Roy Disney and Stanley Gold are back.
The two former directors of the Walt Disney Co never much liked Robert Iger, Michael Eisner's choice as his successor, and now they are going after the company and members of the board of directors for choosing Iger as the next chief executive.
Disney and Gold filed a lawsuit on Monday asking that the results of this year's board election be voided. They contend Disney made false statements regarding the search for a new chief executive to replace Eisner.
Disney, the nephew of Walt Disney, and Gold, his financial adviser, led an investor revolt more than a year ago to oust Eisner. In a statement, the two said the board's announcement last September that it would conduct an open and thorough search to replace Eisner induced them not to offer an alternative slate of directors at the most recent annual meeting in February.
Several weeks after the February meeting, the board announced that Eisner would be succeeded this fall by Iger, Disney's president.
"In short, the defendants did not have `open minds,' and Iger was their choice," the complaint said.
Disney and Gold are asking in the lawsuit filed in Delaware Chancery Court that another board election be held after the board fully discloses the details of the search, including the number of external candidates interviewed and how serious those talks were.
Disney executives declined to discuss the lawsuit. In a statement, a Disney spokeswoman said: "The record of strong performance of the Walt Disney Co speaks for itself, and this frivolous and baseless lawsuit reflects the mean-spirited, self-serving interest of two ex-board members."
George Mitchell, the former US senator from Maine and Disney's chairman, has said in the past that the board spoke to potential candidates, though he has declined to say who, how many and what that process entailed. Among the candidates was Meg Whitman, the chief executive of eBay, who said she had interviewed with the board while Eisner was present.
In other cases, potential candidates did not pursue interviews after an initial meeting with a board member, with some of those concerned that Eisner would be present, Disney executives said. Others had long-term contracts that would be expensive for Disney to buy out.
It is unclear what kind of reception Disney and Gold will get in court. But stock performance may well be the key to how much support the duo get on Wall Street with their latest salvo.
Disney's stock price has nearly doubled since Disney and Gold began their initial quest to unseat management almost three years ago. Disney's earnings have improved in recent quarters. And several investors have expressed optimism about the firm's prospects under Iger.
"The only way they gain traction is if Disney has soft numbers," said Patrick McGurn, special counsel at Institutional Shareholder Services.
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