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Disney Vs. Disney Co.

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Roy Disney, nephew of legendary company founder Walt Disney and Stanley Gold filed a lawsuit today against the company Walt founded in a Delaware court today. The lawsuit accuses the board at Disney, led by Michael Eisner and Robert Iger and it requests the court overturn the election of Iger as Eisner’s replacement.

The suit claims the Disney Co. failed to meet obligations of disclosure when choosing the new CEO and that some members of the board lied to entice stockholders to vote for the new CEO.

The complaint states, “In light of Disney’s and Gold’s successful “Just Say No” campaign at the 2004 annual meeting and threat to run an alternate slate of directors at the 2005 annual meeting, defendants delayed their selection of [Robert] Iger until shortly after the 2005 annual meeting, used company resources to promote Iger’s candidacy and did not in good faith seriously consider any other candidate.” As a result of Messrs. Disney’s and Gold’s efforts, a total of 45.37% of the company’s stockholders withheld their votes for Mr. Eisner, 25.69% withheld their votes for Senator Mitchell, and 24.37% withheld their votes for Ms. Estrin in an unprecedented “No Confidence Vote” at the Company’s 2004 annual meeting.

Disney and Gold’s complaint states that shareholders were misled by the board’s public promises of open mindedness, saying that had “Disney and Gold known that the company and a majority of the board did not intend to stand by their public statements about engaging in a bona fide CEO selection process, they would have run an alternate slate of directors at the 2005 annual stockholders meeting.”

Also revealed in the complaint is the company’s recent rejection of Disney’s and Gold’s request under Delaware law for books and records documenting the board’s search for Eisner’s successor? Messrs. Disney and Gold’s complaint cites the company’s refusal to permit any scrutiny of the board’s decision to appoint Iger as CEO as further evidence that shareholders were misled by the board’s statements about a bona fide process.

This lawsuit marks the latest in a series of battle Roy Disney and Michael Eisner have been having over the direction of the company, which amo
ng other things lost its deal with Pixar earlier this month. Disney also no longer operates any of its hand drawn animation studios that turned out such classics as Snow White and the Seven Dwarfs, Jungle Book, and a myriad of other films.

John Stith is a staff writer for WebProNews covering technology and business.

Disney Vs. Disney Co.
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