A former Disney executive has brought a $20 million whistleblower suit against the company, claiming she was terminated because she would not sign off on a fraudulent response to an IRS audit.
The plaintiff, Judy Denenholz, also charges that Disney general counsel Lou Meisinger nursed a grudge against her because years ago she had caught his law firm overbilling. She also charges that assistant general counsel Peter Nolan had sexually harassed her over several years.
Powerhouse litigator Patty Glaser, who has been hired by Disney, had several choice comments about the suit. “I have one word to say about this suit: shameful.”
According to the complaint, filed Wednesday in L.A. Superior Court by Dale Kinsella, Denenholz, who was senior vice president for worldwide anti-piracy at the Mouse House, became concerned in 1990 that the $800,000 in legal fees billed by Meisinger’s law firm to the seven studios to handle their anti-piracy work was excessive.
As a result, according to the complaint, Meisinger’s firm reduced the bill to the studios by $500,000, and the studios terminated the firm from the account.
While the studios may have stopped using Meisinger in connection with their anti-piracy litigations, he continued to represent several studios including Sony and Fox before he became general counsel at Disney.
According to the complaint, when Meisinger resurfaced at Disney, he repeatedly mentioned the overbilling incident.
After a series of run-ins with Meisinger, Denenholz was asked to approve a response to the IRS that vastly understated legal expenses attributable to copyright and trademark lawsuits.
The complaint stated Disney had improperly deducted all of its expenses in one year instead of amortizing them. It now wanted to lower the amount that it would owe taxes on. Denenholz was terminated after she refused to approve the letter to the IRS.
As for Nolan, Denenholz claims she was harassed by him when she joined Disney in 1981 and repeatedly thereafter. Despite years of bad blood between Denenholz and Nolan, Meisinger assigned her to work for Nolan in 1999.
According to Glaser, Denenholz was not fired; her contract was not renewed back in January 2000.
“These allegations came to light this year and they’ve been thoroughly investigated,” said Glaser. “They are totally without any foundation in fact or law and it’s particularly shameful that people with stellar reputations are being so improperly maligned.”