Disney Case Lawyer 'From Another Planet'

06 December 2004

Hollywood's funny little ways, particularly of bestowing gifts on its pals, were the focus of a bad-tempered exchange at the Delaware Chancery Court in the USA.

The high profile legal action between Walt Disney Company shareholders versus Disney directors featured the third day of testimony from former Mouse House legal counsel Sanford Litvack .

An irritated Litvack told shareholders' lawyer Seth Rigrodsky that they were on "different planets" if he regarded the giving of stuffed toys by ex-president Michael Ovitz to employees of his former company was enough cause to fire him.

And it is the manner of the latter's firing (and hiring) which is in dispute. Ovitz left the entertainment titan's bosom in 1996 after just fourteen turbulent months. He was sent on his merry way clutching a golden goose in the shape of a $140 million (€105.5m, £72.8m) 'no fault' severance package.

Disney shareholders claim the company's board was negligent in its scrutiny of Ovitz's contract and contend his expense account profligacy was cause enough to sack him without compensation. They want the severance deal repaid, plus $60m interest.

Litvack was closely questioned over several acts of Ovitz's second-hand generosity, including an $89 bouquet of flowers and an $325 antique presented to actor Dustin Hoffman, a client at talent agency Creative Artists, founded by Ovitz.

Responded Litvack: "Every one of the expenses you've pointed out I would have approved. They were reasonable."

The legal eagle was also challenged as to why there was no negotiation to reduce the size of the pay-off once it became clear Ovitz would have to go.

Litvack maintains an alternative to the no-fault severance would have required evidence that he was guilty of gross negligence or malfeasance - as laid down in his contract.

With the whiff of sanctimony in the air he told the court: "You don't negotiate unethically by telling a lie. I don't do those things.

"He was terminated because he didn't work out."

Data sourced from Financial Times Online; additional content by WARC staff