LPWire: Statement By Slesinger Family in Response to Shareholders Suit Against DIS Co
Disney Shareholders Sue Over Pooh,
Disney Could Lose Billions in Royalties and Future Earnings
The following is being issued today on behalf of the Slesinger Family.
A group of Walt Disney Co. shareholders sued Disney this week, claiming the company failed to disclose potential liability in an ongoing lawsuit over Winnie the Pooh revenues. By its own admission, Disney stands to lose hundreds of millions of dollars and certain rights to license Pooh (Tigger, Eeyore, Christopher Robin and all the characters from the Hundred Acre Woods) in the U.S. and Canada.
According to Bert Fields, lawyer for the family that owns the Pooh rights, the amount could be closer to one billion dollars, plus punitive damages, plus future Pooh earnings if the royalty agreement is terminated. Some industry experts estimate that Pooh accounts for up to 25% of Disney's annual revenues of over $25 billion.
Although the Pooh dispute has been in court for a decade, it only became public in May when Disney disclosed the potential liability in its SEC filing.
The plaintiff in the case is Shirley Slesinger Lasswell, the 79-year old widow of licensing pioneer Stephen Slesinger, who teamed up with Pooh author A. A. Milne in the 1930s to expand Pooh beyond the confines of his books. After her husband died, Mrs. Lasswell extended Pooh product and service uses in the States. In 1961, she granted Pooh rights to Walt Disney himself, striking a deal that gave Disney all U.S. and Canadian television, merchandising and future media rights. In exchange, Milne and Slesinger were given a percentage of gross revenues generated by Pooh-related products and services worldwide. (Disney has since bought out Milne's interest.)
"It's truly a shame that Disney let this go so far," said Mrs. Lasswell. "I never wanted to see Pooh get publicity like this, but Disney brought it on themselves. All we're asking for is what we're owed."
Last year, an L.A. Superior Court judge imposed sanctions on Disney after finding it destroyed thousands of documents in the case including a file entitled "Winnie the Pooh Legal Problems." In a separate tentative ruling in June 2002, the judge scolded auditors for meeting regularly with Disney behind closed doors and rejected their method for estimating part of Slesinger's damages. This ruling, which involves only a small portion of the total case, could itself result in an award to Slesinger of $200 Million, according to Disney estimates.
--Posted August 27, 2002
Source: Slesinger Family Release