Lawyers in Delaware Disney Trial Wrestle With No-Frills Accomodations

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The New York Sun

Lawyers for Walt Disney Company and investors seeking to recover former president Michael Ovitz’s $140 million severance returned to court yesterday for the final week of a two-month trial that has tested their ability to cope with life outside Hollywood and New York.


Unable to find office space in Georgetown, Del., the town of 4,623 residents where the trial began in October, New York lawyers for Disney investors are operating out of a three-story, white Victorian house across from the courthouse.


“We had to renovate the entire building to install the computer lines and other stuff we needed to be able to function,” said Milberg Weiss Bershad & Schulman’s Steven Schulman, the investors’ lead attorney. “It was quite an undertaking.”


The trial, which resumed yesterday after a holiday break, pits Disney investors against former and current directors whom they contend are liable for failing to manage Mr. Ovitz’s hiring and firing. The Hollywood celebrities and their lawyers find themselves in Georgetown because Burbank, California-based Disney is incorporated in Delaware.


Investors want the money returned to Disney, the no. 2 American broadcasting and entertainment company after Time Warner. The company has insurance coverage for directors and officers should the defendants be found liable. Disney said in a regulatory filing last week that the company or its insurers paid $4.1 million in legal fees and expenses between October 2003 and December 31, 2004 in connection with the lawsuit.


The case was assigned to Chief Chancery Court Judge William B. Chandler III. The judge, who is set to hear testimony from expert witnesses on whether Disney could have fired Mr. Ovitz without paying his $140 million severance, lives 13 miles from the courthouse.


Georgetown, whose surrounding county has more chickens than anywhere in America, according to state data, has tested the out-of-towners’ ingenuity in several ways.


With no dry-cleaning services at the hotel where they are staying 21 miles away in Rehoboth Beach, the lawyers representing Mr. Ovitz were forced to “ship clothes for two months,” said Mark Epstein, a partner at Los Angeles’ Munger, Tolles & Olson.


Most of the defense lawyers’ weekends have been consumed by witness preparation, document searches and legal research geared to making the case that neither Mr. Ovitz nor Disney’s board did anything wrong in connection with the former talent agent’s hiring and firing, Mr. Epstein said.


The defense team divides its time outside the courtroom between rented offices in town and a “war room” – a conference-size space on the first floor of their hotel.


The 32-member team, which has taken over the Bellmoor, a luxury hotel in Rehoboth, has access to more than 10 computers, two industrial-sized printers, laptop docking stations and high-speed Internet connections. A total of about 22 lawyers, 10 paralegals, and other support staff have been assembled to defend the company and Mr. Ovitz in the suit.


Lawyers for the Disney directors are squired to and from the courthouse in a mini-bus rented from Eagle Limo.


Shareholder lawyers drive over from their Rehoboth hotel, the Boardwalk Plaza, in their own cars. Both sides turned down the more Spartan accommodations of the Comfort Inn, Georgetown’s only hotel.


Other lawyers who have come to Georgetown have been less picky. Attorneys for both sides in a nine-day trial of a stock-appraisal case heard in May 2003 stayed at the Comfort Inn, court officials said.


Georgetown, located about 90 miles southeast of Philadelphia near Delaware’s Atlantic coast, has had its normally quiet pace of life upset by the influx of witnesses testifying at the trial. Disney’s chief executive, Michael Eisner, Mr. Ovitz, and actor Sidney Poitier, a former director, were among those who took the stand.


During Mr. Ovitz’s testimony, a local radio station hired two people to dress up in mouse and duck costumes – an acknowledgement of Disney’s famous cartoon characters – and stage a fight in front the courthouse.


Other residents are taking the trial in stride. At Smith’s Family Restaurant, the town’s only diner, waitress Debbie Marker said most customers don’t have a clue about the nature of the Disney case.


“You have to give them some background,” said Ms. Marker, 51, who goes by the nickname “Sarge” and has become the restaurant’s unofficial spokeswoman since the trial began on October 20.


Smith’s bustles every midday with groups of senior citizens, local attorneys, and courthouse employees. The waitresses know customers’ names and tastes, cutlery comes wrapped in a bag, and salad dressing is served in a paper cup. The meatloaf special for $5.99 with two vegetables is the most popular order.


Even 53-year-old Judge Chandler, an avid runner, had to make adjustments because of the trial. One change: He curtailed his daily lunchtime jogs around Georgetown so he can keep up with other cases.


Mr. Epstein and three lawyers for Disney directors got a little home-away-from-home cooking in November when Rehoboth retiree Marcia DeWitt took pity and invited the team to her house for dinner.


“My husband and I thought they might be tired of hotel and restaurant food and probably would enjoy eating a meal in a more casual” environment, said Mrs. DeWitt.


Plaintiffs’ lawyers in the Disney case have found their own ways to make life more bearable away from home.


A Milberg Weiss lawyer representing investors, John Rediker, brought his dog Jack, a nine-and-a-half-year-old tan Labrador retriever, to make his stay more manageable. Jack can often be found sprawled in the trial team’s conference room.


“Jack is a vicious defender of shareholders’ rights once he can rouse himself off the floor and if he isn’t distracted by a Frisbee,” said Mr. Rediker, who lives in Manhattan.


The New York Sun

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