Disney defeated in bonus case huge in bonus case

THE WALT Disney Company suffered a signal legal defeat yesterday when a Los Angeles judge ruled that Jeffrey Katzenberg, the former head of the Disney film unit and producer of such hits as The Lion King, did not lose his right to a multi-million dollar bonus when he left the company in 1994 without exercising his option of a two-year extension of his contract. Disney had claimed that in leaving when he did, Mr Katzenberg had forfeited the bonus, which could be worth as much as $250m.

The written ruling, released late yesterday, paves the way for the lawsuit to go into its second stage, when the amount and composition of the claim will be considered. Mr Katzenberg's contract contained a clause entitling him to 2 per cent of income from films, television shows and other products sold during his 10 years at the studio.

Mr Katzenberg, whose claim against Disney has grown into a bitter personal duel between himself and the chairman of Disney, Michael Eisner, was quoted as saying that he was "thrilled, thrilled, thrilled" by the ruling. There was no immediate comment from Disney. Mr Katzenberg's lawyers had claimed that it was only Mr Eisner's personal hostility towards their client that was preventing payment of the bonus.