The shareholder litigation challenging Disney’s $140 million 1996 severance payout to Michael Ovitz has moved into the discovery process.

The law offices of Milberg, Weiss, Bershad, Hynes & Lerach, lead counsel for the plaintiffs, announced Thursday that it had received a favorable ruling from the Delaware Court of Chancery rejecting the defendants’ motion to dismiss. The discovery process will now continue until April 30, after which the court will schedule briefing on the issues.

Plaintiffs claim that Disney’s board was derelict in its responsibilities when it approved CEO Michael Eisner’s hiring of Ovitz in 1995 only to permit Ovitz’s exit from the company 14 months later with full severance in hand.