Disney bid to remove Katz lawyers nixed

Attorneys representing Jeffrey Katzenberg in his lawsuit against the Walt Disney Co. scored another victory Friday when lawyers for the conglom unsuccessfully argued to have the legal team for the former Disney Studios chairman removed from the case.

Disney lawyers sought to have Bert Fields and his team ousted by claiming that Helene Hahn, a former Disney business affairs exec now with DreamWorks, had improperly obtained a confidential and potentially damaging memo delineating Disney’s accounting procedures. She later turned the document over to attorneys representing Katzenberg.

Hahn, who obtained the memo from former Disney finance veep Bill Clark in May, after both had left the company, is assisting the lawyers representing Katzenberg in his $250 million lawsuit against the studio.

In a hearing Friday in L.A. Superior Court and following oral arguments from attorneys for both sides, Judge John Ouderkirk denied the defense motion to have Katzenberg’s counsel removed. He also stated he believed Hahn did nothing improper, as the defense had suggested, and placed the memo under court seal.

But the bringing of the unusual motion — Disney attorney Lou Meisinger said in court it was his first in 30 years of practice — further illustrates the high level of rancor that has accompanied this lawsuit.

The two sides have been arguing over seemingly small issues to such an extent that Ouderkirk assigned Lucas Campbell, a retired California Court of Appeal judge, to hear most discovery matters.

Earlier this month, attorneys for Katzenberg won their motion to get an advance look at transcripts and notes to be used in the writing of Walt Disney Co. chairman Michael Eisner’s autobiography.

During the hearing it was disclosed that Clark, who is now an exec veep at Universal Home Video, was part of the contingent of Disney execs who tried to work out a settlement with Katzenberg in 1994 shortly after his exit.

Clark prepared the memo — which Meisinger characterized in court as a “road map on how (Hahn) could win the case” for Katzenberg — at Hahn’s request. Because Hahn turned it over to lawyers representing Katzenberg, the entire legal team was tainted and should be disqualified, Meisinger asserted.

No proprietary info

But Fields said Clark prepared the memo as part of an effort to generate business with DreamWorks and noted that it was created after both Hahn and Clark had left Disney and did not involve proprietary information.

Fields further argued that for Katzenberg to replace his lawyers, who he said have spent more than 9,000 hours working on the yearlong case, would create an undue hardship for the plaintiff.

Katzenberg claims Disney owes him more than $250 million representing his 2% share of the studio’s profits earned during his tenure at the company.

Disney claims, in part, that because Katzenberg left the studio with two years remaining on his contract, he forfeited any monies due under performance bonus clauses.

A Nov. 18 trial date has been set.

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