Todd declares bankruptcy

So people have been e-mailing me (yes, my e-mail is functioning properly once more) asking me if I’m “happy” about the news that Todd McFarlane has filed for bankruptcy.

The answer is, no, of course not, for two reasons. First, I take no pleasure in the misfortune of others, even if they’ve done me dirt. And second, I don’t think of this as anything other than a canny accounting dodge so that Todd can get out of the debts he owes to people that he’s done dirt to. Tony Twist, to whom he lost two court battles for naming a murderous thug after him; Neil Gaiman, to whom he made countless promises that he then broke; various artists including my past collaborator, Angel Medina, to whom he owes thousands. Depending upon how it plays out, all these people he’s screwed over may wind up getting pennies on the dollar, while Todd winds up “reorganizing” and eventually going back to business as usual without having to properly compensate these guys. Guys who (with the exception of Twist) made only one mistake: Trusting Todd McFarlane.

Granted, I’m not an accountant or a lawyer. So if someone with an accounting or law degree would care to explain that I’m wrong, I would love to hear it. I would very much like to be wrong on this and think that guys like Neil and Angel will be able to get what’s due them.

PAD

87 comments on “Todd declares bankruptcy

  1. Regarding OJ and a civil trial … it already happened. He was found liable and ordered to pay $8.5 million to the Goldman family.

  2. kingbobb said:
    “[Defamation] *can* be seen as a free speech issue, but as we all should know by now, there’s no right of free speech when it comes to clashes between individuals.”

    A clash between individuals ceases to be a private matter when the power of the government is invoked. Which is what happens when Citizen A sues Citizen B for defamation. The Court system is part of the government and acts with the authority of the government. If Citizen A is awarded a judgment in his defamation case against Citizen B, Citizen B must pay that judgment or face the power of the govnernment.

    That defamation lawsuits implicate the First Amendment is a settled matter of law. The “big” U.S. Supreme Court case in the area is New York Times v. Sullivan.

  3. Luke, I post corrected, to a degree. That’s a very interesting opinion (http://www.bc.edu/bc_org/avp/cas/comm/free_speech/nytvsullivan.html)

    I’d recommend those interested to read it, although even a quick scan made my head hurt.

    However, there’s a significant distinction: NYT v Sullivan involved a libel suit by a public official against the NYT for comments printed in an editorital ad. The distinction being that that case was a public offical bringing suit, which amounted to the government bringing a libel suit against a member of the press. The court imputed the officials action on to the government, making the libel suit an action protected by the first amendment.

    There is some discussion about civil libel suits acting to repress free speech, but my take is that the court was specifically addressing a public official using libel as a way to curtail free speech. If the First Amendment applies equally to actions between purely private parties, we’d not have an action of libel or slander, as they’d be deemed unconstitutional.

    Actually, on reading NYT closer, I don’t think it speaks at all to the civil matter of libel between purely private individuals. NYT is dealing with discussion of public matters, or public questions/debate.

    So while defamation lawsuits do implicate the First Amendment, mostly it’s along the lines of “the Constitution does not protect libelous publications.” So printing/speaking lies about someone not a public official is not protected speech under the Constitution.

  4. I first read about the bankruptcy filing here inlcuding the speculations that Todd would use it to get out of his obligations to other creators. So I emailed Neil Gaiman and here is the reply on that score:

    Hi Neil,As you are no doubt aware, a lot of people are talking about Todd McFarlane filing for Chapter 11 bankruptcy protection. Most people are assuming it is all of Todd’s finances in every form going bankrupt, but I’ve seen it pointed it out that it is actually only one of his seven companies that filed for protection. I’m wondering is this one involved in the lawsuit you won? Cal

    “My understanding is that it only marginally affects me, as the court judgment on the copyright violations was against both TMP and Todd personally, and he’s not personally bankrupt, so that’s where we would collect from. Now that Todd’s primary appeal process is over (and he lost) we’re waiting for the final accounting to figure out how much Todd owes, and for the judgment to then be made final. It may be the TMP bankruptcy will slow that up a bit, but, I’m told, probably not too much…”

    thought folks here might like to know…
    cal

  5. Sounds like Todd is using this more to get out of the Tony Twist judgment than Gaiman’s. The Gaiman ruling I fully support. Todd clearly was in breach of contract. But $15 million for naming an obscure mobster type character after a hockey player?

    Come on!

  6. $15 mil. for a hockey player seems a lot, even for a salary. Still, I’ve seen comments that St. Loius really likes him, and maybe he did miss out on some local sponsorship/ad campaign that, over 6 years or so, would have come to $15 mil.

    This could just be a pre-emptive move to get out of paying Neil. If Todd dumps all his assets into TMP, then gets those debts settled in bankruptcy, when Gaiman comes around to collect, poor Todd says he’s broke, and files for personal BR again. Meanwhile, TMP goes on chugging, and his 6 other companies continue to make him millions of dollars.

    Why can’t I create scams like that?

  7. Ralf Haring: Actually, in the near future, Silvestri will be back to drawing a book for Top Cow to be written by Mark Waid. Valentino is also writing and drawing books again since he was fired.
    Luigi Novi: Hence my use of the qualifier

  8. Luigi, I tried to pull up an image on the web of McFarlane’s Twist, and in the process found a couple of statements that indicated that his Twist indeed looked like the real Twist, although much bigger. I did find the real Twist’s home page, and do vaguely remember someone looking like him in a Spawn book, although I’ve no idea if the few issues of Spawn I own actually contained him.

    And apparantly Todd himself stated in a letter that his Twist was based on the real Twist.

    Since this was in print, it pretty much ruined Todd’s chances of getting this tossed out on the coincidence argument.

  9. Kingbob said:
    “However, there’s a significant distinction: NYT v Sullivan involved a libel suit by a public official against the NYT for comments printed in an editorital ad.”

    True, but NYT v. Sullivan was just the first case in a long line of cases that chipped further and further away at the right to sue for defamation. While Sullivan was concerned with “public officials,” later cases have expanded the doctrine to include “public figures,” a far more amorphous group that might, arguably, includes professional hockey player Tony Twist. Even then, though, defamation cases can go forward, they’re just held to a higher standard than are defamation cases regarding plaintiffs who aren’t “public figures.”

    Note, too, that I wasn’t citing NYT v. Sullivan for the proposition that McFarlane’s speech is protected by the First Amendment, merely for the proposition that defamatory speech can be protected by the First Amendment.

  10. So why was Todd’s use of this hockey player so bad, while Dave Sim parodied tons of people in Cerebus (some of them pretty nastily) and that seems to be okay? Or is it just that no one bothered to sue Sim?

  11. “So why was Todd’s use of this hockey player so bad, while Dave Sim parodied tons of people in Cerebus (some of them pretty nastily) and that seems to be okay? Or is it just that no one bothered to sue Sim?”

    Well, a couple of reasons.

    First, Dave usually changes the names.

    Second, “Cerebus” is seen by thousands of readers. “Spawn” is read by tens of thousands, and the TV show which featured “Tony Twist” was seen by millions.

    Third, you can be pretty darned nasty in parodying someone and the First Amendment will protect you. However, the FA will NOT protect you if you openly paint someone as a criminal or actively performing criminal acts. That’s libel. If Todd had portrayed Twist as a nutball hockey player, he likely wouldn’t have had a problem. Instead, he depicted Tony Twist as–you guessed it–a criminal.

    Fourth, you have to prove damages. Certainly the dead people, such as Groucho, whom Dave parodied couldn’t be damaged. Nor was anyone from Mick Jagger to Todd himself hurt in any financial way by being ribbed in Cerebus. But Tony Twist produced witnesses that said he’d lost potential endorsement deals by being depicted as a criminal. Personally, I think the amount the jury awarded was beyond ludicrous, and the amount should unquestionably be marked down. But no one asked me.

    PAD

  12. I think the amount the jury awarded was beyond ludicrous, and the amount should unquestionably be marked down. But no one asked me.

    So Peter, how much do you think the jury should have awarded Tony?

  13. “So Peter, how much do you think the jury should have awarded Tony?”

    Well, I didn’t hear all the evidence. Based on what I did hear, combining the lost income from the alleged blown endorsement, plus punitive damages…half a million, I guess.

    PAD

  14. Luigi (and others)

    I’ve done a little more research on the case, and Spawn’s Twist does not look like the real Twist. The connection was made because of Mr. Twist’s “enforcer” status in the NHL (he was apparantly regarded as the best enforcer at the time) and the Spawn Twist’s mafia enforcer status. Although I think the fact that Todd stated that his character was based on Twist, and Wizard mag ran an article showing the Spawn Twist next to a Twist Hockey trading card, with a quote from McFarlane saying how it was easier to use the names of real people than to create unique and original names.

  15. KingBobb::

    >Although I think the fact that Todd stated that his character was based on Twist, and Wizard mag ran an article showing the Spawn Twist next to a Twist Hockey trading card, with a quote from McFarlane saying how it was easier to use the names of real people than to create unique and original names.

    If this trulywas said, it shows the true depth of energy and creative juices that McFarlane utilizes when writing and certainly explains alot. *ugh*

  16. Aye, Fred, that’s what I thought. And, since I’m a lawyer, and I can’t help thinking this way, my next thought was “who else is going to wait till this bankruptcy thing passes and sue Todd for name misappropriation?”

    And do they need representation?

    Just kidding on that last bit…I’m currently “inactive,” (kinda like injured reserve, still a part of the team, but not able to play right now) since my current position doesn’t require me to hand out legal advice.

  17. I was subscribed to CBG at the time and while I don’t remember a lot of things about the debate or the ongoing controversy, I do remember the general gist of the times and why Image was so ill recieved and why its creators were seen as a bunch of hypocrits.

    Just some rememberance, ramblings about what was an interesting time.

    1. Eric Larson writes into CBG that most of the writing they see is crap, that artists are more important than writers, and that artists could write the very same drivel that writers write. His statement was that Artists didn’t need Writers.

    2. Image is formed with the hot new artists/ rock stars of the day.

    3. The comics that come out of Image are just what you would expect from hot artists. Huge pin up pages, no storyline, lots of senseless action and characters no one was given a reason to care about. Basically, Horrible writing with very good art.

    4. Inside of 6 months, many of Image’s “We don’t need Writers” are now the writers of the company and a bunch of unkown artists are penciling their books. So, the art isn’t as good, and the stories still suck.

    5. Dozens of missed deadlines and the fact that their “Creator owned company” has now turned into “The original guys who formed the company own most rights” turns Image into a new Marvel/DC only with worse writing, forgettable characters, and a sketchy release schedule pìššìņg øff retailers.

    6. Image brings in REAL writers like Alan Moore and Neil Gaiman who actually write something noteworthy and Image becomes less of a joke, but still a joke.

  18. [b]6. Image brings in REAL writers like Alan Moore and Neil Gaiman who actually write something noteworthy and Image becomes less of a joke, but still a joke.[/b]

    7. Neil Gaiman turns around and sues Todd McFarlane because he won’t give Neil Gaiman rights to characters he created for Image.

  19. All I know about bankruptcy is that it allows certain fiscal protections of corporations and companies so the employees, innocents, and generally honest folk get paid and hopefully their jobs may be preserved.

    I have no love for Todd MacFarlane, but I have nothing against the existence of any of his companies… after all: companies employ people. As long as the company isn’t chaining the employees to tables I’m certainly not opposed to its operation.

    So yeah, bankruptcy is just for the rich, because God knows that only people who get six figures and above work for a company.

    As it is, some bankruptcies erase and/or void debts and some bankruptcies manage funds and fiscal assets so everyone gets paid off, debts get paid off, and debts are kept payable.

    That’s right. An outside agency manages private capital for the purposes of honoring all parties. Some bankruptcies limit the earnings and benefits of the “Bankrupt” party so the debted get theirs.

    Which isn’t to say that Neil Gaiman, Angel Medina, Tony Twist and many others will get theirs, but since I don’t know the specifics, it may be a possibility.

  20. no no no no no

    some slight quibbles that I think matter

    Todd McFarlane, to a great deal of fanfare, said that since the writing of the Image books was being criticized, he would bring in 3 (Frank Miller, Alan Moore, Neil Gaiman), maybe 4 (I can’t remember who that would be – PAD, do you recall?) of the best writers each for one issue of Spawn. Creator’s rights were much in discussion at the time as well, and Todd promised publicly that all of the writers would share in ownership of any new characters etc that they came up with for those issues. IF I remember correctly, at least one of the writers donated his paycheck for his issue to the CBLDF.

    As a sales gimmick it worked. Spawn sales jumped substantially for those issues. Only ones I’ve ever bought.

    Neil and Todd later made a deal that Todd would gain all rights to Angela and Cogliostro and the other characters that Neil created for that issue and the Angela mini series. In exchange, Todd would relinquish to Neil any ownership/claim that he had to the Miracleman character. Todd reneged. He even went on to offer and sell Angela trade paperbacks with Neil’s name removed from the credits.

    Neil later sued because it appeared to be the only way to make Todd keep his promises.

    cal

  21. Why and how did TM come into possession of the Miracleman copyright? (Miracleman was undenyably my favorite trade paperbacks… so, of course, what box disappeared in my move cross-country? Yup. And my run of Hulk comics. I have zero luck hanging onto anything written by Peter David. I’m fairly confident that at some point my Favorites link to this website will dissappear…)

  22. TM claims it got the rights to MIRACLEMAN when it snapped up Eclipse Publishing during a bankruptcy sale. Life is funny sometimes, isn’t it.

    Too make it complicated, MIRACLEMAN was originally called MARVELMAN in the U.K. It was created when Fawcett stopped publishing new CAPTAIN MARVEL comics. The guy who “created” MARVELMAN was Mick Angelo. As far as I know, he never sold the rights to ECLIPSE. The question is did EVEN he own the rights. It is pretty murky. You can even argue that DC might have the rights as I think it owns CAPTAIN MARVEL.

    So who owns the rights? Everybody and no body.

  23. Neil and Todd later made a deal that Todd would gain all rights to Angela and Cogliostro and the other characters that Neil created

    That’s not quite the way Neil has described it; he’s repeatedly said that Angela was not included in the deal.

  24. Does anyone know if there’s something up between Todd and Dave Sim, while we’re on the subject? I remember when the Spawn collections started coming out about five years ago or so, and Dave Sim’s issue wasn’t in there. The introduction to the collection was enthusiastically going on about how his issue’s absence was proof of how the creator-owned system works, but I wasn’t really sure how being screwed out of part of the story arc was supposed to be a bonus for me.

  25. Re: trivia –

    Marvel did announce the release of a “lost” McFarlane issue of G.I. Joe, at the end of the series’ run; but this was the second McFarlane issue. Marvel did publish the actual, original G.I. Joe #60 with his pencils (inks by Andy Mushynsky; I dug up the comic) – I remember Mile High Comics used to make special note that McFarlane drew this issue. (I think the “lost” art was for issue #61; why those pencils weren’t used originally, I don’t know.)

    And, Michael Golden did draw at least one Joe story, the main feature in G.I. Joe Yearbook #2.

    “Now you know!” “And knowing is half the battle!” … 😉

  26. Just a couple of thoughts:
    Firstly, the incentive for creating Image Comics was both creative freedom and financial freedom, the latter moreso than the former. If you recall, several creators, Todd included, were very unhappy about what they felt to be the pittance they collected when at that time books they worked on sold multi-millions of copies.
    Unfortunately, Image has not continued to perform as predicted, and I suspect it’s largely due to the individual personalities involved. Too many chiefs and all with too many agendas….
    Jim Lee was very smart to do the deal with DC. Paul Levitz was brilliant in doing the deal with Jim because at the time if you will recall, Image was making a serious dent in the market’s percentage sales figures. Paul correctly determined that by winning Jim’s piece of the Image “pie”, he would not only substantially stabilize DC’s market share, but also deal what would amount to a slow but steady deathblow to the third largest forve in the industry. That slow and steady decline has been on track, until today most Image titles do not do the numbers of many independent titles. Over time since this deal was consummated we saw DDP and Dreamwave depart, and only Top Cow seems to remain as any major force with the rest of the company becing a collage of various lesser independents under the one umbrella. And just to clarify, I speak of those “lesser independents” not in terms of creativity or quality but in terms of market acceptance. Largely Image as cooked the goose of many of its creatores because of its inability to delivery product on time, a problem that has only exacerbated itself seince the time Lee sold to DC.

    Secondly, it’s usual that when you sue a corporation, you also sue the director or directors of that corporation. Assuming that both Tony and Neil had good legal counsel, I am sure that they did this. The best source of that info would be to talk directly to them. Regardless, depending on how Todd’s umbrella or inter-company relations are set up, he may or may not be deemed to be personally liable. Remember that one of the creditors listed for TMP is another Todd company which is listed as being owed almost $686,000. In fact, next to the two lawsuits, that’s the next biggest debt, so guess what might happen there…..

    Thirdly, it’s very sad to see this come to pass because like him or hate him, the whole situation is not good for the overall marketplace. The average layman sees this and thinks the whole market is going to pieces….just another nail in the coffin. Furthermore, if Todd’s endeavours are lost for any length of time it would be a shame from a creative standpoint, and especially from the standpoint of the wonderful action figures which he is responsible for. So despite how me may or may not feel, this is NOT good news for anyone.

    And that’s about as objective as I can get on the whole deal…..

  27. And I apologize for the horrendous spelling errors in the first section above. I am typing at 500 mph and my keyboard just doesn’t keep up sometimes. Sorry.

  28. More apologies. Did not see the posting from CAL above when I first wrote my stuff, and as we see from Neil’s correspondance, he did in fact sue Todd personally. So that’s that.
    Peter, the problem with the Twist settlement is that it likely was composed of two parts, a literal component encompassing possible lost income and a punitive component. The former was probably about $1 million goive or take. It’s the latter where things go screwy and juries or judges get carried away. Although if I was Tony, I’d be seeing the settlement as absolutely fair and just and I’d be as thrilled as I’m sure he was. Shades of grey, always shades of grey and perspectives to muddle the soup…..

  29. As Nat pointed out, I misremembered slightly. From the ICV2 report at the time of the first judgement (http://www.icv2.com/articles/news/1883.html):

    1.Gaiman has a copyright interest in Medieval Spawn, Cagliostro, and Angela, the three characters he created in his script for Spawn #9.

    2.A reasonable person would not have deduced from the copyright notices in the books that McFarlane was claiming copyright ownership in the characters and the scripts (meaning that the statue of limitations had not expired on the copyright claims).

    3.There was a contract in 1992 (when McFarlane promised that he would treat Gaiman “better than the big guys”).

    4.McFarlane breached the 1992 contract.

    5.There was a contract in 1997 (this was the rights swap of Gaiman’s interests in Medieval Spawn and Cagliostro for McFarlane’s interest in Miracleman, plus setting royalty percentages for all uses of Angela and allowing “one-off” projects using the characters).

    6.Image’s failure to identify Gaiman as a writer on some of the books in question caused damage.

    7.Image had no right to use Gaiman’s name and biography without his permission on its recent reprint of the Angela series in trade paperback format.

    In the archives of Neil’s Journal (http://www.neilgaiman.com/journal/2004_02_22_archive.asp) on tuesday 2/24/04 and wednesday 2/25/04 you can read lenghthy discussion from Neil on the goings on in answer to some questions he was sent.

    Nat is correct – Angela wasn’t part of the trade. But Todd’s actions eventually came to look like he tried to conceal Neil’s share of creative credit and ownership.

    My apologies for muddying the facts.
    cal

  30. Quick Q: I read in an ST article that Seth McFarlane (creator of Family Guy) had a short cameo. Is he related to Todd?

  31. Does anyone know if there’s something up between Todd and Dave Sim, while we’re on the subject? I remember when the Spawn collections started coming out about five years ago or so, and Dave Sim’s issue wasn’t in there. The introduction to the collection was enthusiastically going on about how his issue’s absence was proof of how the creator-owned system works, but I wasn’t really sure how being screwed out of part of the story arc was supposed to be a bonus for me.

    The story behind that is that Dave Sim allowed T.M. to use the Cerebus character in the one issue on a handshake deal. A one off. He used the Spawn Logo on a skateboard on the cover of Cerebus 0 under much the same premise. There was also some problems with the reprinting of the Ninja Turtles book featuring Cerebus too, so they are very much rarities.

    It’s actually a good story about artist’s selling their rights away but not too integral to the continuity.

  32. Hot dámņ. I didn’t know he’d been a poohead to PAD as well.
    Nor most of the other people mentioned. Geeeeez.
    When I first read about this whole Twist bit, tho, I remember there was a quoted article where Todd freely admitted to using Twist’s name for the character, there in plain, undeniable text…didn’t seem that big a deal to me, seemd pretty accurate thing to be pìššëd about.
    That was before the multiple millions were showing up though. I don’t particularly care anymore about that, even, because I’ve developed a pretty strong distaste for Toddles…never liked his art, either.

  33. Todd McFarlane Rocks, and if you guys dont think Spawn has a good storyline to it, and is only a well drawn comic need to take the superman/spiderman/whatever action figures out of your rectum.

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