Roy & Stanley to sue Disney

[General Grizz]

Even though I don't think Roy is helping Disney, I can see where the merit for this lawsuit comes from. The selection process WAS a joke from the public's viewpoint. The idea of having Eisner sit in on possible interviews proves that point. The lack of actual candidates further proves that point. And the slow reaction of the board to cadidate inquiries yet again proves that point. All 3 of the above statements are public knowlegde. Now, go one step further and see what we don't know about the process and that could bode even worse for Disney.

As far as I'm concerned, this is not an issue about Iger, or even Roy, it's an issue about Eisner and the puppet board. Until the board is changed out to be totally independent, then these types of problems will exist. The first step of Eisner going out the door needs to be followed up by changing of the board. I have a feeling this lawsuit could follow the current Ovitz suit and enjoin all shareholders against the board, et al.

Very good points.

 

[wannab@dis]

Cold maybe.....rude, yeah, I will give you that one.

Roy has become a bitter old man who is whining like a little baby because he can't get his way........

While I truely wish death on nobody, Roy needs to go away. While he hold a significant amount of stock in Disney, he is not a majority shareholder....not by a large margin. He no longer has a voice, but instead, feeds the fans a bunch of emotional BS to get them to complain, even though his logic is flawed, and can be seen through by anyone with a decent head on their shoulders.

Whether Roy goes away or not, this lawsuit is about the board's inability to perform a truly unbiased and real search for a new CEO. As a shareholder, he has the right to hold them to their fiduciary duty. I'm actually surprised the other shareholder groups didn't do this first.

 

[General Grizz]

Lets set some things straight. I have been working on an Eisner vs Iger vs Roy site, and I have heavily researched these things.

First: To people that think Iger and Eisner are extremely different: They aren't. Their pre-Disney backgrounds are similar, and they are very close personally. There is no doubt Eisner picked Iger to succeed him.

Second: Eisner was a great CEO. He saved the company. If Eisner hadn't come to the company, it would have been broken up and sold to the highest bidder. He is also responsible for the huge explosion of growth and diversity in the company. He was the right person for the job, and did great things for TWDC. The loss of Wells, however, hurt his productivity.

Third: Roy just wants the magic to be the same as it was. He knows that Eisner's hands have been tied by the board for a while, and that is what he is fighting against. Not really Eisner personally, but the board as a decision making body.

Fourth: The lawsuit is the correct play, as if it goes ahead, it will most likely create another "two headed" company, Iger and someone else, such as Ed Catmull, or maybe Katzenburg back to run the company along with him.

The reason Roy didn't come to the ceremony is most likely because he has been unhappy with the board for a long time. Why make a statement in front of them if you don't agree with them?

ALSO, good points of consideration. :lol:

 

[Thrawn]

:snip:
As far as I'm concerned, this is not an issue about Iger, or even Roy, it's an issue about Eisner and the puppet board. Until the board is changed out to be totally independent, then these types of problems will exist. The first step of Eisner going out the door needs to be followed up by changing of the board. I have a feeling this lawsuit could follow the current Ovitz suit and enjoin all shareholders against the board, et al.

Agreed, except for its the other way around. The CEO has been acting as the puppet of the board, because his single vote isn't enough to accomplish anything. If it stays like this, the proof will come when Iger steps in officially and nothing changes.

Edit: (slightly off topic) If anyone wants to get more in depth on this whole story, I would highly recommend Disneywar, by James B. Stewart. He covers all the sides really well, and the only bias I can pick up is on behalf of TWDC. Not the shareholders, Eisner, or Roy, but the idea of the Walt Disney Company and everything it stands for.

 

[speck76]

If Roy is so unhappy with the board, why have most of his arguements been about Eisner.....

Why has he not tried to single out other board members (except maybe George Mitchell) and turn the shareholders against any of them?

 

[wannab@dis]

Can someone explain what "Enjoin Company and Board from Changing Eisner's or Iger's Compensation or Contracts " means?

If the suit is found to have merit, then any move forward on the lawsuit would require the company (Disney) and their board of directors to make no changes to the employeement contracts and pay of either Eisner or Iger. Basically, they are asking for Iger to not be allowed to be promoted based on the outcome of the lawsuit.

 

[speck76]

Whether Roy goes away or not, this lawsuit is about the board's inability to perform a truly unbiased and real search for a new CEO. As a shareholder, he has the right to hold them to their fiduciary duty. I'm actually surprised the other shareholder groups didn't do this first.

Do you really think any company does an unbiased search for a CEO?

 

[Thrawn]

If Roy is so unhappy with the board, why have most of his arguements been about Eisner.....

Why has he not tried to single out other board members (except maybe George Mitchell) and turn the shareholders against any of them?

Board members are chosen by different processes than the CEO. In order for them to get rid of a single board member, they would need either a resignation or a unanimous vote.

 

[Thrawn]

Do you really think any company does an unbiased search for a CEO?

Thats a very good point. However, you'd be hard pressed to find another company where an ousted board member is still willing to fight for the company and what it stands for.

 

[wannab@dis]

Do you really think any company does an unbiased search for a CEO?

It really doesn't matter what they do, it's what they SAY they will do. The board came out and said publically, and I believe changed the company bylaws, they would do a public and exhaustive search to find the right candidate.

As far as I know, there are no SEC requirements for an unbiased search or that a board must look for candidates outside the company. However, if the board makes statements or bylaws that include a set of ground rules, then they are bound by SEC rulings to abide by their own rules. Otherwise, it's seen as a violation of the company's fiduciary duty to the shareholders.

 

[MGMBoy]

If Roy and Stan hadn't filed it then someone else would have been bound to. I have no clue what went on with the decision process but it DOES seem a tad deceitful.

 

[General Grizz]

If Roy and Stan hadn't filed it then someone else would have been bound to. I have no clue what went on with the decision process but it DOES seem a tad deceitful.

The Board said promised that

1. That non-management directors will undertake a thorough and bona fide search to select a new CEO;

2. That this search will be completed and a new CEO announced by June 2005; and

3. That Mr. Eisner will step down as both CEO and as a Board member upon culmination of this process.

2 and 3 were based on one, and I'm not sure we can qualify their "search" as bona fide.

 

[MiklCraw4d]

Roy seems to be the only one trying to cause issue......

At least he is old, and nobody lives forever.

Wow, I wish the rep system were still in place.

Yeah, I disagree with him so I hope he dies.

Could it be that Roy has more than a merely fiscal interest in what happens to the company? He has been the sole member of the Disney family that has really stuck with it through the years, and I think he really wants everything to be right with the company. He's not perfect, and emotion may be playing a role, but I do not doubt his ultimate intentions.

The fact remains that Roy, Stanley, and anyone who questioned Eisner were removed from the board by very shady methods. While I do think that Iger has done a pretty good job so far, his selection process was extremely shady. The board is dominated by Eisner cronies and until there is a shake up it will remain that way. I don't necessarily think Iger should be given the boot at this time but there really needs to be an examination of the board's methods and makeup.

It may not be pretty, but it needs to be done. The board has become to insular and Roy's efforts are needed to cast some light on the situation.

 

[disneyplanet]

so now for the chicken or the egg question.

Is this all sour grape for not being included in DL 50th launch?
or was he invited and refused because of upcoming suit?

here is an excert from a nother thread. was roy at the 50th

I know things have been strained between the board and Roy. It would have been nice to see any of The Disney's at the 50th. Remember it was all started with a mouse. But it came from the mind of a Disney. Were any them at the 50th. Roy or one of Walts Daughter or one of the Family Memebrs. Were they invited. does anyone know. I see Michael Eisner was there........Just that it would have been nice to see Roy at the big luanch party or some other Disney. It says alot that Roy had to go the days before, and M.E. was there. I hoped and believe that things would go in a new direction not old not mike's. That a olive branch was extented or the hatchet was buried. It say alot. I thought Mike was out. but he keep showing up and when he does he seems ed. IE not waring the hat and the ovious forced smile when interviewed. I give all the support as a stock holder since 1981 (yes I have a fair amount due to all the splits) to Bob Iger but I hope he is not a Mike ver. 2, or some puppet. Yes Mike was great in the begining But so was Anakin Skywalker. absolute power corrupts absolutely.


I mean the olive branch from either side could have been extended. but it looks like the playground fight goes on, but on a corp level. Send them both to their corners for a time out.

 

[askmike1]

If Roy is so unhappy with the board, why have most of his arguements been about Eisner.....

Because this is not a campaign to SaveDisney, it is one to OustEisner. In the words of Walt's daughter, "[Roy's campaign was a] vicious and personal campaign."

Roy seems to be the only one trying to cause issue......

At least he is old, and nobody lives forever.

The First Sentence: I agree and if the rep system was still here, I would have given you positive rep.
Second Sentence: Was it a little rude, yes. But the same things have been said about Michael Eisner on these boards too and nobody complained about people saying that.

First: To people that think Iger and Eisner are extremely different: They aren't. Their pre-Disney backgrounds are similar, and they are very close personally. There is no doubt Eisner picked Iger to succeed him.

Eisner and Iger are complete differents. The fact that they come from similar pasts mean nothing. There methods of leading is different. Iger is destroying the Strategic Planning dept. that Michael Eisner set up. He is rumored to be extending olive branches to Pixar and Roy (although after this suit, I doubt the second part). Eisner wants to be involved in everything while Iger would rather each deptartment make their own decisions.

He has been the sole member of the Disney family that has really stuck with it through the years.

That is purely because he kicked out, insulted, and broke up ties to the other part of the family...you know, Walt's daughter, Diane.

Finally, as for the whole Roy-didn't-come-to-the-50th, 05/05/05 was not Disneyland's 50th anyway. It was a start of Walt Disney Company celebration. Roy is not part of the company anymore. Why should he have anything to do with 05/05/05. You can argue about 7/17/05, but May 5th was a company event, not a Disney event.

-Michael

 

[General Grizz]

As I posted above, he WAS invited and could have gone if he wanted to.

 

[SirGoofy]

Ya know, I am kinda getting sick of Roy. Most of his biggest greifs have been fixed, but it seems like he won't let it go. Give Iger a chance. Who knows, once Eisner is gone, he may be a completely different guy.

 

[General Grizz]

Because this is not a campaign to SaveDisney, it is one to OustEisner. In the words of Walt's daughter, "[Roy's campaign was a] vicious and personal campaign."

Yep... one of the major goals was to oust Eisner. But right now, that does not seem to be the dominant issue.

But the same things have been said about Michael Eisner on these boards too and nobody complained about people saying that.

Although that does not justify the comment in the eyes of those who didn't appreciate it. . . I'm sure those who have responded negatively to the comment would have also felt the same way about such a comment regarding Mr. Eisner.

Iger is destroying the Strategic Planning dept. that Michael Eisner set up. He is rumored to be extending olive branches to Pixar and Roy (although after this suit, I doubt the second part). Eisner wants to be involved in everything while Iger would rather each deptartment make their own decisions.

We're hearing Iger has good plans in what you just posted. However, I have not heard a solid reason based his actual track record at Disney that proves him to be the best selection of a CEO. If a better search had been conducted, then whatever good Iger had actually accomplished could be compared, and then the determination could have been made. And if Iger stays in the position of CEO, I will be more than excited to see his plans to reduce Strategic Planning power take action.

Roy is not part of the company anymore. Why should he have anything to do with 05/05/05. You can argue about 7/17/05, but May 5th was a company event, not a Disney event.

No, he does not work for the Company. But he has had a solid history in the past and has perhaps some of the greatest ties left to the man who is heard behind the fantastic new fireworks display. Art Linkletter doesn't work for the Company, but he spoke. Roy, likewise, has a great history at Disney as the leader in Walt Disney Feature Animation (remember the late 80s?). So there is a justification if he wanted to speak. He didn't, and opted to visit the park with his family.

 

[Thrawn]

Eisner and Iger are complete differents. The fact that they come from similar pasts mean nothing.

Very humorous. Do you know anything of Iger's track record? No? Then I suggest you run on over to google and wikipedia and start researching.

There methods of leading is different. Iger is destroying the Strategic Planning dept. that Michael Eisner set up.

So instead of the SPD that was responsible for greatly expanding the company, he is going to try and do everything himself? Yeah, Ron Miller tried that too. Worked out well. :hammer:

He is rumored to be extending olive branches to Pixar and Roy (although after this suit, I doubt the second part).

Pixar will be coming back for a few reasons, none of them involve Iger.
1) No one else has made a serious offer to buy their movies.
2) They can't do their own marketing on a Disney scale.
3) The residual DVD sales that come only with Disney movies. And the straight to DVD sequals.

Eisner knew they had nowhere else to go, and thats why he didn't give in to Steve Jobs outrageous demands.

Eisner wants to be involved in everything while Iger would rather each deptartment make their own decisions.

You just said that Iger is getting rid of the SPD. That group was responsible for making all the departmental decisions. Now, those decisions will be brought to the board and Iger himself. Less will get done this way.

Edit: Grizz ... just curious as to what you would like to see as a CEO.
Eisner
Iger
Roy approved choice.
Someone else.

 

[Computer Magic]

From SaveDisney.com website


Roy Disney, Stanley Gold Sue The Walt Disney Company, Certain Directors For Fraud, Breach of Duty of Disclosure Regarding Board's Public Statements About Search for Eisner's Replacement As CEO

Suit Asks Court to:

• Void 2005 Election of Directors
• Compel Company to Hold Another Election for Directors After Full Disclosure About CEO Selection Process
• Enjoin Company and Board from Changing Eisner's or Iger's Compensation or Contracts

Burbank, CA - May 9, 2005 -- Roy E. Disney and Stanley P. Gold today filed suit in Delaware Chancery Court against The Walt Disney Company and certain members of the Board of Directors of the Company alleging that the Board made false statements to the Company's shareholders about its CEO search in order to induce shareholders to vote for the incumbent Board at the 2005 meeting and to induce Messrs. Disney and Gold not to run an alternate slate of directors at that meeting.

In addition to The Walt Disney Company, the two former Disney Directors sued Robert A. Iger, Michael D. Eisner, Judith L. Estrin, John S. Chen, Aylwin B. Lewis, Monica C. Lozano, George J. Mitchell and Leo J. O'Donovan, S.J, for fraud and breach of the duty of disclosure in connection with the Board's public statements about the search for a replacement for outgoing CEO Michael Eisner.

In their lawsuit, Messrs. Disney and Gold are asking the Court to void the 2005 election of Disney Company directors and to compel the Company to hold another election for directors after full and fair disclosure of all material facts about the CEO selection process. Messrs. Disney and Gold are also asking the Court to enjoin the Company and the Board from changing either Eisner's or Iger's compensation or employment contracts. :

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.

According to the complaint, despite the Board's public promises to Company shareholders that it would conduct the CEO search with 'open minds' and with no predeterminations or preconditions, in reality, the Board's CEO selection process precluded serious and effective consideration of external candidates. The complaint cites, among other things:

• reports that the Board interviewed only one external candidate, delayed notifying her of any decision and did little to dissuade her from withdrawing her candidacy;
• Michael Eisner's presence or expected presence at interviews of external candidates; and
• the Board's failure to investigate Iger's role in the Fox Family Channel acquisition, the presentation of overly optimistic projects about Fox Family to the Board and the related withholding from the Board of the CFO's plan to save the Company $400 million by writing down the value of those Fox Family assets.

Messrs. 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 Messrs. 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.