A New Lawsuit against Disney, Chapek, and Iger

Storms are brewing again over Disney Parks, and now they are brewing in court again, too. Here is the information on the latest legal tangle.

Investors vs. Disney

It seems like both hurricane season and lawsuit season are upon us. Another legal storm is brewing for Disney.

On August 23, 2023, Stourbridge Investments filed a derivative lawsuit on behalf of The Walt Disney Company. This type of lawsuit occurs when a group of shareholders files a lawsuit on behalf of a company to protect the company from harm caused by misconduct within the company itself. Essentially, a company’s minority owners/shareholders have legal recourse if a company’s executives, etc. engage in conduct that breaches their fiduciary duties to the company.

Interestingly, this means that The Walt Disney Company is both a plaintiff and a defendant in this case. The suit also names Disney executives and former executives including current CEO Bob Iger, former CEO Bob Chapek, Christine McCarthy, Kareem Daniel, and others.

So What is This One Over

The suit alleges that “certain current and former officers and directors of the Company” have violated the Securities Exchange Act of 1934, breached fiduciary duties, engaged in insider trading, and wasted cooperate assets. The 63-page suit sets out to describe the ins and outs of this in great detail.

However, the heart of it all lies with Disney+. Disney is being accused of misleading investors. Specifically, the suit states that Disney “repeatedly misled investors about the success of the Disney+ platform by concealing the true costs of the platform, concealing the expense and difficulty of maintaining robust Disney+ subscriber growth.”

The plaintiff seeks damages and is calling for reform.

Wait, This Sounds Familiar!

If this sounds familiar, it is because it IS familiar. This lawsuit is very similar to one that was filed back in May by a different group of Investors that named some of the same defendants including Chapek and McCarthy, but not Iger. You can read about that one HERE. A third lawsuit of a similar nature was also previously filed.

In other words, this has all happened before, and it will all happen again. We shall see whether this one gets dismissed or moves forward.

And, it is all happening amidst plenty of other legal turmoil including a lawsuit involving The Little Mermaid and another involving Avatar. And, of course, there is also the federal case against Ron Desantis, the State lawsuit brought by the CFTOD, and the countersuit. Lawsuits everywhere. Then again, perhaps this is the way when it comes to big companies like Disney.

What do you think about this lawsuit? Let us know in the comments. And, as always, feel free to pass it along.

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Malvinder kaur

Thursday 31st of August 2023

Without knowing complete case, as to what got done to investors? Didn’t they get their share of returns on end of every fiscal years? What was the reasons given? Expansions most probably , till entire case for cause of lawsuit doesn’t get to be known no conclusions can be given because it becomes hearsay

Darrell Fertakos

Lawsuits are the creative cancer in the industry. Mediation is a key way to solve problems without the high expense , stress , time and distractions involved in a lawsuit where anyone can say almost anything if true or not. A horrible experience I had when in a lawsuit.

Disney could of made billions of dollars to be more honest with shareholders - if the Disney company practiced open innovation and had an open door policy for entrepreneurs to work with the company far more easily rather than having a no unsolicited idea policy that Harvard Business School teaches restricts growth.

Fact , I created similar TV show ideas to what later became Shark Tank, America Got Talent and Dancing With The Stars in 2003 plus Facebook and YouTube..I tried to do as Walt Disney taught - reach out to big companies for help to bring big ideas to life in record setting time and with better results upon doing so Disney informed they had a not invented here and a no unsolicited idea policy.

So, it became impossible to share ideas, IP and new products plus tv shows with Disney and Abc network that could of helped the Disney company earn billions ..facts verified by Coffylaw.com .

I'm just one creative person Disney inc . Ignored ....Disney inc ignores many talented people per year, who reach out trying to help this company they also love so much, only to be told " thank you but we are sorry we cant help". To have lost opportunities that has hurt their bottom line for 30+ years with outdated red tape policies that Harvard Business School does not support , by not practicing Open innovation more so.

Hire a community intake manager to consider all the great new ideas and ip the community has while trying to help Disney. Review , consider and bring the best of these ideas to life or by working out win win deals with the public who seek to do biz and be rewarded for their IP and ideas that help the Disney company. To grow and profit in more ways than ever before - we must also reward and give credit to creative talent in more ways than ever before .

Due to financial challenges as a result of not innovating enough - perhaps they did mislead investors a bit. Or maybe not. I have new innovations and tv shows that could help Disney earn millions to billions - so reach out hire or invest in a former Disney cast member . Darrell FERTAKOS.

Positive change is needed moving forward as a former Disney cast member and award winning inventor I have solutions reach out.