1. If I'm reading this correctly, that means Arcade can destroy a held object.
2. If he does, would any character have been adjacent to the object to take damage?

My friends and I had always thought that you couldn't draw LoF to held objects, so when I would use Arcade, I would Outwit Super Strength and then blow up the object.

Graphically, Thing is carrying an object and is adjacent to Captain America and Nick Fury. Arcade has Armor Piercing and blows up the object without Outwitting Super Strength- does anyone take damage?


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A...............T
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Characters can't target held objects unless they have a power/feat/etc that specifically says they can. Arcade's power does not specifically say he can do so.
Rule book, page 18:

CARRYING AN OBJECT
A character can carry only one object at a time. A character can’t drop an object once it is carried. An object carried by a character can’t normally be targeted, destroyed, or taken away from the carrying character. To dispose of a carried object, the character must use it in an attack. If, however, a character carrying an object is defeated or loses the ability to use Super Strength, the character automatically drops the object, which stays in the square the character occupied when it was defeated or the power was lost. If there is already an object in the square when an object is dropped, the dropped object is removed from the game.

But the top quote is from the new player's guide- how else can a character draw line of fire to a held object?

Most can't. Or, at least, have no real reason to do so.

A few can, though, and that clarification is for those corner cases. Cases like:

MOLECULAR DESTRUCTION: Once per turn as a free action, Molecule Man can choose one of the following options: (1) Remove any target object (including an object carried by a character) from the game. (2) Destroy a target square of blocking terrain. (3) Destroy a portion of a target wall bordering a single square. For all options, the target must be 6 or fewer squares from Molecule Man and he must have a clear line of fire to the target.

OK, that makes a lot more sense. Thanks.