The courtroom drama of shareholders vs. Disney’s battling Mikes — Michael Ovitz and Michael Eisner — has become a can’t-miss reality show for entertainment industry executives.
Not that others aren’t also following the Delaware business court lawsuit over the Disney board’s handling of Ovitz’s hiring — and his $140 million severance package.
“This is a case with tremendous importance on many levels,” says Catherine Crier, a former Texas judge who is a Court TV anchor.
Other companies and law firms are tracking the 6-week-old trial in the Court of Chancery to see if the case redefines the responsibilities and rights of corporate directors in making business decisions.
Insurers are waiting to see if American International Group and other companies covering Disney directors will be on the hook if shareholders win their quest to have the severance repaid.
Shareholders want to know if their money was wasted — and if someone will pay for it.
“There are so many people who have invested their hard-earned dollars in Disney stock,” Crier says. “They want to know if their interests are being taken care of, or if their money was exchanged due to some brotherly relationship between Eisner and Ovitz.”
But it’s in Hollywood where the tale of boardroom intrigue, lavish spending — and even a possible sexual harassment lawsuit involving top executives — has been the most compelling industry drama since, well, the last big Disney trial: Jeffrey Katzenberg’s $250 million breach-of-contract lawsuit in 1999.
“It’s part Shakespeare, part soap opera. It’s fascinating and repellent,” says former Disney executive Marty Kaplan, who now is associate dean of USC’s Annenberg School for Communication.