Ovitz Insists His Disney Goal Was Success - Not Excess

29 October 2004

The co-star in Disney's continuing courtroom drama, Michael Ovitz, delivered an Oscar-worthy testimony during his first day on the stand at Delaware Chancery Court.

Ovitz, whose $140 million (€110m, £76m) no-fault severance payment after just fourteen months as president of the Disney company is being disputed by shareholders, told the court he had been anxious to stay in the job, had found the odds stacked against him and, most touchingly, the experience had destroyed his 25-year friendship with the then chairman Michael Eisner.

Shareholders claim the Disney board neglected its duty to properly scrutinise the terms of Ovitz's hiring and subsequent departure between 1995 and 1996. They argue he should have been fired "for cause", which would have denied him most of the severance pay-out. They want the money back from the board, plus $60m interest.

During his testimony Ovitz claimed Eisner did pay attention to shareholders' interests and he fully believed the board understood the terms of the disputed contract.

Under examination by his own counsel, Ovitz claimed he had given up a $25m a year role at his talent agency, Creative Artists, at Eisner's urging, to work for $1m at Disney.

And he was indignant and "insulted" when it was suggested by the plaintiffs' counsel that he had profited from a deal he had helped to broker between former Creative Artists colleagues and Disney and Coca Cola.

When it was suggested to him in court that "failure was a financial incentive", Ovitz insisted he wanted to succeed in his role at Disney and money was the last thing on his mind . He said: " I had no interest in leaving… I knew if I didn't make it work out that it would pretty much taint me career-wise…perhaps forever."

But, he told the court, he felt undermined almost from day one and could not understand why his close friend Eisner was calling him a 'psychopath' and 'liar' in memos less than two months into his tenure.

He says he was eventually left out of the information loop, "cut out like a cancer".

He claimed Disney's then general counsel Sanford Litvack tried to sabotage him by first refusing to report to him and then lecturing him about the company's expenses policy.

The plaintiffs claim Ovitz's expenses were excessive and could have been used as a reason to fire him. They cite an alleged $2m office refit which Ovitz insists was nothing to do with him: "I didn't approve the budget. I didn't ask for this office. I had no idea what it cost."

The case continues.

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