GEORGETOWN, Del. — An emotional Michael Ovitz testified today about his frustrations in trying to penetrate a phalanx of executives shielding Walt Disney Co. Chief Executive Michael Eisner, describing his brief tenure as the company's second in command as doomed by people who were jealous of his hiring.
Ovitz also denied he reaped a financial windfall or spent lavishly during the 15 months he worked at Disney in 1995 and 1996. Ovitz said that a $2-million office renovation he is blamed for wasn't his idea, and that he raised concerns about its cost when he saw people working at night.
Ovitz spoke during his second day of testimony in a lawsuit filed by lawyers representing Disney shareholders alleging that company directors rubber-stamped Ovitz's hiring and firing by Eisner. Lawyers value the stock options and cash severance package that Ovitz received at $140 million and are seeking to recoup $200 million in payments and interest for the company. The actual amount Ovitz reaped was $109 million.
In his testimony today, Ovitz said Disney executives were unhelpful on even the most minor requests, such as answering questions about computer purchases and policies on expense reimbursements.
Ovitz said his inability to enter Eisner's inner circle was especially puzzling given the close relationship between the two men, which included spending Thanksgivings together with their families.
"When outside the business, everything was great," Ovitz said. "But when we were in the building and he was surrounded by his group, he was just a different person."
Ovitz reserved his harshest words for Sanford Litvack, who as Disney's chief lawyer in the 1990s acted as something of Eisner's consigliere. In a videotaped deposition played last week, Litvack said of Ovitz that "I walked behind him with a shovel" to clean up the messes Ovitz created.
"He did walk behind me, but it wasn't a shovel he was carrying," Ovitz testified. "It was a knife. Every chance he got to make me look stupid he went out of his way to do it."
Ovitz also testified that Litvack told him in 1996 that Eisner wanted him to quit. Ovitz testified that he told Litvack that if that was the case, Eisner should do it in person.
Litvack referred questions to his lawyer, who could not be reached.
Ovitz said that money did not motivate him in taking the job, noting that he and his partners at CAA sold the agency when he left for $180 million paid over four years, with Ovitz getting 55% for his stake. He also noted that the $1 million in salary he earned at Disney paled in comparison to what he made as an agent.
"I gave up $20 million a year to take that $1 million," Ovitz said. "Money was not what motivated me. It was the success of the deal, the fraternal environment."
Ovitz's lawyers are trying to establish that Ovitz did nothing that came close to gross negligence or malfeasance that would have justified denying him his full severance package when he was fired. In doing so, they are seeking to counter accusations by plaintiff witnesses who allege that Ovitz was overpaid and was a profligate spender, which would have justified denying him the money.
Ovitz has been using the testimony as an opportunity to present his side of the events that led to his spectacular downfall from the most powerful executive in Hollywood when he ran Creative Artists Agency to something of an industry pariah.
He told reporters at the courthouse that he had been looking forward to the trial "since the day I got fired." Later, he told the court, "I wanted to get into a position where I could tell my side of the story."