Aug. 7 (Bloomberg) -- Billionaire financier Ronald Perelman agreed to pay $80 million to settle a lawsuit accusing him of helping divert $553.5 million in notes when he controlled comic book publisher Marvel Entertainment Group.

Perelman, 65, and other Marvel directors were accused of moving proceeds to some of his other companies before Marvel's 1996 bankruptcy. Noteholders, and eventually Marvel's litigation trustees, sued in 1997 seeking $470.8 million in damages.

``It would be irresponsible for them to reject the $80 million settlement offer,'' the trustees said June 20 in papers filed in Wilmington, Delaware, federal court. U.S. District Judge Sue Robinson scheduled a Sept. 11 hearing to consider approval of the accord.

Perelman continues ``to deny any wrongdoing,'' according to the settlement agreement.

Some shareholders and unsecured Marvel creditors are among the beneficiaries of the settlement fund, which will be worth about $50 million after payments including $25.9 million in legal fees, $2 million to pay off a loan and about $1 million in trustees' fees and administrative expenses, according to court documents.

Edward Friedman, a lawyer for the trustees, didn't immediately return a call seeking comment. Christine Taylor, a spokeswoman for Perelman and his MacAndrews & Forbes Holdings Inc., declined to comment. Perelman is also chairman of cosmetics maker Revlon Inc.

Case History

In 2004, U.S. District Judge Kent A. Jordan ruled in favor of the directors and dismissed the suit. In 2005, the U.S. Court of Appeals in Philadelphia reversed his ruling and sent the case back to federal court in Wilmington for further proceedings.

The case was set for trial Aug. 18 until mediation by U.S. Magistrate Judge Mary Pat Thynge led to a settlement, according to court records.

Marvel trustees alleged that Perelman and other directors caused the company to issue the notes in 1993 and 1994.

``None of the proceeds went to Marvel, or were used for Marvel's benefit,'' according to the appeals court ruling, which said the directors unjustly enriched themselves.

Marvel, based in New York, emerged from bankruptcy in late 1998 as a unit of Toy Biz Inc., now part of Marvel Entertainment Inc., and noteholders were never repaid, according to the appellate court.

Marvel Entertainment Inc., with $485.8 million in revenue last year, fell 17 cents to $33.08 in New York Stock Exchange composite trading. The shares have risen 23 percent this year.

The case is Cantor v. Perelman, 97CV586 (SLR), U.S. District Court, District of Delaware (Wilmington).

To contact the reporter on this story: Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.

Last Updated: August 7, 2008 16:50 EDT