Ovitz Details Pain of Split With Eisner in Emotional Testimony

When Walt Disney Co. Chief Executive Michael Eisner fired his longtime buddy Michael Ovitz as second-in-command, he offered a prediction about their future.

“We have been doing business together while being friends for many years,” Eisner said that day in the winter of 1996. “And I know that both our personal and professional relationships will continue.”

On Wednesday, Ovitz took the witness stand here for a second day of testimony in a Disney shareholder suit and left little doubt about just how wrong Eisner was.

In an extraordinary five-minute soliloquy, Ovitz spoke of a betrayal by Eisner that he said left him shattered and bewildered.

“I was best friends with this guy and his family,” said Ovitz, who was Hollywood’s most powerful agent before becoming Disney’s president. “I loved this guy like a brother. We spent holidays together. I was at the funeral of one of his parents, he was at the birth of my first son. We were together Thanksgiving, Christmas. I was very close to his children. He was close to mine. My wife was his wife’s best friend....

“There was very little, if not anything, that we didn’t share with each other as a family. We lived together basically.

“What to this day, and until the day I die, I will never be able to understand ... how I spend 25 years with a man and his family, and within 60 days of taking this position he decides that I’m a number of things that he had 25 years to figure out if I was or I wasn’t.”

Ovitz’s catharsis on the stand, which came at the end of friendly questioning by his own lawyer, seemed to have less to do with the merits of the case -- whether Ovitz deserved a big severance payout -- than with settling a score with Eisner. Taking care of that bit of personal business has been as much a goal for Ovitz as fending off shareholder accusations about his performance at Disney and restoring his reputation as a top-flight executive.

As Ovitz talked, spectators sat riveted in the cramped courtroom, watching the drama unfold.

“Now I’m not the smartest guy in the world,” Ovitz continued, “and I’m not the dumbest guy in the world. And I’m a fantastic loyal friend, and I am a horrible enemy. But I was this guy’s friend. I’m not sitting here trying to play victim because I don’t play that role very well....

“But it all went downhill, and I don’t understand how. And I never will understand how a guy that lived with me, and a guy and his wife who lived with my wife and I, could be with me so much, and then [contend] that I’m a liar, that I have a veracity issue, that I’m a psychopath.

“I can’t figure it out. I can’t figure it out because I know he wanted to do good for the company.... I said, ‘Just train me and I’ll cover your back.’ I said, ‘All you got to do is cover mine.’ It never happened.”

Ovitz’s voice wavered.

“So from my standpoint, I live to this day with a 25-year hole in my life and seven or eight of the worst years I’ve ever had in business, or personally, or anything else. Because of this situation where I went into a partnership with a man I was already a life partner with in an odd way, as a friend, and expected it to be a home run. And it was a nine-inning ballgame in about three weeks.... And I live with that every day, and it’s not going to go away. That’s why I wanted this trial to occur, not occur, but to finally get done.”

Eisner’s attorney, Gary Naftalis, declined to respond to Ovitz’s testimony about his relationship with Eisner, saying it was “not relevant to the legal issues being tried in the courtroom.” Eisner is expected to testify in the days ahead.

Shareholders have alleged that Ovitz was negligent in his job and should have been denied his severance when Eisner ousted him after just 15 months. The plaintiffs have put the value of the package at $140 million and are seeking $200 million, including interest, to be returned to Disney’s treasury.

The defendants, who include former and current Disney directors, say they acted appropriately and had no grounds to deny Ovitz his severance because he did not commit malfeasance or gross negligence.

Despite their bitter parting, both Eisner and Ovitz are on the same side of the case as co-defendants. Both share a mutual interest in demonstrating that neither did anything wrong -- that things just didn’t work out -- and that Ovitz was contractually entitled to his payout.

The dance is a delicate one. Although Ovitz had plenty of harsh words about Eisner as a failed friend, he praised Eisner in his role as Disney’s CEO.

“I believe that deep down Michael always functioned with shareholders in mind,” Ovitz said, adding that he certainly would have sued the company had it withheld the severance he negotiated under his employment contract.

Ovitz reserved some of his harshest words on Wednesday for Disney’s former chief lawyer, Sanford Litvack. In a videotaped deposition played in the courtroom last week, Litvack said of Ovitz: “I walked behind him with a shovel” to clean up his messes.

Ovitz fired back Wednesday. “He did walk behind me. But it wasn’t a shovel he was carrying. It was a knife.”

He said Litvack came to his office in fall of 1996 and told him that Eisner was pressing for him to leave. Ovitz said he replied that if Eisner wanted him fired, “He should come in and do it to my face.”

“I didn’t want to leave,” Ovitz said. “They had to drive me out of there.”

Neither Litvack nor his attorney would comment.

By late 1996, after an ill-fated effort by Eisner to get Ovitz to take a job at Sony Corp., Ovitz said he was being barred from meetings at Disney.

“I was cut out like cancer,” he said. “I guess you could say I got pushed out the sixth-floor window.”

Times staff writer Meg James contributed to this report.