A Delaware judge handed Walt Disney Co. a clean victory in its fight with a shareholder group over the hiring and firing of ex-president Michael Ovitz, but questioned some aspects of Disney directors' behavior.
Chancellor William Chandler dismissed arguments that the board should be held accountable for essentially standing by quietly when CEO Michael Eisner tapped Ovitz, who was at the time a close friend.
Ovitz’s hiring was a disaster and he was fired a year later, in December 1996, receiving a $140 million payout. "It is easy, of course, to fault a decision that ends in failure once hindsight makes the result of that decision plain to see,” Chandler wrote in his decision.
But he said that the directors did not breach their fiduciary duties to shareholders.