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Former Disney directors sue Disney board for fraud in CEO search

[JURIST] Former Walt Disney Company directors Roy Disney and Stanley Gold filed suit against current Disney directors [press release; SaveDisney.com advocacy website] including former Disney CEO Michael Eisner Monday for fraud and breach of duty in connection with the public disclosure of information concerning the election of a new CEO for the entertainment giant while searching for Eisner's replacement after his announced retirement [JURIST report]. Disney and Gold had previously announced that as shareholders they would withhold their votes on a new CEO [press release] until the "Disney Board adequately addressed the issues that resulted in the unprecedented vote of "No Confidence" [press release] at last year's annual meeting." The current suit alleges that the Disney Board disclosed false information about the CEO search to convince Disney shareholders to vote for the incumbent Board, while ignoring an alternate slate of directors introduced by Disney and Gold. The suit, filed in the Delaware Court of Chancery, asks that the 2005 Board elections [Disney press release] be declared null and void and that new elections be held. Bloomberg has more.

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Paper Chase is JURIST's real-time legal news service, powered by a team of 30 law student reporters and editors led by law professor Bernard Hibbitts at the University of Pittsburgh School of Law. As an educational service, Paper Chase is dedicated to presenting important legal news and materials rapidly, objectively and intelligibly in an accessible format.

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