New Testimony on Ovitz Ordered

Former Walt Disney Co. board members Stanley P. Gold and Roy E. Disney have been ordered to give new depositions in a shareholder lawsuit against the company over the brief tenure of former company President Michael Ovitz.

A Delaware judge gave the law firm representing shareholders in the suit permission to take new depositions from the two because of perceived inconsistencies between their testimony before they resigned and their subsquent criticism of the Disney board.

The two were members of the board in 1995 when they approved the hiring of former Hollywood agent Ovitz as Disney’s president. They also were on the board little more than a year later when Ovitz left with a severance package that included a $38.9-million cash payout and stock options valued at more than $100 million.

Gold gave a second deposition last week, and Disney is set to testify again this week, according to an attorney for shareholders in the lawsuit.

The complaint claims that the board -- including Gold and Disney -- was negligent in not consulting an expert before approving Ovitz’s employment contract and that then-Chairman Michael Eisner allowed Ovitz, a close friend, to collect a severance payment to avoid personal embarrassment.

Roy Disney gave a deposition in the case last June, and Gold testified last October. Both said they had fully supported Eisner’s courting of Ovitz. They also said they had supported the move to terminate Ovitz on a no-fault basis.

After their resignations last fall, Gold and Roy Disney embarked on a campaign to oust Eisner and attacked the Disney board for being Eisner’s “rubber stamp” during a period that included Ovitz’s brief stint as company president.

In one document, posted on their “SaveDisney” website, Michael McConnell, managing director of Shamrock Holdings, a private company that manages Roy Disney’s investments, said the hiring of Ovitz “foreshadowed the current ‘poor governance’ culture and [Eisner’s] disconnect with the people for whom he works: the shareholders.”

Gold is the head of Shamrock.

Papers filed in connection with the shareholder lawsuit were also cited by state pension funds as one reason to withhold their votes for Eisner’s reelection to the board in March.

The public campaign waged by Gold and Disney prompted lawyers in the shareholder lawsuit to ask for permission to take new testimony from the two.

A trial in the lawsuit is scheduled to begin Oct. 18.