Sandy Brown
Disney (DIS Quote - Cramer on DIS - Stock Picks) dissidents Roy Disney and Stanley Gold will have their day in court.
A Delaware court Monday allowed a lawsuit filed by the ex-directors to go forward, rejecting a motion by the media giant to have the complaint dismissed. The suit aims to void Disney's board election. The lawsuit, filed in early May, alleges that the board made false statements to shareholders about its CEO search to secure votes for the incumbent board at the company's annual meeting. The lawsuit says the board took the action to prevent Disney and Gold from offering an alternate slate of directors at the meeting. The pair is also suing CEO-elect Robert Iger, departing chief Michael Eisner and other board members for fraud and breach of disclosure in the matter. In a statement on savedisney.com, the pair said they were pleased with the ruling, which sets an expedited trial date in August. The complaint suggests that the fix was in from the start, saying that "the board interviewed only one external candidate, delayed notifying her of any decision and did little to dissuade her from withdrawing her candidacy." That's a reference to eBay CEO Meg Whitman, who was briefly a candidate for the job. Whitman later joined the Dreamworks Animation (DWA Quote - Cramer on DWA - Stock Picks) board at the behest of chief Jeffrey Katzenberg. The suit also criticizes Eisner's presence at interview sessions for external candidates and the board's apparent failure to look into the Fox Family Channel acquisition. The suit claims that information was withheld from the board regarding the writedown of certain Fox Family assets. When the lawsuit was filed last month, Disney issued a one-sentence statement brushing off the allegations. "The record of strong performance of The Walt Disney Company speaks for itself, and this frivolous and baseless lawsuit reflects the mean-spirited, self-serving interest of two ex-board members," Disney said. On Tuesday, Disney rose 41 cents to $27.49.
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