Investors Request Delay in Ovitz Suit

Walt Disney Co. investors seeking the return of $109.3 million in severance payments to former company President Michael Ovitz asked a judge Thursday to delay the trial of their claims so they could review recently discovered papers.

Lawyers for Disney investors contend in a letter that attorneys for Ovitz and former directors of the Burbank-based media giant are seeking to use the papers in the trial -- scheduled for Oct. 18 -- even after a judge ruled them inadmissible.

The shareholders want until February to evaluate the papers, which relate to Ovitz’s tenure at Disney.

Investors “reluctantly request that the trial be adjourned for a reasonable interval to permit” a full review of the documents, Steven Schulman, a lawyer for the shareholders, wrote in the letter to Delaware Chancery Court Judge William B. Chandler III. The document was filed in court records.

Disney investors contend that Ovitz, current Chief Executive Michael Eisner and a group of Disney directors should be held financially liable for the $109.3-million severance package.

Shareholders say the severance was a waste of company funds because of Ovitz’s poor performance at Disney. Ovitz stepped down in December 1996 as Eisner’s second in command.

A spokeswoman for Ovitz was not available to comment on the investors’ request for a delay. Disney spokesman John Spelich said he could not comment.

Disney executives uncovered the documents, which include memos involving Ovitz’s work while at Disney, in September and turned them over to investors’ lawyers, according to court papers.

Shareholders’ attorneys complained to Chandler, saying they didn’t have enough time before trial to properly evaluate the documents’ relevance. In a Sept. 21 ruling, the judge said he would “preclude the use of the documents at trial,” according to court records.

Lawyers for Ovitz and former Disney directors Roy E. Disney and Stanley P. Gold then asked Chandler to allow them to use the documents to prepare for trial. That prompted Schulman’s call to delay the case.

Lynn Goldberg, an assistant to A. Gilchrist Sparks III, a lawyer representing Gold and Disney, said Sparks wouldn’t comment.

“We have become increasingly concerned that the defendants are trying to find a backdoor way to use these documents, which they produced late, at trial,” Schulman said.

“We would be seriously prejudiced if the first time we are confronted with these documents is in the testimony of their witnesses at trial,” he added.

Shares of Disney, which have risen 15% over the last 12 months, rose 41 cents to $24.75 on the New York Stock Exchange.