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Delaware Court: Inadequate Process May Cost Disney Board Protection of Business Judgment Rule

In a surprise decision, Delaware's Court of Chancery has concluded that the shareholder derivative lawsuit against Walt Disney Co. and its directors (In Re Walt Disney Co. Derivative Litigation, Del. Ch. C.A. No. 15452, 5/28/03) can proceed on the claim that the board breached its fiduciary duties in approving a lucrative severance package of former CEO Michael Ovitz.