June 07, 2005
Disney Backstory
Posted by Christine Hurt

Gordon has already chimed in on the Disney suit surviving a motion to dismiss.  Prof. Ribstein's take is here.  I cannot read about this Roy Disney/Stanley Gold lawsuit without thinking about Stewart's recent Disney War.  From reading this tell-all, I have the impression that every changing of the guard at Disney for the past fifty years was predetermined.  Before CEOs and Presidents stepped down or even died suddenly, promises were made to others about the line of succession.  Roy Disney knows that because he was part of that system.  He hand picked Michael Eisner. 

So, with this as a backdrop, imagine a situation in which Roy Disney sees Eisner step down and knows that the board already knows who will be the CEO.  But, the board assures him and the rest of the shareholders that they have an "open mind" about the successor.  Imagine also that private conversations between Roy Disney and the board fleshed out that promise.  To Roy Disney, these assurances mean that the line of succession will not automatically take over and so he does not mount a campaign.  Then as it turns out the line of succession is employed.  He cannot sue on those verbal promises, but instead hangs his hat on the public "open mind" statement.  This statement to us seems like normal PR puffery, but to him it signalled something completely different, and (more importantly) the board knew that.

UPDATE:  I have now read the opinion.  Note that Chandler cites to allegations concerning Fox Family Channel made by Stewart in DisneyWar.  I assume he read it.

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