Litvack (as legal counsel)
Failed to speak up when Russell incorrectly informed the responsible committee that Ovitz’s 1995 bonus (which the committee later reconsidered) was contractually required. Id. at 169-71.
Like Eisner, created no written record to support his “no cause” to terminate Ovitz decision.
In addition, the Disney board had a few collective failures:
It failed to ensure that its minutes were correct, reflected who attended meetings, or the consideration given to a significant transaction, including the absence of a record of topics considered during executive sessions.
The Court also bemoaned the fuzzy record created by the minutes with respect to the amount of time the Compensation Committee devoted to its consideration of the Ovitz employment agreement.
The Court was troubled by a press release the Company issued indicating that Ovitz would continue to serve as an advisor and consultant, noting that the release was either untrue or the result of sloppy work.
CONCLUSION -- A GUIDE TO GOOD FAITH CORPORATE GOVERNANCE
The Delaware Supreme Court has yet to have its say on the definition of “good faith” or the rulings in Disney IV, which case is currently on appeal. Thus, there are still unanswered questions regarding the viability of a “good faith” claim in Delaware.