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Business Organizations Keyed to Smith
In re Walt Disney Co. Derivative Litigation (Disney V)
Citation:
906 A.2d 27 (2006).Facts
Ovitz was hired by Disney, who adopted an employment agreement which contained a non-fault termination provision that included a severance package should Ovitz leave the corporation. The severance package included annual pay, bonus pay, a termination fee, and payment on millions of shares he owned as part of his employment agreement. Just over a year into his term of employment with the corporation, Ovitz was terminated on a non-fault basis. His severance package amounted to upwards of $130 million. Disney shareholders brought suit against the corporation’s board of directors, alleging a breach of its fiduciary duty in approving the no-fault termination provision in Ovitz’s contract.
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