Roy E. Disney and Stanley P. Gold today said that they are pleased with the Delaware Chancery Court's ruling allowing their lawsuit to go forward against the Walt Disney Company and certain members of the Board of Directors of the Company with an expedited trial date of August 2005.
The lawsuit, which was filed on May 9, 2005, alleges that the Walt Disney Company Board made false statements to the Company's shareholders about its CEO search in order to induce shareholders to vote for the incumbent Board at the 2005 annual meeting and to induce Messrs. Disney and Gold not to run an alternate slate of directors at the meeting.
The opinion's not up on the Chancery Court's website yet, so I can't comment on Chandler's analysis. This excerpt quoted by the news, however, raises a key question:
... plaintiffs could be entitled to the relief they seek because the board's statements materially misled plaintiffs with respect to the board's intent to conduct a bona fide executive search process.
As I argued back in May, I don't see how Disney and Gold can plausibly argue either that they were misled or that they reasonably relied on the board's representations. Has Chandler tossed the reliance requirement?
