Judge Bars Testimony in Suit Against Disney

In a victory for Walt Disney Co., a Delaware judge barred a corporate governance expert from testifying that company directors didn’t properly oversee the hiring and firing of former President Michael Ovitz.

Delaware Chancery Judge William B. Chandler III ruled that Duke University law professor Deborah A. DeMott’s report, which concludes that directors were asleep at the switch when they approved Ovitz’s compensation, was legally flawed. Disney investors suing to recoup Ovitz’s $140-million severance had hired DeMott as a corporate-law expert.

DeMott found that Disney’s directors violated their duties to shareholders by not supervising Ovitz’s employment and ouster. The former agent stepped down as Disney’s second in command in 1996 after a rocky 15-month tenure.

DeMott’s report also criticized Chief Executive Michael Eisner for not properly consulting the board before hiring Ovitz.