Disney holders ask court to reverse pay ruling
DOVER, Delaware (Reuters) - A lawyer representing Walt Disney Co. shareholders on Wednesday asked Delaware's high court to reverse a ruling that found the company's directors did not breach their duty when awarding former President Michael Ovitz a $130 million severance package.
Steven Schulman, a New York attorney with the firm of Milberg Weiss Bershad & Schulman, argued before the five justices of the Delaware Supreme Court that the rule used to show the Disney directors acted in good faith had been wrongly interpreted.
But Gregory Williams, a lawyer representing the defendants, told the court that the board acted properly and "no one expected this perfect storm," where Ovitz was ousted after only 14 months and Disney's stock price shot higher, inflating the price of the severance package.
"People believed hiring Ovitz was the right thing for the company," Williams said.
The oral arguments marked the latest chapter in the long-running legal battle over Ovitz's out-sized payout. The case, which has dragged on for nearly a decade, has been closely watched because it tests the limits of liability for directors making corporate decisions.