Disney Shareholders Sue Over Pooh
08/16/02 20:36 EDT
LOS ANGELES (AP) -- A lawsuit filed on behalf of Walt Disney Co. shareholders accuses the company of withholding information about pending litigation over merchandise rights to Winnie the Pooh, an action that hurt shareholders when the consequences became known.
In 1961, Stephen Slesinger licensed Pooh merchandising rights to Disney. That license was renewed in 1983.
In 1991, his heirs sued Disney, claiming Disney owes them millions in unpaid royalties on sales of some merchandise covered in the 1983 agreement. That case is scheduled to go to trial in March.
The shareholder lawsuit, filed Thursday in United States District Court, claims Disney concealed this information and the potential impact of it until a May regulatory filing.
The suit, which is seeking class action status, claims shareholders first learned the consequences of a preliminary negative ruling in the Pooh case in the May filing.
As a result, the shareholders claim company's stock price fell nearly 42 percent, from $24.50 to $14.27, between May and Aug. 5
Disney officials denied the allegations Friday.
``The lawsuit has no merit and we will defend ourselves vigorously, and are confident in the final outcome,'' spokesman John Spelich said.
In May, Disney said it would cost the company ``several hundred million dollars'' and impair Disney's rights to merchandise Pooh in the future if a preliminary ruling by a Los Angeles judge hearing the Pooh case were to stand.
Disney denies the charges in the initial Pooh suit.
The shareholder suit names Disney chief executive Michael Eisner and chief financial officer Thomas Staggs as defendants. The plaintiffs seek unspecified compensatory damages.
Shares of Disney were up 71 cents to $15.86 at the end of regular trading on the New York Stock exchange Friday on news that Eisner invested $10 million in Disney shares this week.
08/16/02 20:36 EDT
LOS ANGELES (AP) -- A lawsuit filed on behalf of Walt Disney Co. shareholders accuses the company of withholding information about pending litigation over merchandise rights to Winnie the Pooh, an action that hurt shareholders when the consequences became known.
In 1961, Stephen Slesinger licensed Pooh merchandising rights to Disney. That license was renewed in 1983.
In 1991, his heirs sued Disney, claiming Disney owes them millions in unpaid royalties on sales of some merchandise covered in the 1983 agreement. That case is scheduled to go to trial in March.
The shareholder lawsuit, filed Thursday in United States District Court, claims Disney concealed this information and the potential impact of it until a May regulatory filing.
The suit, which is seeking class action status, claims shareholders first learned the consequences of a preliminary negative ruling in the Pooh case in the May filing.
As a result, the shareholders claim company's stock price fell nearly 42 percent, from $24.50 to $14.27, between May and Aug. 5
Disney officials denied the allegations Friday.
``The lawsuit has no merit and we will defend ourselves vigorously, and are confident in the final outcome,'' spokesman John Spelich said.
In May, Disney said it would cost the company ``several hundred million dollars'' and impair Disney's rights to merchandise Pooh in the future if a preliminary ruling by a Los Angeles judge hearing the Pooh case were to stand.
Disney denies the charges in the initial Pooh suit.
The shareholder suit names Disney chief executive Michael Eisner and chief financial officer Thomas Staggs as defendants. The plaintiffs seek unspecified compensatory damages.
Shares of Disney were up 71 cents to $15.86 at the end of regular trading on the New York Stock exchange Friday on news that Eisner invested $10 million in Disney shares this week.