Ovitz’s Spending Described as Normal

Walt Disney Co.’s former top lawyer said ex-President Michael Ovitz’s penchant for using company funds to buy gifts, such as stuffed animals and antiques, didn’t justify ousting Ovitz without paying his severance.

Sanford Litvack, who stepped down as Disney’s general counsel in 2000, said Thursday that an auditor’s finding that Ovitz spent more than $4,000 on gifts for actors and directors didn’t change Litvack’s conclusion that there were no grounds to fire the former agent without paying his severance.

“If you think that’s cause for terminating somebody, you and I are living on different planets,” Litvack, 68, told a lawyer for shareholders suing in Delaware Chancery Court to recover Ovitz’s severance. Litvack also is a former Disney director.

In his third day of testimony, Litvack sought to counter investors’ accusations that Chief Executive Michael Eisner had grounds to deny Ovitz his severance package, which plaintiffs estimate at more than $140 million.

After Ovitz left the company, Disney officials hired outside auditors to review his expenses in the wake of questions about his use of the company’s jets for private trips and gifts given to actors, directors and employees.

Ovitz earlier testified that he didn’t violate Disney’s expense or gift-giving policies and said that company officials approved all his expenses.

Auditors found that Ovitz had given actor Dustin Hoffman a $325 antique for his birthday. They also flagged a $1,000 “firearm” Ovitz gave film director Robert Zemeckis as a gift. Neither item could be linked to a “business purpose,” according to the auditors’ January 1997 report.

Litvack testified this week that he made the final determination that Ovitz couldn’t be fired without his severance. He indicated Thursday that although the auditors’ report was delivered after he had concluded there were no grounds to fire Ovitz for cause, such gifts were common in Hollywood and wouldn’t have changed his analysis.

“A $325 gift to a top talent like Dustin Hoffman? I’d have no problem with that,” Litvack said.

Seth Rigrodsky, a lawyer for Disney investors, argued that the auditors’ report showed that Litvack and other Disney directors and executives were “asleep at the switch” when it came to monitoring Ovitz’s actions.