Yesterday Walt Disney CEO Michael Eisner was speaking about his interview with Larry King in September 1996, during which he denied any tensions in Disney boardroom giving praises to Disney’s President Michael Ovitz, while in fact persuading other Disney directors to fire Ovitz. He admitted lying on a TV show when he was presented a fragment of the interview.

 

According to Eisner, he felt the need to cover up the conflict that was “certainly a dumb thing to do". "It was unfortunate and stupid and I wish we hadn't done it," he said in court.

 

On TV, he declared he would have hired Ovitz if he was to make the decision once again.

 

CEO’s hopes that Ovitz may be hired by Sony cancelling Disney obligation to pay the severance package of $140 million were not fulfiled. The fact that Ovitz walked away with that amount after spending only 14 months on the job angered Disney shareholders who filed a suit against the board for failing in its fiduciary duties.

 

They claim that the decision to hire Ovitz was a mistake.The shareholder lawsuit is based on the claim the board did not properly scrutinize Ovitz's employment contract when he was hired. Nonfault termination of his contract entitled him to the multi-million severance package. The verdict of the court will depend on what amount and timing of information the board of directors had about Ovitz's employment contract.