Magazine article Newsweek

Countdown to the Courtroom: A Glimpse of Strategy in the Katzenberg-Disney Lawsuit

Magazine article Newsweek

Countdown to the Courtroom: A Glimpse of Strategy in the Katzenberg-Disney Lawsuit

Article excerpt

A glimpse of strategy in the Katzenberg-Disney lawsuit

JEFFREY KATZENBERG LEFT THE Walt Disney Co. in 1994 in a blaze of fireworks, his falling-out with Disney chairman Michael Eisner a spectacular public display of private emotions. So it's no surprise that Hollywood folks are pulling up their lawn chairs, hoping to see more pyrotechnics as these two men go after each other over their last bit of unfinished business: money.

Katzenberg asserts in a lawsuit that Disney owes him $250 million in bonuses. Disney counters that the former Disney Studios chairman lost his right to more bonuses by leaving the company when he did. In his 1984 and 1988 contracts, Katzenberg apparently was granted 2 percent of the studio's adjusted operating income from all movies and TV shows he put into production. The contract was signed before the animated films started to hit with "The Little Mermaid" in 1989, The trial is set for Nov. 18.

Spectators will want a front row seat for this show. Start with the mysterious "Project Snowball." In an Eisner deposition, NEWSWEEK has learned, Katzenberg's attorney asks if he knows about it. "Never heard the word," replies Eisner. "Were you aware that there was a secret project going on under [late Disney president Frank] Wells's aegis stimulated by the fact that Mr. Katzenberg's two percent in 1990 started to run at far higher levels than previously anticipated?" asks Katzenberg's attorney. Eisner replies, "No, bemuse I would say that I doubt whether a project was put into work stimulated by the fact that his two percent was higher than anticipated. …

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