Suit Over Pooh Disclosure Tossed

Walt Disney Co. on Monday won the dismissal of a lawsuit by shareholders who claimed the company didn’t disclose the risks it faces from a lawsuit over Winnie the Pooh franchise rights.

U.S. District Judge Mariana Pfaelzer in Los Angeles granted Disney’s motion to dismiss the investors’ lawsuit. She gave the investors, whose suits have been consolidated, 30 days to resubmit their complaint to fix defects.

The shareholders claimed Disney, the second-largest U.S. media company, failed until 2002 to reveal the existence of a 1991 lawsuit brought by the family that controls Winnie the Pooh rights. The suit was disclosed in a May 2002 Securities and Exchange Commission filing.

Disney said that the Pooh case had been sealed until January 2002 and that it made the 2002 disclosure after a judge ruled on a method to compute damages. That ruling since has been stayed.

“The plaintiffs have decided to bring a suit predicated on the outcome of a lawsuit,” which is “not a valid basis for a securities lawsuit,” said John Spiegel, an attorney for Disney.