
Therefore, throughout the negotiations and hearings before
the bankruptcy court in 2002, Stan Lee stood by while Judge Lax authorized the sale
of assets (including the Properties) of SLM to SLC, LLC, purportedly based upon
the assertion by Stan Lee that the assets could derive their full potential from the
affiliation with his name and persona. The order was executed on April 11, 2002
and the closing on the sale was to take place within ten (10) days of the date of the
order. If what the plaintiffs are alleging is true, at some point in time during those
43
Id. at p. 9, ¶ 22, lines 10-11.
44
A copy of the SLM bankruptcy filing entitled “Notice of Motion and Motion for Order
to Approve Sale of Assets Free and Clear of Liens; Memorandum of Points and Authorities;
Declaration of Kenneth S. Williams in Support Thereof” dated November 27, 2001 has been
submitted to this court for consideration on this motion as an exhibit to the Declaration of Sean P.
Sheppard. Said motion and declaration include the following pertinent statements: “Based on the
Debtors’ unsuccessful marketing efforts and the importance of Stan Lee’s personal
involvement in the productions, it was evident that the highest and best use for the estates’
assets would be through the exploitation of such assets by Stan Lee. Accordingly, the Debtors
engaged in negotiations with Stan Lee, who was represented by independent counsel, regarding
the development and exploitation of the [] Assets. The Creditors’ Committee was also involved in
such negotiations and assisted the Debtors in obtaining a result which is much more favorable for
the estate than originally proposed by Stan Lee. . . . Based upon extensive negotiations among the
Debtors, the Committee and Stan Lee, which spanned approximately two (2) months, the parties
reached an agreement, the salient terms of which the Debtors understand are acceptable to the
Committee.” (emphasis added herein).

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ten (10) days following the April 11, 2002 Order, Stan Lee completely changed his
mind about being affiliated with the assets, unilaterally made the decision to ignore
Judge Lax’s Order, and decided to convey the assets, not to SLC, LLC, but to
convey them to an entity that he had established some six (6) months earlier.
In making any determination as to the issues in this case, it is also very
important to look into the timeline of events, as they transpired in preparation for the
sale of assets: Gill Champion works with Stan Lee on commencing the work for the
formation of POW! Entertainment, Inc. (06/2001);45 Stan Lee forms POW!
Entertainment, Inc. and QED Productions, LLC in Delaware (11/2001),46 Asset
Purchase Agreement is negotiate and signed (11/19/2001);47 Motion for approval of
sale of assets is filed (11/27/2001);48 Amended Asset Purchase Agreement is
negotiated and signed (01/20/2002);49 Supplement in Support of Motion for
approval sale of assets (02/12/2002);50 Order Granting Motion for Order to Approve
Sale of Assets (04/11/2002).51
A copy of the Certificate of Formation of QED has been filed with this Court
in support of this motion.52 It is clear that QED was formed on November 8, 2001

45
Copy of the website material published by POW! on their website is attached as an
exhibit to the Declaration of Sean P. Sheppard.
46
Copies of the certificates of formation of QED and POW! are attached as exhibits to the
Declaration of Sean P. Sheppard.
47
See April 11, 2002 Order and exhibits, including copy of original agreement signed and
dated on 11/19/2001, which is an exhibit to the Declaration of Sean P. Sheppard.
48
See Notice of Motion and Motion for Order to Approve Sale of Assets Free and Clear of
Liens; Memorandum of Points and Authorities; Declaration of Kenneth S. Williams in Support
Thereof dated 11/27/2001, which is an exhibit to the Declaration of Sean P. Sheppard.
49
See Supplement in Support of Motion for Order to Approve Sale of Assets Free and
Clear of Liens dated January 20, 2002, which is an exhibit to the Declaration of Sean P.
Sheppard.
50
Id.
51
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002, which is an exhibit to the Declaration of Sean P. Sheppard.
52
Copy of the certificate of formation of QED is attached as an exhibit to the Declaration
of Sean P. Sheppard.

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with the initial member of the limited liability company being plaintiff, Stan Lee.53
This is important in that QED was formed before any agreement was ever signed,
any motion was ever filed and any order was ever entered.54
In an effort to demonstrate the metamorphosis that took place while the SLM
Bankruptcy Case was still pending, the defendants present the following for this
court’s consideration:

Name of Officer Position at SLM Position at POW! as of

November 2001

Stan Lee Chief Creative Officer & Chief Creative Officer &
Chairman Chairman

Gill Champion Chief Operating Officer President & Chief

Operating Officer

Junko Kobayashi Controller, DIP Chief Financial Officer

Representative

Plaintiff, POW!, published and continues to publish on their website the

following information:
“Gill Champion, President . . . Prior to joining the Company [POW!], he
was COO of [SLM] from July 1999 until it terminated operation in about June of
2001. [SLM] filed for bankruptcy protection in about January 2001, and has since
ceased all operations. From about June of 2001 until the formal creation of [POW!]
in November 2001 Mr. Champion worked to form [POW!] and to start the
development of various [POW!] projects.”55
“Stan Lee, Founder, Chairman and Chief Creative Officer of POW!
Entertainment. . . During 2001, Stan formed POW! (Purveyors of Wonder)
53
Id.
54
Id.; see also, Notice of Motion and Motion for Order to Approve Sale of Assets Free and
Clear of Liens; Memorandum of Points and Authorities; Declaration of Kenneth S. Williams in
Support Thereof dated 11/27/2001, which is an exhibit to the Declaration of Sean P. Sheppard.
55
Copy of the website material published by POW! on their website is attached as an
exhibit to the Declaration of Sean P. Sheppard.

- 14 -
Entertainment, with producer Gill Champion and attorney Arthur Lieberman. A
company unrelated to Marvel which has been active in creating a number of new
projects that are in various stages of development.”56
“Junko Kobayashi, CFO, . . . Prior to joining POW! Entertainment, she was
controller of Stan Lee Media, Inc. from January 2000 until it terminated operations
in June 2001 where she was in charge of preparing financial information for SEC
purposes.”57
The defendants have submitted to this Court the records of the U.S. Copyright
Office regarding the purported assignment of the copyrights for The Accuser and
The Drifter.58 Junko Kobayashi is currently the Chief Financial Officer for POW!
Ms. Kobayashi secured an executive position with the newly formed companies of
POW! and QED in 2001. In fact, she, like others, secured her position while she
was purportedly acting in the capacity as agent and fiduciary of SLM. As a result,
Ms. Kobayashi was purportedly acting as fiduciary and agent of SLM during the
Bankruptcy Case, while also acting as the Chief Financial Officer for POW!, the
new parent company of QED. It was none other than Ms. Kobayashi herself who
actually signed the Assignment of Copyrights purportedly “on behalf of” SLM (as
“Assignor”) directly to QED (as “Assignee”)59 even though Ms. Kobayashi was
fully aware of the content of Judge Lax’s order (she was on the certificate of
service), she had actual knowledge that the assets were ordered to be sold to SLC,
LLC and not to QED, and she had actual knowledge that the sale of assets was
supposed to have taken place more than four (4) years prior.60
56
Id.
57
Id.
58
Copies of the U.S. Copyright Office records on the purported assignment of copyrights
from SLM to QED have been submitted to this court for consideration on this motion as exhibits
to the Declaration of Sean P. Sheppard.
59
Id.
60
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002, which indicates in the Certificate of Service that Junko Kobayashi received a
copy of said order (among other documents and filings during the bankruptcy proceedings) at her

- 15 -
 In addition, Ms. Kobayashi was fully aware of the security interest that was to
be maintained by Wild Brain, Inc. in the very assets she was attempting to illegally,
and without authority, convey from SLM to QED, thereby ignoring and
intentionally interfering with such security interest rights of said creditor.61 Plaintiff,
Gill Champion, who is purporting now attempting to act on behalf of SLM in a
derivative action against the defendants, was the person who signed the purported
assignment on behalf of QED, as Assignee. Like Ms. Kobayashi, the plaintiff, Gill
Champion, knew everything that was going on with the Bankruptcy Case and the
April 11, 2002 Order and sale of assets agreement, as Gill Champion was the Chief
Operating Office (COO) of SLM during the Bankruptcy Case, and was also named
as President and Chief Operating Officer (COO) of POW! in 2001. On
page six (6) of the Agreement plaintiff, Stan Lee, specifically warranted and
represented to Judge Lax that “Purchaser [SLC, LLC] is a duly formed limited
liability company organized under the laws of California.”62 This statement cannot
be interpreted in the hypothetical and anticipatory context suggested by the
plaintiffs’ counsel. Instead, Stan Lee specifically represented and warranted to
Judge Lax that SLC, LLC had already been formed and was in existence as of the
date of his signing of the Agreement, January 20, 2002.63
In yet another attempt by the plaintiffs to convince this court of facts which
simply are not true, the plaintiffs attempt to state that they have fully complied with
all of the provisions, terms and conditions of Judge Lax’s Order.64 Aside from
authorizing a sale of assets to one particular entity—SLC, LLC, Judge Lax’s April
address which is indicated as “Stan Lee Media, Inc., c/o Junko Kobayashi, 5050 Klump Avenue,
#302, North Hollywood, CA 91601. Copy of said April 11, 2002 Order is an exhibit to the
Declaration of Sean P. Sheppard.
61
Id.
62
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. Copy of said April 11, 2002 Order is an exhibit to the Declaration of Sean
P. Sheppard.
63
Id.
64
Plaintiffs’ FAC at ¶ 23.

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11, 2002 Order also contemplated payments that were to be made first to the secured
creditor in Wild Brain, Inc. and thereafter to SLM.65 The plaintiffs allege in their
FAC that QED has “complied with all of the terms of the Asset Purchase
Agreement and Bankruptcy Court order of April 2002, approving the terms of
the Agreement.”66 Although we already know that there are countless factual flaws
with such a statement, yet another is that QED has paid nothing to Wild Brain, as
the secured creditor and has paid nothing to SLM, as was specifically ordered by
Judge Lax. As defendants have been denied access to the corporate records, support
for this contention could not be provided to the Court on this motion. However,
even if this Court were to find that somehow Judge Lax’s April 11, 2002 allowed
the parties to simply substitute in whatever terms and parties they felt were
convenient to them at the time, the allegation that QED has somehow “complied
with all of the terms” in place of SLC, LLC, is a completely false statement,
unsupported by any evidence of any kind whatsoever. If such factual support does
exist, the undersigned would certainly expect factual support for plaintiffs’
contentions in this regard to be presented in response to this motion.
To the extent that QED and/or POW! may attempt to rely upon the purported
assignment of copyrights executed by Junko Kobayashi dated July 31, 2006,67 such
assignments were likewise executed and recorded without any authority of the
bankruptcy court in the Bankruptcy Case.68 As the plaintiffs allege in their FAC,
Junko Kobayashi was the appointed “authorized representative” of SLM during the

65
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. Copy of said April 11, 2002 Order is an exhibit to the Declaration of Sean
P. Sheppard.
66
Plaintiffs’ FAC at ¶ 23.
67
Copies of the U.S. Copyright Office records on the purported assignment of copyrights
from SLM to QED have been submitted to this court for consideration on this motion as exhibits
to the Declaration of Sean P. Sheppard.
68
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. Copy of said April 11, 2002 Order is an exhibit to the Declaration of Sean
P. Sheppard.

- 17 -
bankruptcy proceedings.69 Being the representative for SLM during the bankruptcy
proceedings, Junko Kobayashi had full knowledge of everything that was
transpiring, including the April 11, 2002 Order and was on the certificate of service
for all papers and filings material to this motion.70
What the plaintiffs fail to point out in their initial or FAC is that, while the
bankruptcy proceedings for SLM were pending, Ms. Kobayashi took on a position
as Chief Financial Officer of POW! Entertainment, Inc., the parent company of
QED Productions, LLC.71 As a result, Junko Kobayashi had legal and fiduciary
obligations to SLM, the bankruptcy court, the bankruptcy trustee, the creditors
committee and the shareholders of SLM. As the Bankruptcy Case was pending
through the hearing on November 14, 2006, Junko Kobayashi had absolutely no
authority, and in fact, was well aware of the April 11, 2002 Order, which
specifically authorized only one form of sale and transfer of assets; that being from
SLM to SLC, LLC, a California corporation.72 Furthermore, the recipient of the
purported assignment, Plaintiff, Gill Champion, on behalf of QED, had the same
knowledge as Junko Kobayashi. It cannot be emphasized enough that all of these
acts were completed while the court, the creditors, the trustee, and the shareholders
of SLM relied on a sworn declaration that no transfer of the assets would benefit
insiders.73 Furthermore, all of the aforedescribed transactions occurred while SLM
was in bankruptcy protection.

69
Plaintiffs’ FAC at ¶ 24.
70
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. A Copy of said April 11, 2002 Order is an exhibit to the Declaration of
Sean P. Sheppard.
71
Copy of the website material published by POW! on their website is attached as an
exhibit to the Declaration of Sean P. Sheppard.
72
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. A copy of said April 11, 2002 Order is an exhibit to the Declaration of
Sean P. Sheppard.
73
See Notice of Motion and Motion for Order to Approve Sale of Assets Free and Clear of
Liens; Memorandum of Points and Authorities; Declaration of Kenneth S. Williams in Support
Thereof dated 11/27/2001, which is an exhibit to the Declaration of Sean P. Sheppard.

- 18 -
 The expressed and exclusive purpose of SLC, LLC was for Stan Lee to use
his good faith best efforts to exploit the properties and generate revenues to pay for
the assets within an 18 month period, pursuant to detailed benchmarks, all of which
were ignored and completely circumvented by the plaintiffs’ contemptuous acts.
Finally, the creditors and SLM had certain reconveyance rights that were to be made
part of the closing documents and the security agreements.74
Based upon the foregoing, the purported transfer of the intellectual properties
from a debtor-in-possession, while the Bankruptcy Case was still pending, without
any authority to do so, is an involuntary and unauthorized transfer. Involuntary
transfers of assets, particularly those which are effectuated by persons having full
knowledge of a judge’s order to the contrary, are governed by 11 U.S.C. § 362,
which specifically states that the filing of a bankruptcy petition, as in the case of
SLM, “operates as a stay, . . . , of—any act to obtain possession of property of the
estate or of property from the estate or to exercise control over property of the
estate.”75 Involuntary transfers of assets in violation of 11 U.S.C. § 362 are void ab
initio.76 Therefore, as a matter of law, the defendants contend that any purported
assignment is void from its inception and had no legal effect whatsoever. As a

74
See Order Granting Motion for Order to Approve Sale of Assets Free and Clear of Liens
dated April 11, 2002. Copy of said April 11, 2002 Order is an exhibit to the Declaration of Sean
P. Sheppard.
75
See 11 U.S.C. § 362.
76
11 U.S.C. § 362 states, in pertinent part, as follows: “
#$ section 301 302 303
9# $#/$ "
: = ,2-6
7 7. . . (3) any act to obtain possession of property of the estate or of property from the estate or
to exercise control over property of the estate; see In re Schwartz, 954 F.2d 569, 570 (9th Cir.
1992) (holding that “[o] '
#
In re Williams, 124 B.R. 311, 316-18 (Bankr.C.D.Cal.1991) In re Schwartz also states that t
> !
In re Shamblin, 890 F.2d 123, 125 (9th Cir.1989)

$
( In re Stringer, 847 F.2d 549, 551 (9th Cir.1988) #
'
$

- 19 -
result, SLM continues to own and hold all rights, interest and copyrights in and to
the intellectual properties at issue, and the plaintiffs, excepting only SLM, have
absolutely no standing to be suing the defendants.
Plaintiffs’ have also claimed, as a separate basis for ownership of the Assets
referenced in Count II77 and Count IV,78 that Stan Lee, has entered into an agreement
to allow POW! and QED to exploit the Stan Lee trademark, Stan Lee’s name and
likeness, and Stan Lee signature in connection with the exploitation of certain of the
assets at issue.79 Plaintiffs must be able to prove, as an element of each of said
causes of action that they own the Assets at issue. The October 15, 1998
Assignment was executed by Stan Lee, effectively conveying to SLM, forever, all
right, title and interest Stan Lee had then and into the future, in his name, his
likeness, trademarks, symbols, logos and designs.80 The October 15, 1998
Assignment, was acknowledged and referenced in the April 11, 2002 Order by way
of the Agreement incorporated therein, which specifically reserved unto SLM “[a]ny
property or interests in property no expressly included in Section 1.1.” 81
Furthermore, the plaintiffs expressly acknowledge that SLM has the continuing right
“to exploit the [Stan Lee] mark in properties owned and exploited by them for other
purposes.”82 Although such an allegation appears to be only a minor concession by
the plaintiffs, this concession in the pleadings releases a series of logical and
undeniable factual findings, all of which further support the defendants’ position.
Any and all of SLM’s rights to utilize the name, likeness and persona of Stan Lee,
among other things, are derived only from the October 15, 1998 Assignment and
nothing else. As plaintiffs have acknowledged SLM’s rights to continue to use Stan

77
Id. at ¶ 51.
78
Id. at ¶ 71.
79
Id. at ¶¶ 51 and 71.
80
October 15, 1998 Assignment at p. 4, ¶ 4(a).
81
Id. at Agreement to the April 11, 2002 Order, Art. I, Section 1.2 “Excluded Assets”.
82
Plaintiffs’ FAC at ¶ 51.

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Lee’s mark with regard to certain properties, they have acknowledged the
continuing validity of the October 15, 1998 Assignment, just as the April 11, 2002
Order and Agreement did. In fact, Stan Lee executed the Agreement incorporated
into the April 11, 2002 Order, which is the same Agreement acknowledging that all
things not specifically conveyed to SLC, LLC, were retained by SLM. Finally,
there has been no legal action of any kind in the past, and Stan Lee is not now
challenging in this pending FAC that the October 15, 1998 Agreement is not valid
and binding. With all of this said, the April 11, 2002 Order does not authorize, and
Stan Lee has never regained any authority of any kind whatsoever to enter into any
agreement with POW! and/or QED to authorize either of said plaintiffs to utilize
Stan Lee’s name, likeness, persona, signature, and/or trademarks. Therefore, any
purported claim of ownership based upon agreements by and between the plaintiffs
is without any merit.
Plaintiffs are unable to present any additional facts to this Court sufficient to
establish their purported ownership of the Assets. As such all causes of action
related to claims asserted by plaintiffs and which are based upon plaintiffs’
purported ownership of same are without merit. As a result, summary judgment
should be awarded in favor of defendants on all such counts.
2. Stan Lee’s Name And Likeness
Like the intellectual properties discussed above, plaintiffs’ purported rights to
use the name, likeness, mark and signature of Stan Lee are also based entirely upon
the April 11, 2002 Order and/or the purported agreement between Stan Lee and
POW!/QED. Once again, the Plaintiffs’ alleged ownership of the rights to use the
name and likeness of Stan Lee are material allegations and necessary prima facie
elements of the causes of action asserted in Count II,83 Count III,84Count IV,85 Count

83
Id. at ¶ 51.
84
Id. at ¶¶ 59-68.
85
Id. at ¶ 71.

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V,86 Count VI,87 Count VII,88 and Count VIII.89 For the same reasons set forth
above, plaintiffs are unable to present any additional facts to this Court sufficient to
establish their purported ownership of the rights to the intellectual properties and the
right to use the name and likeness of Stan Lee. As a result, summary judgment in
favor of the defendants as to the entirety of Count II, Count III, Count IV, Count V,
Count VI, Count VII, and Count VIII is proper.
B. Gill Champion Has Failed to Properly Plead Derivative
Causes of Action and Cannot Act Fairly and Adequately on Behalf of Those
Similarly Situated
“= '

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90

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92
Fed.R.Civ.P. 1/,
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86
Id. at ¶ 78.
87
Id. at ¶ 84.
88
Id. at ¶ 99.
89
Id. at ¶¶ 104(a), 104(b), 104(c), 106 and 108.
90
Fed.R.Civ.P. 23.1
91
Albers v. Guthy-Renker Corp., 92 Fed.Appx. 497 (9th Cir. 2004)(citing s In re Silicon
Graphics Inc. Securities Litigation, 183 F.3d 970, 989-990 (9th Cir.1999)
92
Andropolis v. Snyder [Slip Copy] 2006 Westlaw 2226189 (D. Colo. 2006)(citing Ross v.
Bernhard 396 U.S. 531, 534 # ,2-6$ # $.

- 22 -
 3 '
93
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93
Fed.R.Civ.P. 23.1 (emphasis added herein).

- 23 -
 94
Fed.R.Civ.P.
“23.1 % ' *
* &95 =
" ! Cohen v. Beneficial Loan Corp., 337 U.S. 541, 549-
550, 69 S.Ct. 1221, 1227, 93 L.Ed. 1528 (1949)< '

+ '
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94
Fed.R.Civ.P. 23.1; see also, 19 AM. JUR. 2d Corporations § 2044 (2007) (commenting
upon the “[e]ffect of plaintiff' s "outside entanglements"—In determining whether a plaintiff
shareholder can fairly and adequately represent other shareholders in a shareholders'derivative
action, the court should take into account any of the plaintiff's outside entanglements which make
it likely that the interests of the other shareholders will be disregarded in the management of the
action” (citing G.A. Enterprises, Inc. v. Leisure Living Communities, Inc., 517 F.2d 24 (1st Cir.
1975) (emphasis added herein), Blum v. Morgan Guaranty Trust Co. of New York, 539 F.2d 1388
(5th Cir. 1976) and Davis v. Comed, Inc., 619 F.2d 588 (6th Cir. 1980). “For example, a plaintiff
shareholder cannot fairly and adequately represent the interests of other shareholders if it appears
that the litigation is in fact controlled by an officer of another corporation, whose motive in
maintaining the action is to force a merger of the defendant corporation with such other
corporation.” (citing Nolen v. Shaw-Walker Co., 449 F.2d 506, 15 A.L.R. Fed. 946 (6th Cir. 1971).
“Observation: Although a debt investment in a corporation is not an entanglement that is
antagonistic per se to an equity investment in the same corporation, a de minimis equity
investment, when coupled with a substantial debt investment by the same party, creates an interest
adverse to the interests of other shareholders.” (citing Owen v. Modern Diversified Industries, Inc.,
643 F.2d 441 (6th Cir. 1981).
95
Davis v. Comed, Inc., 619 F.2d 588, 592 (C.A. Ohio 1980)(citation omitted).

- 24 -
 96
+ Roussel v. Tidelands Capital
Corp., 438 F.Supp. 684, 688 (N.D.Ala.1977) Rule 23.1
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97
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98

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: ! C C V. CONCLUSION
WHEREFORE, the defendants
respectfully request that this Court grant summary judgment in their favor and
against the plaintiffs on all counts.

DATED: August 31, 2008 THE ANDERSEN FIRM

SEAN P. SHEPPARD
96
Id. (emphasis added herein).
97
Id. at 593.
98
Id. (citing G. A. Enterprises, Inc. at 27 " % &
*
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First American Corporation v. Foster, 51 F.R.D. 248, 250 (N.D.Ga.1970)

- 25 -
 O’DONNELL & ASSOCIATES PC
PIERCE O’DONNELL
JACK G. CAIRL

By:
SEAN P. SHEPPARD
Attorneys for Defendants JAMES NESFIELD,
A.F. GALLOWAY and DOUGLAS C. COGAN

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing, as
well as all Exhibits referenced herein were provided by United States Mail and
email to Paul Sorrell, Esq., at Lavely & Singer, Professional Corporation, rd2049
Century Park East, Suite 2400, Los Angeles, California 90067-2906 on this 23 day
of August 2007.
__________________________________________
Sean P. Sheppard, Esq.
THE ANDERSEN FIRM
1200 Plantation Island Drive South, Suite 220
St. Augustine, Florida 32080
Telephone (904) 471-5040
Facsimile (904) 461-9312
Attorneys for Defendants pro hac vice

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