Jeffrey Katzenberg’s attorney laid the blame for his client’s breach-of-contract lawsuit squarely at the feet of Disney CEO Michael Eisner on Monday during closing arguments.
Lawyer Bert Fields began by asserting that the only way the court could conclude that the ex-Disney exec forfeited a 2% termination bonus is if the judge believes Eisner’s testimony that Katzenberg “shrugged his shoulders and conceded” he wasn’t owed it.
Disney’s attorney Lou Meisinger later began his closing remarks by saying Fields’ case was so incredible that there were times he though he was “in the Twilight Zone or having an out-of-body experience.” Katzenberg never proved the key contention about Eisner’s particular “animus” toward his former associate, Meisinger said.
Katzenberg sued Disney, claiming the company owes him at least $250 million in bonuses for work he did as head of its film division before he quit in 1994. Disney contends Katzenberg forfeited the bonus because he resigned two years before the end of his six-year contract.
When Katzenberg’s contract was renegotiated in 1988, the 2% bonus provision was retained, Fields said, displaying notes written by the late Disney president Frank Wells in June 1988 that indicate he intended to pay Katzenberg the bonus.
Summarizing the contract negotiations that have preoccupied the court for the past two weeks, Fields focused on Eisner’s testimony that Wells kept him informed of all the details of the negotiations with Katzenberg.
Bonus lived on
Fields highlighted memo after memo showing that the 2% bonus would survive even if Katzenberg exercised an “out” clause in his contract and left in 1994 rather than 1996. He argued that these memos were inconsistent with Eisner’s statements, in which the Disney chairman said that “he put his foot down” and “wouldn’t let Wells make that deal.”
Punctuating his remarks with exclamations of “balderdash” and “hogwash,” Fields made clear that he was in no way trying to “impugn” Wells, as Eisner had accused him of doing from the witness stand.
“Wells didn’t disobey Eisner,” Fields said; Eisner simply “never put his foot down.”
Referring to the question of if and when Eisner told Wells that he would never approve a deal that allowed Katzenberg to keep his bonus, and whether his command was ever entered into a memo or documented officially, Fields referred to an exhibit that he titled “The Many Stories of Michael Eisner.”
Eisner’s claim that he told Wells not to include the bonus in the new contract “just makes no sense at all,” Fields concluded. “It’s just impossible.”
Fields also addressed Eisner’s testimony of last week, in which Eisner admitted he once referred to Katzenberg as “a little midget.” When pressed, Eisner issued what many saw as a thinly veiled threat to Fields and Katzenberg. Eisner told Fields then that the line of questioning was “ill-advised” and “not in your client’s best interest or mine, but particularly your client’s.”
“I must say,” Fields said Monday, “in 45 years of trying cases, it’s the first time a witness ever threatened me from the stand and told me I better not continue to ask questions like that. I’ve never had that happen before. Mr. Eisner was a singular witness.”
Meisinger disputed Fields’ comments about Eisner. “I heard a plea, not a threat, from Eisner not to take this case into personal areas.”
Meisinger also asserted that Fields’ entire “animus” argument served no real purpose but was a “titillating, media-driven” exercise.
Meisinger’s closing arguments are to conclude today, and it is expected that the trial will recess until retired L.A. Superior Court Judge Paul Breckenridge renders a decision on this portion of the case — determining the products to be used in the valuation phase which follows.