Holder Sues Disney Over Another Suit
August 17, 2002
LOS ANGELES (New York Times/Bloomberg News) -- The Walt Disney Company is being sued by a shareholder who says the company's delay in disclosing another lawsuit led to a steep decline in its stock price.
The shareholder, Aaron Kohn, filed a securities-fraud suit that says the company did not reveal the existence of a 1991 lawsuit over Winnie the Pooh franchise rights until May, when it made a filing with the Securities and Exchange Commission.
The suit says Disney shares dropped 42 percent from May 15 through Aug. 5 "as the case received greater and greater publicity." Disney's shares actually rose 1.5 percent in the three days after the S.E.C. filing. Analysts attributed the subsequent slide in the shares since then to disappointing results at Disney's theme parks, ABC network and movie studio.
A Disney spokesman, John Spelich, said the suit had no merit and "we will defend ourselves vigorously, and are confident in the final outcome."
Mr. Kohn's complaint involves a suit filed by Stephen Slesinger Inc. In its first-quarter 2002 filing, Disney said "damages could total as much as several hundred million dollars and adversely impact the value" of future exploitation of the Pooh characters.
The Winnie the Pooh case received a spate of media attention in January, before Disney's S.E.C. filing, when a judge unsealed more than 40 volumes of documents in the dispute.
Slesinger has owned the North American merchandising rights for Winnie the Pooh since 1930. The company claims Disney underreported sales and also owes royalties for a range of products.
Disney says those items are not covered by the license. The case is set for a March trial.
August 17, 2002
LOS ANGELES (New York Times/Bloomberg News) -- The Walt Disney Company is being sued by a shareholder who says the company's delay in disclosing another lawsuit led to a steep decline in its stock price.
The shareholder, Aaron Kohn, filed a securities-fraud suit that says the company did not reveal the existence of a 1991 lawsuit over Winnie the Pooh franchise rights until May, when it made a filing with the Securities and Exchange Commission.
The suit says Disney shares dropped 42 percent from May 15 through Aug. 5 "as the case received greater and greater publicity." Disney's shares actually rose 1.5 percent in the three days after the S.E.C. filing. Analysts attributed the subsequent slide in the shares since then to disappointing results at Disney's theme parks, ABC network and movie studio.
A Disney spokesman, John Spelich, said the suit had no merit and "we will defend ourselves vigorously, and are confident in the final outcome."
Mr. Kohn's complaint involves a suit filed by Stephen Slesinger Inc. In its first-quarter 2002 filing, Disney said "damages could total as much as several hundred million dollars and adversely impact the value" of future exploitation of the Pooh characters.
The Winnie the Pooh case received a spate of media attention in January, before Disney's S.E.C. filing, when a judge unsealed more than 40 volumes of documents in the dispute.
Slesinger has owned the North American merchandising rights for Winnie the Pooh since 1930. The company claims Disney underreported sales and also owes royalties for a range of products.
Disney says those items are not covered by the license. The case is set for a March trial.