Delaware Court Allows Lawsuit

[jlima]

BURBANK, Calif., June 6 /PRNewswire/ -- Roy E. Disney and Stanley P. Gold
today said that they are pleased with the Delaware Chancery Court's ruling
allowing their lawsuit to go forward against the Walt Disney Company and
certain members of the Board of Directors of the Company with an expedited
trial date of August 2005.

The lawsuit, which was filed on May 9, 2005, alleges that the Walt Disney
Company Board made false statements to the Company's shareholders about its
CEO search in order to induce shareholders to vote for the incumbent Board at
the 2005 annual meeting and to induce Messrs. Disney and Gold not to run an
alternate slate of directors at the meeting.

In addition to the Walt Disney Company, the two former Disney Directors
sued Robert A. Iger, Michael D. Eisner, Judith L. Estrin, John S. Chen, Alwyn
B. Lewis, Monica C. Lozano, George J. Mitchell and Leo J. Donovan, S.J., for
fraud and breach of duty of disclosure in connection with the Board's public
statements about the search for a replacement for outgoing CEO Michael Eisner.

In his ruling, Chancellor Chandler stated, " ... plaintiffs have alleged
facts suggesting that the Company's board did not go about the process of
searching for a new CEO with 'open minds,' without prior determinations and
giving "full consideration" to external candidates. The complaint alleges
that only one external candidate was interviewed, that Mitchell told that
candidate 'she was not a serious candidate,' and that Eisner's presence at
interviews of external candidates, "was intended to chill and did chill full
consideration of qualified external candidates for the position of CEO.'"

"Should these allegations be proven, plaintiffs could be entitled to the
relief they seek because the board's statements materially misled plaintiffs
with respect to the board's intent to conduct a bona fide executive search
process."

In their lawsuit, Messrs. Disney and Gold asked the Court to void the 2005
election of Disney Company directors and to compel the Company to hold another
election for directors after full and fair disclosure of all material facts
about the CEO selection process. Messrs. Disney and Gold also asked the Court
to enjoin the Company and the Board from changing either Messrs. Eisner's or
Iger's compensation or employment contracts.

 

[manning]

From another thread

Looks like Roy and Gold did the classic let's sit back and see if their actions indict (right word?) them, which they feel has. It also looks like they wrote key correspondence to set the situation they wanted. Gold knowing the enemy and their actions has set them up as best he could.

One thing you have to admit, Gold is tenacious and clever.

If it works, time will tell!!

So far, so good.

 

[JimB.]

But the judge also stated:

"With respect to the 'troubling facts' listed in the complaint, I cannot conclude that they ... demonstrate that the company's board went about the process of searching for a new CEO in a manner inconsistent with the board's Sept. 21, 2004, statement"

Which I interpret as saying that yes, the suit can go forward, but he does not give much creedence to the arguements set forth in the suit.

IMHO, it may prove to be a waste of time & $$ unless Roy & Stanley's goal is only to be a thorn in the side of the Board.

 

[manning]

But the judge was not satisfied enough to throw it out. At least they get their day in court.