The case is about a lawsuit against The Walt Disney Company's Old and New Board of Directors for approving an Employment Agreement for Michael S. Ovitz, which the plaintiffs argue was extravagant and wasteful. The plaintiffs claim that the Board failed to recognize that the contract provided Ovitz with an incentive to leave the company as soon as possible, which would allow him to earn more than if he fulfilled his contract. The court analyzed whether there was a reasonable doubt that the directors were disinterested and independent, and whether the challenged transaction was a valid exercise of business judgment. The court found that the plaintiffs failed to provide well-pleaded facts to support their claim, as their complaint did not meet the specific pleading requirements for derivative suits and fraud cases. The court dismissed the plaintiffs' claims for breach of fiduciary duty and waste, but allowed them to file an amended complaint in accordance with the court's rulings.
Brehm v. Eisner (2000)
Delaware Supreme Court
746 A.2d 244
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