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Friday, February 27, 2004

More on Disney: The New York Times has an article discussing the increasing perilous position in which Disney CEO Michael Eisner now finds himself. After numerous large shareholders have voiced their lack of confidence in Eisner, it appears that a large percentage of voters may abstain from voting in the upcoming board election, rather than vote for the unopposed Eisner. A similar tactic led to the resignation of Stephen M. Case, the former chairman of AOL Time Warner. Reuters reports that the vote against Eisner could top thirty percent.

In more bad news for Disney, a Delaware court unsealed many documents in a shareholder lawsuit against Disney, which includes allegations that Eisner unilaterally hired friend Michael Ovitz to be the company's president, and then negotiated his termination and buy-out also without consulting the Board of Directors. The case, filed in 1997 a shareholder derivative action (which means that any money awarded goes to Disney rather than to individual shareholders), is scheduled to go to trial this year in Delaware Chancery Court. One of the documents unsealed is a letter from Eisner to Ovitz, which states the problems with the structure of Disney's boards and the changes that need to be made.


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