A federal judge dismissed a shareholder lawsuit against Walt Disney Co. on Sept. 9, 2003 that claimed the company had defrauded investors by hiding potential damages at stake in a separate legal dispute over WINNIE THE POOH merchandise, REUTERS reported.
Shareholders seeking class action status claimed that Disney failed until May 2002 to disclose in regulatory filings that hundreds of millions of dollars or more could be at stake in a lawsuit by Stephen Slesinger Inc., which holds U.S. merchandising rights to the Pooh franchise and accuses Disney of short-changing it on royalties.
Judge Mariana Pfaelzer of the U.S. District Court for the Central District of California gave shareholders 30 days to amend their complaint if they want a second legal shot after she repeatedly challenged shareholders' lawyer Ira Press during oral arguments.
Disney attorney John Spiegel suggested there was no evidence of a cover-up. Spiegel said a March 2002 ruling in the Slesinger case established that Disney could be liable for hundreds of millions of dollars and led Disney to mention the case in its May quarterly filing with the Securities and Exchange Commission.
Press argued that Disney acknowledged the potential magnitude of damages in the May securities filing after court files were unsealed earlier that year.
Bill Desowitz, former editor of VFXWorld, is currently the Crafts Editor of IndieWire.
