Ovitz Seeks Arbitration of Lawsuit by Ex-Employee

Michael Ovitz has gone on the offensive against a $4-million lawsuit filed earlier this month by an ex-employee and accused the former president of his company’s film division of being an ineffectual executive.

In a motion filed Thursday in Los Angeles County Superior Court, the former head of the now-defunct Artists Management Group sought to have the court move to resolve the dispute with former employee Cathy Schulman through binding arbitration. A hearing on his motion is scheduled for Nov. 13.

Schulman’s attorney Randy Sunshine said he found Ovitz’s position hard to believe. “He praised her on national television and now that he gets sued, ... she’s a bad employee.”

Schulman sued Ovitz; his company’s film unit, Artists Production Group; and the unit’s financier Vivendi Universal’s StudioCanal, on Oct. 7, alleging wrongful termination, breach of contract and fraud.

Ovitz was forced to sell Artists Management Group in May after StudioCanal backed out. A Vivendi audit had raised questions about how some $2 million had been spent.

Schulman’s lawsuit contends that after Ovitz found out that she had spoken to auditors and had relayed suspicions about possible misuse of funds, Ovitz fired her on Feb. 14. Ovitz maintains that Schulman resigned Jan. 3 and that he allowed her to stay after her resignation as a courtesy, but on Feb. 14 “in the face of continued interference and disruption ... and in light of Schulman’s confused assertion that she had not, in fact, resigned,” she was terminated.

Ovitz also contends that Schulman failed in her job.