Small Business Reading Room

Wednesday, August 10, 2005

A Decision for Disney

The trials and tribulations of The Walt Disney Co. have been discussed previously in our blog. Think back to Alan's August 27, 2003 blog when he first discussed the limitations of directors' liabilities. Now, after years of litigation and a lengthy trial in Georgetown, Delaware, there is finally a decision for Disney's directors.

The decision is not a stretch for those familiar with Delaware corporate law. As quoted from an article on Delawareonline.com,

In 1986, Delaware lawmakers passed a law to protect directors by allowing
companies -- through provisions in their charters -- to limit and, in some
cases, eliminate a director's financial liability for certain mistakes.

Only in cases of disloyalty, bad faith or intentional misconduct can
directors be held liable under the law.

In his 174-page opinion, Chancellor William B. Chandler III ruled that the directors did not act in bad faith when they awarded Michael Ovitz a $140 million severance package after serving as President for only one year.

posted by Anonymous at 2:38 PM - permalink 0 comments

Small Business Reading Room

A Decision for Disney

0 Comments: