Walt Disney Co. is being sued by a shareholder who says the second-largest U.S. media company didn’t disclose that it was being sued.
Disney shareholder Aaron Kohn filed a securities fraud suit in U.S. District Court in Los Angeles that claims the company didn’t reveal a 1991 lawsuit over Winnie the Pooh franchise rights until a May Securities and Exchange Commission filing.
The suit claims Disney shares fell 42% from May 15 to Aug. 5 “as the case received greater and greater publicity.” Disney shares actually rose 1.5% in the three days following the SEC filing. Analysts have blamed the slide in Disney shares since then on disappointing results at the company’s theme parks, ABC network and movie studio.
Disney spokesman John Spelich said the suit has no merit.
The Winnie the Pooh case received media attention in January, before Disney’s SEC filing, when a judge unsealed volumes of documents in the dispute between Stephen Slesinger Inc. and Disney.
Shares of Burbank-based Disney rose 71 cents to $15.86 on the New York Stock Exchange.