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Disney and Katzenberg settle suit

The Walt Disney Co. and former Disney head executive Jeffrey Katzenberg have settled a lawsuit for undisclosed terms, thus ending a months long public trial. Since it began in April, the trial has produced many headlines as Katzenberg sought to secure from Disney two percent of future income derived from all movies, TV shows and merchandise made while he was studio boss from 1984 to 1994. Katzenberg estimated his share of the bonus, which was part of his employment contract with Disney, to be anywhere between $382 million and $580 million in court filings. Disney put the figure closer to $140 million. Katzenberg, who already had been paid $91.3 million in bonus money, said he was pleased to resolve the matter, but neither he nor Disney have made the final settlement figure available to the public. Along with former Disney President Frank Wells, Eisner and Katzenberg were largely credited with turning around Disney's animated films and other operations in the mid-1980s. Disney grew from what was considered a moribund company in Hollywood when the three men took over in 1984, to one of the world's largest entertainment companies with theme parks, a movie studio, TV production and cable TV operations by the time Katzenberg left 10 years later. During the trial, however, Disney tried to paint Katzenberg as a poorly performing executive whose live-action movies lost around $231 million during his tenure. Katzenberg's legal team, led by noted entertainment attorney Bert Fields, took the position that Katzenberg's movies may have lost money early, but would be become profitable through ancillary markets such as home video, toys, and satellite TV in the future.

Fields argued Disney denied Katzenberg the bonus only because of the "personal animus" of Eisner, and at one point charged Eisner with labeling Katzenberg a "little midget" to help prove his case. Comments like that, and others in which Eisner compared himself to a cheerleader and Katzenberg to a pom-pom, had other Hollywood executives groaning about the negative headlines being generated around the world from the trial. By mid-May retired Judge Paul Breckenridge, acting as a referee in the case, ruled Disney did owe Katzenberg the bonus, and a new phase of the trial was started to calculate exactly how much the bonus was worth. The second phase ended with Wednesday's announced settlement.