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Former Disney directors sue firm

Date Class
9th May 2005 Other Issue
 
Details
Two ex-Walt Disney directors are suing the firm claiming investors were misled over the selection of a new chief executive to succeed Michael Eisner.

Roy Disney, nephew of founder Walt Disney, and Stanley Gold allege that Disney's board made false statements in relation to Bob Iger's appointment.

Mr Iger, currently Disney's president and chief operating officer, is to succeed Mr Eisner in September.

Walt Disney dismissed the lawsuit as "frivolous and baseless".

In their suit, the rebel duo claim the board did not "seriously consider" any other candidate apart from Mr Iger.

Mr Disney led a shareholder revolt against Mr Eisner at a controversial annual general meeting in 2004, blaming him for what he said was the company's poor financial performance.

Mr Eisner subsequently decided to step down as chairman and chief executive, triggering a process which led to Mr Iger's appointment as chief executive designate in March.

In a lawsuit filed at a court in the US state of Delaware, Mr Disney now claims "fraud and breach of duty of disclosure" in connection with the board's public statements about its search for Mr Eisner's successor.

Mr Disney alleges that Disney's board only interviewed one external candidate and that Mr Eisner was present or expected to be present when candidates were interviewed.

He also claims that Disney used "company resources to promote Mr Iger's candidacy".

The suit demands that Disney reveals details of how the selection process was conducted and that its board be prevented from altering the terms of Mr Eisner and Mr Iger's contracts.

Disney's board has insisted that Mr Iger was chosen after a "lengthy, thorough and professional selection process" in which a number of external candidates were considered.

Walt Disney denounced the legal action.

"The record of strong performance of The Walt Disney Company speaks for itself," said a Walt Disney spokeswoman.

"This frivolous and baseless lawsuit reflects the mean-spirited, self-serving interest of two ex-board members."

 

 

 


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