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This excerpt taken from the DIS 10-K filed Dec 7, 2005. In re The Walt Disney Company Derivative
Litigation. William and Geraldine
Brehm and thirteen other individuals filed an amended and
consolidated complaint on May 28, 1997 in the Delaware
Court of Chancery seeking, among other things, a declaratory
judgment against each of the Company’s directors as of
December 1996 that the Company’s 1995 employment agreement
with its former president Michael S. Ovitz, was void, or
alternatively that Mr. Ovitz’s termination should be
deemed a termination “for cause” and any severance
payments to him forfeited. On October 8, 1998, the Delaware
Court of Chancery dismissed all counts of the amended complaint.
Plaintiffs appealed, and on February 9, 2000, the Supreme
Court of Delaware affirmed the dismissal but ruled also that
plaintiffs should be permitted to file an amended complaint in
accordance with the Court’s opinion. The plaintiffs filed
their amended complaint on January 3, 2002. On
February 6, 2003, the Company’s directors’ motion
to dismiss the amended complaint was converted by the Court to a
motion for summary judgment and the plaintiffs were permitted to
take discovery. The Company and its directors answered the
amended complaint on April 1, 2003. On May 28, 2003,
the Court (treating as a motion to dismiss the motion for
summary judgment into which it had converted the original motion
on February 6, 2003) denied the directors’ motion to
dismiss the amended complaint. Trial commenced on
October 20, 2004 and on August 9, 2005, the Delaware
Court of Chancery issued an order entering judgment against the
plaintiffs and in favor of all defendants on all counts.
Plaintiffs have appealed from the order.
Similar or identical claims have also been filed by the same plaintiffs (other than William and Geraldine Brehm) in the Superior Court of the State of California, Los Angeles County, beginning with a claim filed by Richard and David Kaplan on January 3, 1997. On May 18, 1998, an additional claim was filed in the same California court by Dorothy L. Greenfield. All of the California claims were consolidated and stayed pending final resolution of the Delaware proceedings. The Claim filed by Dorothy L. Greenfield was voluntarily dismissed with prejudice on October 24, 2005.
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