Disney Faces New Trial in Intelefilm Contract Lawsuit

Walt Disney Co.’s ABC Radio Networks must face a new trial in Intelefilm Corp.’s claim that the No. 2 media company owes the defunct Children’s Broadcasting Corp. monetary damages for a contract dispute, an appeals court said.

The U.S. 8th Circuit Court of Appeals on Tuesday set aside U.S. District Judge Donald Alsop’s 1999 reversal of a $20-million jury verdict in favor of Children’s Broadcasting. The new trial will focus solely on the issue of monetary damages.

Minneapolis-based CBC stopped distributing its AAHS World Radio Format in January 1998. It changed its name to Intelefilm in June 1999 after selling its radio stations.

“We believe we will be successful again,” Christopher Dahl, Intelefilm’s president and chief executive, said in a statement. “We look forward to the opportunity.”

CBC sued in 1996 after ABC ended their alliance. CBC charged that ABC, which had served as its national advertising representative, broke a contract and then misappropriated the smaller company’s trade secrets to form its own children’s network, Radio Disney.

Burbank-based Disney shares rose 65 cents to close at $29.25 on the New York Stock Exchange, and Intelefilm’s shares rose 48 cents to close at $1.18 on Nasdaq.