http://www.latimes.com/news/opinion/editorials/la-ed-disney1dec01,1,380864.story?coll=la-news-comment-editorials

QuikQuote: In the real world, what rivets readers and viewers is the dark side of Disney: the dish, the character assassination, the spin that puts Karl Rove to shame. Eisner walked a tightrope during testimony as he scrambled to defend both his hiring of Ovitz and the controversial decision just months later to let Ovitz walk away with what plaintiffs allege was a $140-million severance package, paid by shareholders. Eisner described Ovitz as morphing from the hardest-working man in show biz to a walking disaster area. He testified about a failed attempt to engineer a baseball-like trade that would have sent Ovitz to a competitor. Yet Eisner ultimately had to eat his own harshest words. He dismissed as hyperbole his own lengthy memo chronicling Ovitz's failings and said his descriptions of Ovitz as a psychopath and liar were just overstatements.
Decades ago, Orson Welles wrote of Hollywood that "there must always be a strong element of the absurd in the operation of a dream factory." The absurd is evident in the gossipy exaggeration that has been the hallmark of testimony in the Disney trial. The good news is that this trial may spare future shareholders from corporate boards that treat $140 million as pocket change.

I never understood why Ovitz was rationally considered for the job. He was on the dark side (agents).
That said, it was a pretty one-sided contract. How it was ok'd is beyond me as well, but I see Ovitz's rationale: he was walking away from an extremely lucrative business.
So, he wasn't right for the job. This makes it Eisner's fault and the Board's fault for not doing due diligence, i.e., standing up to Eisner's idea.
He was fired and not for cause. He wasn't put into a position where he could do damage to the company.
I don't think this case is winnable. I don't think shareholders have the right to question such business decisions. Otherwise, why isn't there a shareholder suit about the decision to build DCA? That's a worse decision than hiring and firing Ovitz, IMO.

Also, do note that shareholders (and Ovitz) received a good return the day Ovitz was fired, IIRC.

Ovitz was a rainmaker, much as Eisner was when he first started in Disney. Had Hollywood contacts. Knew people. Knew stars. Knew how the city and the entertainment industry worked. Qualifies under "Seemed like a good idea at the time, but...." (Rainmaker: Someone who brings increased and new business to a company.)

In hindsight I wonder how much explaining anyone at Disney did to Ovitz about the exact nature of the job he was to do there before he was hired and before the contracts were drawn. If the job Ovitz was to do at Disney was based on "He'll be a general rainmaker" without exact parameters and definitions, then both Ovitz and Eisner were sadly naive and 'way too "assuming".

Obviously, the life Ovitz knew was one of schmoozing, spending money to make money, making contacts through lavish entertaining and gift giving and having an impressive office and corporate life-style for the purposes of impressing prospective clients and to show clout. Ovitz knew image-making and image maintaining and how to get noticed. It's just perhaps Disney didn't know how to get the man to transition to another way of life within the entertainment industry and Disney assumed too much that Ovitz would "know" how to make that logical transition and switching of gears.

Or as the saying goes "What we have here is a failure to communicate."

If Ovitz, in hindsight, could have see in contract form that he was not to schmooze, had to ride in corporate busses at company events and not corporate limos, was not to grease palms or entertain or give gifts or decorate his office, was not to have certain staff supervisory oversight, etc., if he'd known that before going in and before signing contracts... I wonder if he would have said "Hey, sorry, this is not a life I know or am accustomed to nor is it a professional life I want. I want instead to back out of this now before it's too late." if Disney would have let him, or even if Ovitz would still have gone with Disney from Creative Artists anyway.

People can get into all kinds of trouble with "Seemed like a good idea at the time, but..." and not thoroughly understanding people before people are either hired or important contracts among people are signed.

I agree Disney's made a lot of short-sighted decisions, including how Disney's California Adventure turned out. "Short-sightedness" in fact seems to be a trait in Disney under Eisner since 1994-1995 or so.

But after 9-nearly 10 years of this litigation, I don't know if the shareholders' should prevail or not and Ovitz' money should be returned to Disney or not. Sometimes in the School of Hard Knocks there can be no refunds, and in Disney's case the Ovitz hiring-severance was merely an early sign of other short-sighted decisions that were to come 1995-2004. We can't get refunds for all the short-sighted decisions that were made in those years by Disney. Again in hindsight, shareholders' brought this lawsuit years ago because the "short-sightedness" of Disney in hiring and severing Ovitz seemed so unconscionable, but singular, at the time. Since then, wow, it's like one of these kinds of mistakes goes on annually or a couple of times a year at Disney. But still, stockholders' spoke loudly at the 2004 Annual Shareholders' Meeting of Disney and back when this suit was brought stockholders' wanted a big voice, too. Coincidental both come to decision stages in the same year.

Basically, I think stockholders just want to vent, flex their muscles, saber-rattle, and make a point about corporate governance. It was never anticipated when this suit was first filed that Enron, WorldCom, etc. would have happened, or that the drama involving SaveDisney.com and Roy Disney and Stanley Gold would have happened. You can't always get refunds for School of Hard Knocks mistakes, but at least shareholders' can make a high-profile point about corporate governance. And in this suit, with all the other corporate governance and malfeasance that's gone on in corporations, a lot of people are paying attention to what the outcome will be.