advised Eisner that there was no cause to terminate Ovitz under the
employment agreement. Id. at 68.
Ultimately, Eisner terminated Ovitz and the Company honored its contractual obligations by paying to Ovitz his NFT benefits under his employment agreement with the Company.
A group of stockholders, no doubt urged on by the size of the NFT payment, quickly sued the directors and officers alleging that they breached their fiduciary duties with respect to the hiring and firing of Ovitz.
The Court of Chancery initially dismissed all of plaintiffs’ claims for failure to make a demand on the disinterested and independent directors and for failure to state a claim. The Court began by noting that the issues presented by this litigation, while larger in scale, are not
unfamiliar to this court. Just as the 85,000-ton cruise ships Disney Magic and Disney Wonder are forced by science to obey the same laws of buoyancy as Disneyland’s significantly smaller Jungle Cruise ships, so is a corporate board’s extraordinary decision to award a $140 million severance package governed by the same corporate law principals as its everyday decision to authorize a loan. . . . Nature does not sink a ship merely because of its size, and neither do courts overrule a board’s decision to approve and later honor a severance package, merely because of its size.
In re The Walt Disney Co. Derivative Litigation, 698 A.2d 959, 350 (Del. Ch.
On appeal the Delaware Supreme Court upheld the dismissal of the original complaint for failure to make demand on the board, finding that although the process of the board may have been “casual, if not sloppy and perfunctory,” the complaint did not raise a reasonable doubt that the directors were independent or should not be protected by the business judgment rule. Brehm v. Eisner, 746 A.2d