Katzenberg, Disney May Go to Court

Jeffrey Katzenberg’s long-simmering, behind-the-scenes battle with Walt Disney Co. over money he says he is owed from his tenure as head of the company’s studio unit may burst into the open as early as next week.

Sources on Tuesday confirmed that Katzenberg’s lawyers have notified Disney they intend to file a lawsuit shortly if Katzenberg’s beef with the company isn’t settled in the next week or so. Sources place the damages Katzenberg and his lawyers tentatively plan to claim in the lawsuit at more than $200 million.

Katzenberg’s lawyer, noted Hollywood litigator Bertram Fields, declined comment on Tuesday, as did a Disney spokesman.

Since quitting as head of Walt Disney Studios in 1994 in a dispute with Disney Chief Executive Michael Eisner, Katzenberg has asserted that Disney owes him at least $100 million for profit generated by the film division when he headed it.

The linchpin of Katzenberg’s case is expected to be a memo from the late Disney President Frank Wells, which Katzenberg is expected to argue promises him a share of the profit he generated.

Disney has in the past maintained that the company has a policy of not giving executives a piece of the profits on its movies and TV shows.

After leaving Disney, Katzenberg co-founded the new DreamWorks SKG studio, along with moguls David Geffen and Steven Spielberg. Each of the three contributed about $33 million in seed money as part of the studio’s initial financing.

Last fall, the dispute appeared to be heading toward a possible resolution when Eisner placed calls to each of the three DreamWorks partners trying to patch things up. In addition, Michael Ovitz, the former top Hollywood agent who joined Disney as president last fall, was also said to be trying to broker a settlement between the company and Katzenberg.

People close to the situation said that although a settlement is possible, there appears to be too much bad blood over the issue to prevent a Katzenberg suit.

“There’s so much animosity here, something’s going to happen,” one source close to Disney said.