GEORGETOWN, United States (AFP) - Walt Disney Company chief Michael Eisner has defended in court a controversial decision to hire a friend, Hollywood baron Michael Ovitz, as president of the entertainment giant and then pay him off with a 140 million dollar package.
Eisner is appearing in court this week as the Disney board fends off a a multi-million-dollar lawsuit filed by company shareholders.
Eisner on Monday justified his decision to hire Ovitz as president in 1995, saying the expensive salary was worth the cost because he would help Disney integrate its newly acquired ABC television network.
"If I could get a guy who could make a 19-billion-dollar deal work, it was worth it," he said.
Eisner's testimony is expected to be pivotal in the lawsuit.
Shareholders accuse the Disney chief, board and Ovitz of wasting corporate assets by abdicating their duty to the corporation to be fully informed about Ovitz's abilities and the terms of his contract.
The lawsuit is a derivative action filed on behalf of the Disney company and seeks the return to company coffers of the 140-million-dollar severance package paid to Ovitz, 60 million dollars in interest, plus legal fees and costs. Ovitz worked for Disney for 15 months.
On the witness stand, Eisner qualified his relationship with Ovitz as that of a good friend but not as a "best friend," as Ovitz had declared.
"Michael had a lot of 'best friends'," said Eisner, who has accused Ovitz of lying to him.
Eisner is expected to be testifying the rest of this week.
The case began on October 20 in the Delaware Chancery Court and is now projected to run into mid-December. The lawsuit was filed in Delaware because Disney is incorporated there, as are nearly 60 percent of the Fortune 500 companies.
11/16/2004 - 16:21 GMT - AFP