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Disney brass shunned me, Ovitz says

He defends $140 million severance deal in court

SHARE Disney brass shunned me, Ovitz says
Michael Ovitz, left, walks with a member of his legal team as he arrives at Chancery Court in Georgetown, Del. Shareholders are suing Disney over Ovitz's severance package.

Michael Ovitz, left, walks with a member of his legal team as he arrives at Chancery Court in Georgetown, Del. Shareholders are suing Disney over Ovitz’s severance package.

Chris Gardner, Associated Press

GEORGETOWN, Del. — Michael Ovitz, Walt Disney Co.'s former president, on Wednesday said the company's chief of operations, Sanford M. Litvack, took every chance to make him look "stupid" at the company and walked behind him with a "knife."

Ovitz was defending his $140 million severance package in a second day of testimony in a lawsuit brought by shareholders who claim Ovitz should have been fired for cause, with no severance.

Ovitz, the one-time top talent agent, said Litvack was unhappy he got the president's position at Disney, refused to report to him, and later was the first to tell him that Eisner wanted him out in the fall of 1996. Eventually, he found himself left out of meetings and shunned by other executives, "cut out like cancer," Ovitz said.

"I got pushed out the sixth-floor window," said Ovitz, referring to the location of Disney's corporate offices.

Ovitz is a defendant in the suit in Delaware's Court of Chancery along with Disney Chief Executive Michael Eisner and a number of Disney's current and former directors.

The shareholder lawsuit, which has been in progress for more than seven years, claims Disney's board failed in their fiscal responsibilities by not properly scrutinizing Ovitz's contract when he joined in 1995 and then granted him a non-fault termination that made him eligible for the severance package.

On Tuesday, Ovitz testified that Eisner refused time and time again to approve his efforts to grow Disney's music business, add creative talent or craft deals to improve its heft.

During Wednesday's testimony, Ovitz said he never went to Disney for the money and wanted to make the job work because of the potential reputational damage it could cause him if it didn't work.

"To me, it wasn't about the money; it was about the success of making it work," said Ovitz, who made $20 million to $25 million in his final year at Creative Artists Agency, the talent agency he founded.

Ovitz also defended his efforts to add a "guarantee" or protection to his contract if he was fired by Disney. He noted that his compensation package at Disney was less than he would have received in a proposed deal to join MCA/Universal as its chairman and CEO.

"I spent my entire life protecting the upside and the downside for other people," Ovitz said. "It's part of the whole negotiation. One doesn't negotiate for the good times; one negotiates for the contingencies."

Ovitz said he called off the talks after he became concerned about the autonomy he would have in making changes at the company. Eisner had previously advised him not to take the deal, Ovitz said.

An expert witness for the shareholders said last week that Ovitz could have been fired for cause from Disney because of allegedly habitual lying and profligate spending.

Ovitz's contract allowed him to be fired only for gross negligence or malfeasance. He said the company never told him that he had committed either, and said his understanding was that such activity would have to be "immoral" or "illegal."

The shareholders group has alleged that the renovation of Ovitz's office cost more than $2 million.

Ovitz said he became concerned about the cost of renovations after he found construction was being done on the office at night. Ovitz's lawyers said the renovations included offices on two floors at Disney's headquarters.

"I never approved the budget, I didn't ask for this office and I had no idea what it cost," Ovitz said.