Both Sides Hit Credibility in Disney Trial

To Jeffrey Katzenberg’s lawyer, Walt Disney Co. Chairman Michael Eisner tells “one of the most patently incredible stories I’ve ever heard” about contract promises made to his former studio chief.

To Disney’s lawyer, Katzenberg’s side spins conspiracy tales about Disney’s actions toward him “that would make Oliver Stone proud.”

As this act of Katzenberg’s breach-of-contract lawsuit closes, both sides on Monday got in their last licks during final arguments.

This phase is aimed at defining the parameters of Katzenberg’s contract and a special lump-sum bonus he says Disney owes him that could be worth more than $250 million.

Katzenberg argues that he is still owed a bonus based on 2% of the future profit to Disney generated by the films and TV shows he oversaw during his 10-year tenure, which ended in 1994. Katzenberg and Disney reached a partial settlement of the case in 1997 and are now arguing over how much he should be paid.

Katzenberg lawyer Bert Fields continued to hammer at Eisner’s credibility and his volatile testimony on the stand last week, arguing that memos refute Eisner’s claim that Katzenberg gave up the special 2% bonus plan. He said his client would never have agreed to such a provision. Fields also sought to show that Eisner harbors a “personal animus” toward Katzenberg that has dragged out the case. Fields argued that Katzenberg is owed substantial interest dating back nearly three years.

But Disney lawyer Lou Meisinger suggested that Fields’ attempts to show Eisner’s animosity were aimed at generating headlines.

“It was a titillating, media-driven theory in which there was no proof,” Meisinger said. He also said that what Fields characterized as a threat was actually a plea from Eisner not to let the case deteriorate into personal animosity.

Closing arguments are expected to end today. After a recess, the trial will enter a second segment in which experts will decide the worth of the films and TV shows created during Katzenberg’s tenure.

Eventually, retired Los Angeles County Superior Court Judge Paul Breckenridge Jr., who is acting as a referee in the case, will decide on an amount and then award Katzenberg 72.5% of that total, a discount the two sides agreed to in the partial settlement.