In re Walt Disney Company Derivative Litigation (Disney IV)
Delaware Court of Chancery
907 A.2d 693 (2005)
Relevant factsFree
Shareholders (plaintiffs) again challenged Disney's board (defendants) over its hiring of Michael Ovitz, whose unsatisfying performance led to a non-fault termination and a large severance payout. The shareholders argued Ovitz's employment contract was structured to give him a perverse incentive to leave early and trigger a non-fault termination rather than complete his term, amounting to waste; Ovitz countered that he had no such incentive because he could never be certain in advance whether or on what terms he'd actually be terminated.
IssueFree
Whether directors necessarily breach their fiduciary duties by failing to comply with the best practices of ideal corporate governance.
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