Stan Lee Media, only a few months ago a shining star in the Internet firmament, filed for protection under Chapter 11 bankruptcy proceedings Feb. 16, bringing to an abrupt end the company's seemingly unstoppable expansion. SLM Chief Executive Officer Kenneth Williams is continuing to persevere and told the Journal he has high hopes that the company will be able to reorganize and attract new funding. In the meantime, the company's top executives are embroiled in an intra-company investigation, a Securities and Exchange Commission investigation and the threat of shareholder lawsuits. Most of the investigations center on the activities of former SLM consultant Peter Paul who has reportedly disappeared into South America.

To fully appreciate the high drama and inevitability of these latest events, however, it is necessary to go back to the beginning of Stan Lee's career and the circumstances that have turned him into such a powerful and problematic figure.

Of all the origin stories involving radioactive spiders, Tibetan sorcerers and cosmic showers, none is better known to true-believing Marvel fans than the story of stories, the origin of origins: the tale of how Stan (The Man) Lee came to create the Marvel universe and, for all intents and purposes, the shape of mainstream comics from 1961 on.

Sure, we know the other versions of that story too. The one where The Man was just a boy, nothing but a go-fer for "Uncle" Marty, always tagging along, trying to catch a clue from the big guys like Joe Simon or Jack Kirby. Or the one where Stan is sobbing at his desk wondering how to attract readers who were getting sick of Fin Fang Foom retreads until Jack takes pity and hands him, out of a back pocket, enough ideas to launch the entire Marvel comics line.

Everybody's got a story to tell, each one with a different hero and a different wretch. But frankly, the proof's there in the pudding. These sour-grapes stories are always told with a straight face - humorless and unsubtle. If we prefer Stan's own story, it's because we recognize in that origin the origin stories that had captivated us as readers in so many Marvel comics of the 1960s, stories that were both epic and mundane, full of both pathos and irony.

In the beginning, Lee (born Stanley Martin Lieber) was as unremarkable and unassuming as any Clark Kent or Peter Parker. Hired as a copyeditor by Martin Goodman, a distant relative, he began working for Timely Publications at the age of 17, soon writing and editing stories for the company. Like many young men, he had grand ambitions. He looked forward to the day when he would rise from the ignominy of Millie the Model and monsters with names like Xom and write the Great American Novel. In anticipation of that day, he, in effect, pulled a mask over his face before going to work as a comics writer. He took the two syllables of his first name as his nom de plume.

Wistfully recalling the days before he became Stan Lee in Origins of Marvel Comics, he wrote, "['Stanley Martin Lieber'] had a rhythm, a vitality, a lyricism all its own. I still remember one of my earliest purchases being a little rubber stamp with my name on it, which I promptly stamped on every book and paper I owned - and even some I didn't. So happy was I being SML and so certain that I would one day write the great American novel, or the great American motion picture, and so young and witless was I at the time I started writing comics, that I felt I couldn't sully so proud a name on books for little kiddies." But that second name overtook his ambitions, fixing his identity in the minds of hundreds of thousands of readers in a way he could never have imagined.

In Origins of Marvel Comics and in countless interviews, Lee has shared with us the originary moment that carried the transformation of Lieber into Lee past the point of no return: It was a difficult patch for both Lee and the comics industry. Lee was straddling the grown-up world of newspaper reporting and the juvenile world of comics-writing, but with his energies divided, neither career was paying off. Comics were still in a post-Wertham slump, which Timely's rival DC had slightly mitigated by reviving some of its Golden Age superhero characters. Goodman asked Lee to come up with some ideas for superheroes that might appeal to the kids who were reading DC's product. At the same time, according to Lee, his wife Joan urged him to focus all his attention on one full-time career. Accordingly, Lee committed himself to developing a youth-friendly superhero concept that grew into a full-blown, still-ongoing mythos. "This was not to be merely another of the hundreds of comic-strip features I had concocted in my long and lachrymose career," Lee wrote, a hint of Thor's vanity entering his rhetoric. "No, this was to be something different - something special - something to stupefy my publisher, startle my public and satisfy my wife's desire for me to 'prove myself' in my own little sphere."

Emerging from the pressures of commerce and a dissatisfied wife, this burst of hubris brings together all the elements of a tragedy, and that is just what Lee produced: the superhero comic book as tragedy. Lee's heroes were gifted with great powers to "stupefy," "startle," and "satisfy," but they were also traumatized by the experience. The Fantastic Four's Ben Grimm was rendered grotesque by his super-transformation and never stopped trying to change back. Spider-Man's super-identity was feared by the public and hunted by the police. He couldn't tell his Aunt May his secret, because it would give her a stroke. He couldn't tell the woman he loved, because Spider-Man was blamed for her brother's death. Being a superhero was not just a secret, it was a dark, alienating secret and source of much rooftop brooding. Iron Man's super-powered armor was also a prison, since its chest-plate was all that kept him alive. Thor's immortality meant he was forbidden to consummate his love for Don Blake's mortal nurse.

But, though the overall structure of the stories may have been tragic (albeit the endless tragedy of the soap opera), that structure was constantly undercut, the contrast between the fantastic and the realistic, the super and the mundane, frequently producing effects that were surreal, absurd or camp. The Marvel revisionist superhero line was, in a sense, a rediscovery of the fundamental irony that had emerged from superimposing, as it were, Superman over the famously mild-mannered and bespectacled Clark Kent. But, whereas in the Superman series, the conflict between the ordinary and the extraordinary remained a structural conceit, a contrast between the super-figure and the mundane ground, Lee's characters made the concept personal, representing the conflict within the super-figure.

The cover of the first issue of Fantastic Four was a dramatic representation of the eruption of the fantastic into the midst of the mundane. But it also illustrated a dialectic that arose from that conflict. A New York street scene, studied in its ordinariness, is ripped asunder by a giant Godzilla-like monster emerging from beneath the ground, motivating the transformation of the four protagonists, each manifesting his or her super power. The scene takes place nowhere in the contents of the comic, but it effectively configures all the dramatic elements that the new series must accommodate. The monster is a familiar one, some variation of it having appeared countless times over the previous decade in titles like Tales to Astonish, Amazing Fantasy, Journey into Mystery and Tales of Suspense. It is the face of radiation and the unknown, twin anxieties that had hung over the Nuclear Age as it merged with the Space Age.

The street scene is the everyday world of reality and respectability threatened on the one hand by the monstrous children of technology and, on the other hand, by popular culture itself, which by its very indelicacy has depicted this four-color manifestation of the repressed anxieties that lay paved beneath the streets of the sort of mundane, realistic fiction that Lee had longed to write. Emerging from the juncture of the everyday and the monstrous, the realistic and the fantastic, are the Fantastic Four themselves, literally a nuclear family transformed by radiation, yet motivated by the hero's desire for order and social stability. The Four form a kind of accommodation with the terrors of radiation: the return of the repressed with a new heroic face. Nuclear radiation and all that it represented - disruption, transformation, proliferation - was re-embodied and turned back upon itself: the (new) nuclear heroes vs. the (old) nuclear monster.

Fantastic Four proved so popular that Lee was called upon to invent one superhero title after another (utilizing, of course, the inventiveness of his talented co-creators). So associated did his name become with the entire Marvel line that, even after he retired from any direct contact with the editing or writing of the stories the company continued to "rubber-stamp" every comic book it published with the banner "Stan Lee Presents." He became a figurehead for the comics group: Stan the Man, Smilin' Stan Lee - Marvel's Colonel Sanders. Along the way, Lee legally changed his name, leaving SML to become, in his words, "nothing more than a cherished memory - a slowly fading dream on the melancholy mattress of life."

Lee's second superhero comic book, after Fantastic Four, was The Hulk. Its protagonist, Bruce Banner, was a serious, respected scientist whose life was changed by an encounter with a teen-ager. Banner is conducting a test of a "Gamma bomb" when teen-ager Rick Jones drives his hot rod onto the test site. As Banner rushes frantically to warn him of the impending explosion, Jones sprawls obliviously in his jalopy, playing some pop song on his harmonica. At the last second, Banner is able to shove Jones behind a protective barrier, but is himself caught in the wave of Gamma radiation emanating from the blast. When Banner is overcome by his superpowered alter ego, his intellect, maturity and respectability melt away, leaving a simple-minded, brutish, green monster wearing purple pants with holes in the knees. Unlike most superheroes, The Hulk cannot control his transformations. Banner changes against his will, usually in moments of high stress. The Hulk is his Mr. Hyde, an irrepressible monster of the id. The Hulk hates Banner, unaware of this connection to the scientist. Although the Hulk frequently saves the world from various threats (thus narrowly earning the status of superhero), he is powerfully destructive, with an uncontrollable temper, and is constantly hounded and attacked by the Army and even other superheroes. Jones is the Hulk's only friend and, at least initially, the only one who knows the Hulk is Banner.

This perversion of the normal superhero story is perhaps the extreme example of Lee's reworking of the genre and it's not hard to see echoes in it of Lee's own story: the unflattering portrait of Jones, exemplar of the youth culture that lured Lieber/Banner to his fate; the ground zero at which Lieber's literary aspirations and dreams of respectability are overtaken by the radiation of pop culture; the tragic transformation of Lieber/Banner himself into a pop-culture icon: Smilin' Stan Lee/The Incredible Hulk. Just as Lee felt himself trapped by the very success of his superhero stories, his protagonists experienced the supposed blessing of super powers as a curse. Hence, the air of melancholy that pervades Lee's superhero titles may be seen as a reflection of Lee's own regrets about his lost literary ambitions, that fading stain on the mattress of life.

Comic books became part of the immense private joke the Baby Boom generation enjoyed at the expense of a square society that understood nothing. A prime example of this mutual admiration society could be seen in the way Tom Wolfe's essay narratives of pop cultural mores were full of references to comic books, while Marvel returned the favor by taking Wolfe's "Radical Chic" and substituting the Hulk for the Black Panthers as the guest of honor at a liberal fund-raising cocktail party.

But, if Lee had been unable to make the leap to "serious" literature, he had succeeded in bridging the cultural gap in another way. By introducing such "serious" elements as tragic fatalism, psychological realism, language as an aesthetic pleasure, irony and an epic scope that eventually linked all his titles in a single ongoing mythos, Lee did all that he could to inject literature into comics. That Lee himself sensed this was a doomed enterprise is evident in the way that his comics' efforts at high drama repeatedly veer into cynical, self-mocking gestures. And - irony of ironies - it was the self-consciousness about its own impossible juxtapositioning of high and low art that established Lee's work at the center of a burgeoning camp culture.

Lee became a regular speaker on college campuses, his cornball grandiloquence merely enhancing his newfound hipster persona. As he became more and more Marvel's spokesperson, appearing in media consumed by people who might never pick up a comic book and eventually becoming the company's liaison to Hollywood, he soon drifted away from writing altogether. He groomed Roy (The Boy) Thomas as The Man's heir apparent, and his title changed from writer to editor to publisher to chairman emeritus. Still the phrase "Stan Lee Presents" hung over the splash panel of every Marvel comic even though Lee, in his Hollywood Hills home, was generally thousands of miles from the creators who actually wrote and drew it.

Seeing Lee basking in publicity while they were virtually ignored stirred up resentment among Lee's former artist collaborators. Steve Ditko objected to constant references in the media to Lee as Spider-Man's creator. People magazine had even identified Lee as "popular Spider-Man artist." Jack Kirby went so far as to claim he had written and drawn virtually everything he had done at Marvel with minimal contributions from Lee. In explaining the Marvel method by which the story is told in images before dialogue is added, Lee had never hesitated to tell the press that stories were often invented and developed by the artists, but his role as Marvel figurehead made him synonymous in the eyes of the mainstream media with the stories the company published. To some fans, he seemed to be hogging far more than his share of the credit. Lee took more shots in the comics press when he sided with Marvel in its initial refusal to return Kirby's original art. By this time, the myth of the happy bullpen family had been shattered beyond repair.

For many, however, especially among Marvel's loyalists, Lee continued to represent the company's glory days. As Marvel faltered financially and creatively in the mid '90s, the company periodically released vague announcements of a top secret Stan project (Stanhattan) to reconstitute the Marvel bullpen and revitalize the industry. But year after year went by and nothing came of the hints and promises other than a new series of Stan's Soapbox editorials.

Finally, in 1998, Lee took the big step and launched himself as a separate entity - a non-Marvel Stan Lee with a new line of creations. With the formation of Stan Lee Media, a new Web-based bullpen, Lee himself both displaced and stood in for the characters he had co-created in the course of his long career. Though Lee maintained his ties to Marvel, his renegotiated contract allowed him to branch off on his own. For such a loyal company man it was a major move, one he had apparently been persuaded to make by a fast-talking dealmaker he had met in Hollywood: Peter Paul. Paul's entrepreneurial vision was of a reborn Stan disentangled from the bad blood, dissipating allure and financial encumbrances of a declining Marvel, a Stan who could be offered up piecemeal to fans and eager licensing partners from the virtual balcony of a new House of Old Ideas built on the fluid foundation of the Internet.

Lee had met Paul through the American Spirit Foundation, a patriotic nonprofit organization of intangible aspirations co-founded by Paul and movie legend James Stewart. Though Lee apparently didn't know it at the time, Paul had a colorful history - equal parts glamour and scandal. According to TheStandard.com, an Internet financial news site, Paul had been suspended from practice almost as soon as he had graduated from law school after being convicted of trading drugs for a Goya painting in 1978. In both its website and its printed version, The Industry Standard also reported that Paul had later served three years in prison in the 1980s as a result of a failed scam that was to have used a phony coffee company and a sabotaged freighter to bilk the Cuban government out of nearly $9 million.

(Paul has denied trading drugs and claims his only conviction was the result of his participation in a U.S.-sponsored plot against Fidel Castro.)

By the time Lee met him in the early 1990s, the ex-con had so rehabilitated his image that he was hanging out with Ronald Reagan and George Bush Sr. In his roles as con artist, patriotic conspirator, foundation shill and Hollywood agent, Paul had made a comfortable living by creating the right kind of front, stressing surface over content. He had proven his skill at this by making the indiscernibly talented Fabio into a star.

While his early career is the stuff of legend, there are two principal difficulties in following Stan's story into Stan Lee Media. First, Lee has never forgiven the Journal for its criticism of his handling of the original Kirby art issue and has steadfastly refused to be interviewed by the magazine. When a Journal editor registered online to receive press releases from SLM and e-mailed Lee to ask about news of Lee's new creations, the unsigned reply from SLM assured the Journal it could expect to receive the requested information "when Hell freezes over."

Second, SLM was apparently so paranoid about negative press that employees and even visitors were reportedly required to sign nondisclosure statements before being allowed in the door. It was not easy, therefore, to find SLM employees who were willing to respond to the Journal's questions, and those who did respond often preferred to talk off the record.

Stan Lee Media General Counsel Rick Madden's phone has been off the hook since early March, and as for Paul, at last report he was setting up business in Sao Paolo.

"The Torrent Without - The Tumult Within"

Multimedia writer Mark Evanier was given an opportunity to enter SLM on the ground floor back when it occupied only the top floor of a building on Ventura Boulevard in Encino, Calif., at the beginning of 1999. Lee and Paul invited Evanier to lunch and offered him a vice president position in charge of creative production. "Stan did most of the talking," Evanier said, "but Peter was the one with the overall concept. I don't think Stan was even certain how big the thing would get. I think I was the first creative person he had talked to about the project."

Evanier ended up declining the offer but put Lee in touch with other people who became part of SLM's creative team. Asked if SLM seemed strapped for cash at this early stage of its formation, Evanier told the Journal, "That was not what they said. They made me a very generous offer dollar-wise. It just didn't feel right to me. For one thing, I didn't want to be locked into something for such a long time."

One of the people recommended by Evanier was animator Buzz Dixon. Dixon was hired to develop an online game for SLM in February of 1999 but was made vice president of creative affairs. It was his job to help Lee to develop concepts and animation for SLM's 7th Portal and Accuser properties and to bring in other artists and writers. Asked if he filled the role of a creative headhunter, Dixon said, "More like a 'hand-hunter.'"

Dixon had grown up reading Lee's comics and had worked with him on Marvel animation productions in the late '70s and early '80s. He remembered the awe he had felt when Lee would nod to him in recognition in the hallway. It had felt as though he had achieved the height of his teen-age ambitions.

When Dixon joined SLM it was literally still taking shape. It had opened for business in a suite of offices at the top of a building that was dedicated to the operations of one of Paul's seemingly countless businesses, but already it was outgrowing its space and expanding into an adjoining suite and another floor. "There was drywall dust everywhere," Dixon said. "I was spitting drywall dust out of my teeth for the first few months. While I was there I would say the facilities expanded by 75 percent. But eventually it became a fairly nice facility. By Internet standards, it was clean and brightly lit."

For all the rumors that have insisted that Lee has always coasted on the abilities of Marvel artists, Dixon said Lee was actively involved in SLM's creative projects. "It was a rare day that we didn't spend a a half-hour or an hour going over something," he told the Journal. "We started with six or seven developments that he had come up with and he would have two pages to six pages on each character. A rough rule of thumb is that if it looks like a Stan idea, it was a Stan idea. Everything I saw had Stan's creative imprint on it."

Indeed the new creations appearing on stanlee.net appear to be Stan ideas insofar as they revive the elements of tragedy and self-loathing that ran through his Marvel oeuvres. The basic concept of the new line is a website that becomes a portal through which evil characters threaten to invade our world. In an August 15, 1999 interview with The New York Times, Lee speculated playfully about the possibility that his fiction was reality and his own imagination was a kind of Pandora's box unwittingly bringing evil other-dimensional forces to life. The image of modern technology as the bringer of an electronic holocaust also figures in the backstory of The Drifter, a "series" about a loner from the future who could be trying to save the world or could be "pursuing a deadly delusion that could destroy us all." His corporate nemesis, Paralogic Inc., sounds curiously like Paul's consulting company Paraversal Inc. The Accuser is a classic Marvelesque concept updated to reflect darker modern comics sensibilities. The hero is a disabled lawyer (like Matt Murdock), a professional who atones for past sins by fighting evil (like Dr. Strange) via a wheelchair that transforms into a battlesuit (like Iron Man).

Marvel creators have described Lee's practice of performing story ideas - crouching on desks and leaping about - when conferring with artists, and Dixon confirmed that, even at 77, Lee's working methods have lost none of their energy or animation. "He would act out scenes such as the way he wanted Mongorr to stand and he had to get up and walk when he was reading a scene to us," Dixon said. "He produced vivid images for us."

Which is not to say that ideas didn't evolve and change over time. Names, for example, were a sticking point. After 40 years of superheroes, the company found itself scraping the bottom of the barrel of unused trademarks for names like Conjure Man, Krog and The Streak.

In fact, everything at SLM was constantly changing, with writers, artists and projects coming and going from week to week. Dixon described the atmosphere as "very fluid. There was a constant flow, a flux of people. New alliances were being made and old alliances were being broken."

Creative concepts would often shift to accommodate changing business connections. Whenever SLM would sign a licensing deal for a syndicated TV show or an amusement park ride, Dixon said, "other people from that group would come in and have input onto the projects. They would ask things like, 'Does the Accuser have to be in a wheelchair?'" As licensing deals broke down and new ones were launched, new groups with new questions would come on board.

Paul was as regular a presence in the offices as Lee, according to Dixon. "I interacted with Peter on a daily basis, and we would have regular staff meetings," he said. "Here's an ugly picture for you: Peter once put on a Spider-Man suit and this middle-aged man went prancing up and down the hall."

Dixon said veteran artist Russ Heath was a major creative force on the team of writers and artists but added that creators were fairly far down in the corporate hierarchy. "If you think of it in levels," he said, "Peter was the first level, Stan was on the second level, I was on level three and the artists were on five or six."

Stan was on the second level of Stan Lee Media?

"Yes. I think there were wheels within wheels that Stan may not have been aware of."

Though Paul was perceived as being in charge of SLM, he had no actual title in the company. Lee was paid an annual salary of $272,500, but Paul was paid only his independent consultant's fee. Paul's unofficial capacity would prove significant later with respect to the flurry of trading activity that presaged the company's shutdown.

Some things were puzzling to many who worked there. It was not like working on an animated film or TV show. Nor was it the same as creating comics. "We asked ourselves how in the world they were going to pull this off," Dixon said. "Nobody was likely to license something until they could see it. I had discussions with them about 'Exactly what is it we're selling?'"

The answer was: Lee himself. As SLM CEO Kenneth Williams told Wall Street Reporter Magazine in an Aug. 4, 2000 radio interview, the valuable properties that Lee took with him when he stepped outside the Marvel umbrella were "his likeness and the elements associated with the Stan Lee Brand." Lee and his new bullpen were feverishly cranking out characters and story ideas, but what they came up with was beside the point. What mattered was that every concept that emerged from the company would be stamped with the SLM brand - a slight alteration from Stanley Martin Lieber's beloved rubber stamp.

Here is how Williams, who came aboard in June 2000, explained to Wall Street Reporter what SLM was all about: "We are a company that is enabled by the Internet as a distribution medium, taking advantage of the fact that Stan is, in fact, a brand which allows us to gain visibility for our projects in the eyes of the public.... The key here is to create globally branded animation franchise properties - to amass a library, a catalog, that will allow us to increasingly leverage ourselves across traditional and non-traditional media markets. The access to the consumer is facilitated by the fact that Stan is a recognized brand in the global marketplace."

To ensure access to all the culturally diverse consumers in the global marketplace, SLM planned to license local Internet servers in foreign countries to host their own version of the stanlee.net website, with each country or geographical region getting its own exclusive Stan Lee characters. A local server in India, for example, was to feature a character called Enigma who would be unique to that country. Deals were in place for Germany, Japan, Latin America, India and South America. Italy was still in negotiation, a deal with Egypt broke down at the last minute, and a planned website for subSaharan African kept shifting from country to country as financing came and went. Unfortunately, SLM proved to be not very adept, according to Dixon, at meeting the needs of its foreign partners.

"In the ideal vision of this," Dixon told the Journal, "there would be a big 7th Portal website with links to Japanese, German, etc. sites. But they weren't willing to listen to the people they were selling the superheroes to. I had done research on 'Bali-wood' [India's uniquely themed and thriving movie industry] and wanted to use the traditions and conventions of those stories. If you're going to try to sell characters to other foreign markets, you have to pay attention to what they want." SLM was unpersuaded by Dixon's arguments, however. Typical of the company's attitude, he said, was SLM's insistence on calling the city where its Indian stories were situated by its colonial name of Bombay, instead of by its current Indian name of Mombay.

Dixon had other disagreements with SLM. A veteran animator, he was painfully aware of the Internet's limitations as a medium for quality animation. Dixon wanted to embrace those limitations as a virtue in the manner of Alex Toth's old Space Angel cartoons. "I was advocating art that looks good when it's static so you don't have to move it a lot," he said. "The idea was to make it as much of an entertaining experience as possible with a minimum download time." Instead, he felt the site suffered from both limited animation and lengthy load times.

More than one staff person expressed to the Journal the opinion that SLM was heading in too many directions at once, trying to make itself into a product for every conceivable market. One of Paul's many ideas was to develop a line of Stan Lee clothing, a mind-boggling concept that actually reached advanced stages of development. "This was not clothing based on The 7th Portal but on Stan himself," Dixon said. "It was generic Wal-Mart clothing with some Stan Lee phrases slapped on it. Let's face it, Stan's taste in clothing would not be what teen-age boys would want to wear." Such deals proved surprisingly easy to put together because they typically were all about brand recognition and had little to do with content. "In the clothing industry, they have these designs that are virtually interchangeable," Dixon said. "It's just a different label that gets slapped on." In a similar manner, licensed amusement park rides called Stan Lee's 3D Simulation Experience simply involved a change of theme for already existing rides.

That was SLM in a nutshell. It was a hype machine with an Amazing Simulation in place of a concrete product. "It was always more appearance than substance," Dixon said. "There's a tendency in the entertainment world to put on a front and that's what they did. It was nothing blatantly duplicitous, but they tried to seem as big and important as possible."

Paul had a genius for seeming big and important, and during SLM's year of apparent growth, Lee seemed to be everywhere, sponsoring the Hollywood Christmas Parade or throwing a party for the Clintons one minute and exchanging a soul-brotherly handshake with Wu Tang Clan leader RZA the next. By the time the company launched itself onto the NASDAQ board by acquiring Boulder Capital Opportunities, a minor holding company (a company that acts as an investment shell without producing anything itself) already established on the board, SLM seemed to be radiating success.

According to Dixon, however, much of that was an illusion. "They never had plenty of money," he said. "They were always scrambling for cash. And they were foolishly spending money and then not spending it on the right things." According to Animation World Magazine (February 2001) SLM burned through more than $20 million in its first year of life.

According to some employees, SLM was top-heavy, swarming with executives who ate up cash flow faster than the creative staff could generate anything resembling a product. Even executives from the old Boulder Capital Opportunities corporate shell continued to wander the halls like ghosts, shuffling papers and collecting salaries.

Asked how open about its financial affairs the company was to its employees, Dixon said, "They kept us periodically informed. At least we were told what they said they were doing. Based on what I heard later, it didn't seem that that was what they were doing. I couldn't say I ever got an accurate report."

One source, who asked to remain anonymous, told the Journal SLM constantly and openly shifted money from account to account. The purpose of the shifting was unknown but was said to be above-board and part of the company's daily routine.

Dixon declined to say if he had observed any business practices on Paul's part that would warrant the SEC's investigation. "I couldn't say I observed anything like that, but if it were proven in a court of law that there was chicanery, I would not be surprised," he said.

By the time SLM was making a splash on Wall Street, Dixon had left the company, departing in August 1999, before its initial public offering. Asked if he had observed any change in morale during his eight-month tenure, Dixon said, "There were always mood swings, but I'd say the peaks and valleys were getting higher and lower and the initial excitement and anticipation was turning into anxieties over what might go wrong."

Dixon's position was terminated after a print project he had been working on failed to work out. He described his parting with SLM as "amicable." Asked if he had been disappointed to be dropped from the team just as it was about to go public, Dixon said, "I'll say yes, in the broad sense. At that given moment, if he had said, 'I want you to go over to this project,' I would have stayed and been a good soldier. I'm disappointed that we didn't hit a home run when I was there. I'm disappointed that the whole thing had such a potential and didn't reach it."

"The Power! The Passion! The Pride!"

To Marvel artist Scott Koblish SLM and the Internet seemed to be the future incarnate, or as close to incarnate as the Internet can be. He had reached the end of his rope at Marvel, relegated to inking instead of penciling, constantly being shunted from one late title to another to do overnight emergency finishes. Then in late 1999, he heard from Dana Moreshead, a former Marvel co-worker who had become SLM's head of licensing. After being interviewed Dec. 1, Koblish was called just before Christmas by SLM Chief Operations Officer Gil Champion and offered work on 7th Portal. Koblish didn't have to think the offer over for long. Walking to a New York subway in a terrible freezing rain in December to deliver yet another book that was too late for the regular inker to finish, SLM shimmered before him with all the promise of California, a new art form, a new year and a new life.

"I left on the first day of the new year 2000," he told the Journal. "I dropped whatever I couldn't stuff into a green Cadillac on the curb on Thompson Street and drove out to California. Most of Marvel's staff was still on vacation when I left, so I never even got to say goodbye."

Koblish came on board the second week in January and was immediately plunged into another last-minute deadline crunch. 7th Portal was due to be launched the following month and they had just thrown out six months of work on the first "webisode." Each webisode would normally take about two months, with more than 20 people working on script, art, scanning, color, digitizing and sound. Most of the voices were done in Montreal, but Lee himself was the voice of Izayus, a character surrounded by corruption and betrayed by the conflicted Mongorr. Koblish enjoyed the chance to pencil again and by the sixth webisode had risen to the post of lead artist.

"It was very energetic," he said, "very lively, and had all of the energy of an Internet startup. There was an explosion of growth when I got there. That was their main problem through the spring - they didn't have enough space to put people. But it also started out with a haves and have-nots kind of atmosphere early on, which just got worse as time passed. There was a whole level of staff that wasn't invited to the first four hours of the launch party in February. We got there just as Milton Berle, Dick Clark and Jerry Lee Lewis were leaving. Stan was the only one who was immune to that 'star-bellied sneeches' garbage; he always had time for everyone."

Koblish agreed with Dixon that Lee was heavily involved in editing and writing for the website, even while he was giving something like a hundred interviews for the press and other media and writing comics for his heavily promoted DC project. "I'd be exhausted doing half of what he does and I'm two-fifths his age," Koblish said. "I felt like I was there to stretch the limits of what I knew about art. I imagine he was doing some of the same. I think the overlap for him creatively was his stories. Every medium needs stories. Movies, TV, books, comics, the Internet, everything is just a vehicle, a tool with which to tell a story. As far as the relentless promotion of the company, I can't think of anyone who could have done more, or done it more effectively."

As much as Lee seemed to be a creative force at the company, however, there was a sense among the staff members who spoke to the Journal that he was not in control, that he was as much a faithful employee of Stan Lee Media as he had been of Marvel. "Stan once had a big lunch with all the artists and we all steered it toward our ideas for making money," Koblish said. "CD-Roms, publishing - we had a fistful of ideas, and Stan was jazzed about all of them, but he warned us before he left the lunch that as soon as he'd show these ideas to the execs they'd get shot down."

"The Stronger I Am, The Sooner I Die"

At the point of its website launch in February 2000 SLM was reportedly capitalized to the tune of $300 million. In one fell swoop, Lee had single-handedly attracted more investment capital than could be claimed by all of Marvel Enterprises (in the neighborhood of $200 million). The company quickly intertwined itself with dozens of licensing partners.

In May 2000, agreements were reached with Paramount Parks and Iwerks for the distribution of Stan Lee theme park rides. In June the company signed a co-development with Mark Canton (Men in Black) for a live-action 7th Portal feature film and partnered with Fox Kids Latin America to develop programming, license merchandise and publish in Latin America. The Latin American television and Internet launch came in November 2000. In August 2000, SLM found an investor and licensee for Japanese and Korean merchandise, programming and publishing in Venture Soft. A major project in 2000 was a symbiotic tangle of cross-promotions centered on the Backstreet Boys and involving in various ways SLM, Burger King, Venture Soft, Doubleclick and Fox Kids. Superhero make-overs were also in the works for Mary J. Blige and Wu Tang Clan's RZA. In October 2000, SLM signed a deal with scifi.com for online distribution and reached something called a "television opportunity" (featuring The Drifter) with USA Networks. Plans were under way for yet another posthumous project from Star Trek creator Gene Roddenberry's bottom drawer. It was to be called Stan Lee Presents Gene Roddenberry's Starship. In addition to the above deals, SLM's many strategic partners have included IBM, iPipe.com, Pentamedia Graphics, Toon Boom, HomePage.com and WhatsHotNow.com. SLM was going full-speed ahead, therefore, when Evanier got another call from Lee in May 2000. This time, Lee wanted Evanier to do a short-term stint overseeing writers on 7th Portal and The Accuser in an environment that seemed to be nothing but short-term stints. Evanier's ran through May and June. "I had another lunch with Stan," Evanier told the Journal. "They had just gone through their 143rd story editor. I was coming in to do Chapter 15 of a serial, to pick up the threads of somebody else's work." Asked why there was so much turn-over in the creative staff, Evanier said, "They just weren't happy with what they were getting."

If Dixon had found SLM's environment to be hectic, Evanier found it no more stable. Physical renovations and expansions were continuing and projects were in a constant state of flux and indeterminacy. "They kept breaking down walls," Evanier said. "I expected to see Stan breaking through one at any moment. The company got huge very suddenly. Blink and there were 130 employees there. If you polled personnel, I think they would all agree the company was trying to do too many things at once. It got to where every time I walked in the door I would ask, "What business are we in today?' On Monday, The Accuser was the most important thing on the agenda. On Tuesday, it was the least. I walked in one day, expecting to work on The Accuser and they said, 'No, no. Hillary is coming to visit today.' And we had to drop everything."

Evanier's short tenure as vice president of creative content was only six months from the company's shut-down, but as far as he could see, there was no hint that all that motion would come to an end. "It was a very friendly atmosphere," he said. "People were nervous about upheavals in the company, but I don't think anybody said, 'Oh my god, the company will be gone by Christmas.' I don't think they thought it was possible."

Asked if Lee seemed to be out of his element, caught up in something he didn't understand, Evanier said, "Everybody in the Internet was caught up in something they didn't understand. It was all inventing and correcting as you go along, not certain what you're building towards."

Whatever SLM was building toward, it didn't make it. During the same year that it spent $20 million, the company took in approximately $1 million in revenues. In its SEC filings, the company had warned that this sort of shortfall was to be expected during its first years of operation, and at first, SLM's financing seemed secure. As the company reached the limits of its initial financing in November 2000, it obtained bridge financing that would have ensured its continued operation. The only catch to this financing was that it would be discontinued if the company's stock price fell below a dollar - a stipulation that was felt to hold little threat, since it would only be realized if the company's stock plummeted by nearly 90 percent. A couple of weeks later, Lee and his staff watched in horror as the SLM stock (known as SLEE on the NASDAQ board) did just that.

On Nov. 27, shareholders began deserting in droves, lowering the stock price by 49 percent. It fell another 29 percent Nov. 28. The following week, 171,500 shares controlled by Paul were sold - an insider bailout that did nothing to restore investor confidence in the floundering company. Paul told Dow Jones Newswire that he was forced to sell the stock as part of the terms of a loan for which the stock shares were security.

The drop pulled the rug out from under not only the company's financing, but some of its projects, which were also contingent upon SLM maintaining a certain level of stock value. Among those projects was SLM's acquisition of Conan, a property that was in development as a feature film.

"People on the coloring staff were freaking out," said Koblish. "You could hear them calling out the tumbling stock price in the bullpen area. And as loud as the panic was downstairs, there was a tremendous silence coming from upstairs."

During that nerve-wracking week, SLM employees were given an unsettling shock in the form of individual letters from Administaff - the company through which SLM outsourced its human resources, payroll and healthcare operations - telling them that they were all fired. The company hastily explained that it had been a computer snafu, but many knew it had been a foretaste of the near future and from that point on felt themselves in limbo. Temporary bridge financing of a couple of million dollars was secured, at the start of December, but everyone knew it was a stopgap measure that would barely keep the company operating another month at its current burn rate. In early December, Lee's has-been movie-star pal George Hamilton, along with Hamilton's ex-wife and an assitant were handed their walking papers.

"On the 12th of December," said Koblish, "I opened the door for the guy who delivers the soda, but instead of delivering soda this time, he handed me a bill. He said he hadn't been paid since September. There were a lot of bills outstanding for a lot of small things like that, apparently."

On Dec. 15, Williams announced that, without further bridge financing, the company was forced to suspend operations and lay off almost all of its 140 employees. NASDAQ halted trading in the stock Dec. 18. "We still believe in the fundamentals of our business plan and are proud of the work we have accomplished to date," Williams said. "In the coming weeks, we will be focusing on exploring the full range of strategic alternatives available to us in order to maximize shareholder value."

"If I Fail, A World Is Lost"

Koblish recalls the last day: "About 20 of us went out to lunch together, which we rarely did, just joking about it being a Last Supper. There was a lot of gallows humor that had been going around for a month or more, and on the 15th it was kind of paired with a slight hysteria. After lunch, the three guys who had toys around their desks, Frank Darmata, Ruben Martinez and Dusty Abell, started packing up their figurines so they wouldn't be trapped in the building in case SLM closed down over the weekend. Then the people with computers got an e-mail at 2 p.m. for everyone in the company to meet at 4 p.m. in room 145, the Big Bullpen room, and we pretty much figured that was it. The computer guys burned copies of their Napster songs and the Flash files of what we did on the shows so we could keep something for our portfolios. They were shut out of the system at 4 p.m."

Things became more surreal as a seven-foot-tall Spider-Man statue from Germany was delivered to the offices. Everyone had chipped in to buy the statue for Stan's upcoming birthday, but assembly was required. "So there we were," said Koblish, "waiting for the ax to fall at 4 p.m., and trying to figure out how to put the damn thing together."

The statue was eventually pieced together and presented to Lee. "We'd all signed a card for his birthday on the day of the layoffs," Koblish told the Journal.

Lee was reportedly so surprised by the turn of events that he virtually collapsed the day the company shut down. Koblish said, "In my mind nowadays I think of that old James Brown trick in 'Please, Please, Please,' where they gather him up because he can't go on, y'know? That's the way I like to think about it, anyway. They gathered Stan up and led him out, and then they gathered the rest of us up in the big room, room 145, and told us that that was it. The room was dead silent when Ken Williams was telling us this. In the middle of this terribly somber speech that he was extolling, someone's computer, unprompted, blurted out that phrase from The Day the Earth Stood Still: 'Klaatu Baratta Nikto!' I think we all tried to laugh, but Ken looked like he didn't understand, and that he felt that we were mocking him somehow. It was a tense 10-minute speech. Then I cleaned out my desk with everybody else, and I left."

"If This Be Treason"

Stock analysts were at a loss to explain the precipitous drop in SLM stock, especially since it came so soon after the announcement of SLM's bridge financing. The SEC, apparently concluding that things did not add up, initiated an investigation into the trading activities of the company's final days. Williams acknowledged the SEC's investigation Jan. 2 and announced that the company was terminating its agreement with Paraversal Inc., the consulting company through which SLM retained the services of Paul.

Also terminated was the employment of SLM Executive Vice President Stephen Gordon, a longtime associate of Paul's. Before being fired Jan. 1, Gordon's brother, Jonathan Gordon, was a broker at Merrill Lynch, which represented several companies controlled by Paul. According to TheStandard.com, SLM is investigating the links between the Gordons, Merrill Lynch and Paul's holding companies. "The company has discovered evidence of possible misuse of company funds by some former members of the company's management team," Williams said.

Paraversal's contract with SLM, according to SEC filings, can only be terminated for cause, death or disability. Williams told Dow Jones Newswire that Paul was fired for cause. TheStandard.com reported that "Sources close to the company say executives intend to ask the district attorney's office to charge Paul with fraud and embezzlement." Lawsuits by SLM shareholders are reportedly pending. A report in Animation World Magazine based on SEC filings, stated that stock sales by PFP Family Holdings, the company through which Paul controlled SLM stock, would've yielded "estimated proceeds of over $635,000" and would've accounted for nearly eight percent of the stock's trading volume in its last 20 days.

Before the final flurry of sales, SLM was 28 percent owned by Stan Lee and 27 percent by Paul. But according to TheStandard.com, SLM has found that Paul had ties to many of the companies that had been benefiting from short-term margin trading on the company's stock. SEC rules require executive officers to report such ties, but because Paul held no official title at SLM, he was not bound by that rule.

(Paul told the Journal he knows of no complaint filed against him by SLM and has not been asked any questions by the SEC. He denied that any action on his part led to SLM's collapse.)

"Fight On, For a World Is Watching"

Today there are not many left in the SLM bunker, but Williams is there and he is still looking for ways to rebuild. "There is a fair amount of interest in reviving the company," he told the Journal, "and a lot of good ideas on how to do it."

Williams declined to get specific about those good ideas or about what went wrong with the company's game plan, saying "while there are outstanding shareholder suits, I'm not willing to speculate on mistakes in the past."

The company's stock has dropped off the NASDAQ board, meaning it can only be traded on lesser low-volume boards - what is known in stock market lingo as "going to pink sheets." According to NASDAQ rules such a suspension in NASDAQ trading can only last for up to 45 days before it becomes permanent. Williams told the Journal he is currently filing an appeal with NASDAQ to be granted more time.

Asked how long it might take for the company to reorganize and regain funding under Chapter 11, Williams said, "We haven't had our first meeting of stockholders on this yet, so it's premature for me to talk about a timetable. Chapter 11 reorganization can take anywhere from two months to two years. I certainly don't expect it to take two years. I hope we will have some progress in the next 30 to 60 days."

Asked how he sees SLM's chances of recovery, Dixon cited the Gospels in reference to Lazarus' risen corpse: "'Lord, he is not just dead; he stinketh.' The characters have not made any kind of impression. Maybe I'm an idiot for thinking this, but nothing SLM has done would make a person want to invest in it. The amount of money it would take to take care of SLM's debts is far greater that what it would take to launch a brand new company."

Every word of criticism directed at his erstwhile hero is accompanied by an apology. ("I'm sorry, Stan.") Dixon told the Journal, "I really felt bad. He deserved a better finale and hopefully he will have one last chance to show what he can do. This is not it."

But then, in any true Stan Lee story, this is never it. There is always another chapter in the ongoing suffering of a hero caught up in a persona, an alternate identity gone out of control in "a world he never made."

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