Wednesday, August 10, 2005

He’s Got Eisner’s Number

"Despite all of the legitimate criticisms that may be leveled at Eisner, especially at having enthroned himself as the omnipotent and infallible monarch of his personal Magic Kingdom, I nonetheless conclude … that Eisner's actions were taken in good faith."

"By virtue of his Machiavellian (and imperial) nature as CEO, and his control over Ovitz's hiring in particular, Eisner to a large extent is responsible for the failings … that infected and handicapped the board's decisionmaking abilities."

"Eisner stacked his (and I intentionally write "his" as opposed to "the Company's") board of directors with friends and other acquaintances who .. were certainly more willing to accede to his wishes … than truly independent directors."

—Delaware Chancellory Judge William Chandler III

Well somebody’s got Michael Eisner’s number.

Here’s a judge who tells it exactly like it is—even going so far as to identify the Disney Board of Directors as Michael Eisner’s puppets.

Chandler’s comments need no elucidation from me—I have pointed out Eisner’s vainglorious paranoia in June 8th’s “Summer Reading: ‘Eisner’ Without the ‘D’” and urge all to absorb the gory details of Eisner’s follies in James Stewart’s wonderful “Disney Wars.”

But his comments should be read.

All those in control of our legal system should think so clearly.

Jeff Matthews
I Am Not Making This Up

The content contained in this blog represents the opinions of Mr. Matthews. Mr. Matthews also acts as an advisor and clients advised by Mr. Matthews may hold either long or short positions in securities of various companies discussed in the blog based upon Mr. Matthews' recommendations.


magordon03 said...

I am not sure why you consider this clear thinking. The comments you posted were a given, and the real "clear thinking" that was required of this judge was in deciding whether or not these directors violated their fiduciary responsibility to shareholders. I haven't read the decision yet, but the section you quoted does not seem consistent with the final decision. Why should the responsibility of these directors to shareholders be forgiven, just because it was hard for them to do the right thing in light of their relationship with Eisner?

Alex Khenkin said...

I second magordon03's opinion - these people did not do the "right thing" by the owners (shareholders), and I’m not sure how their being hand-picked by Eisner is a mitigating circumstance.

Its_strange said...

How long was Eisner running the Magic Kingdom ? When did he start packing the BoD ? How long has it been rumored he was this kinda guy ? How long did the longs just ignore his behavior ? Did the shorts do anything ? ...Did the WSJ cover any of this ? When ? How about CNBC ? ......How long did Tyco go on before anything real happened ? How about LHSP ? .....This is just another example of a broken system with little real press coverage and certainly nothing but talk from the NYSE and our gov......i hope Jeff is right about his view many papers and magazines are on the way out.....and i hope the net does both political parties in as well, thier finger prints are all over this

Guambat Stew said...