Michael Ovitz testified Wednesday that he begged to stay on as president of the Walt Disney Co. and described his departure from the media firm as an emotionally wrenching experience that destroyed his 25-year friendship with Disney chief executive Michael D. Eisner, wrecked his career and made the last several years the worst of his life.
"I went into a partnership with a man I was a life partner with, in a strange way, as a friend, and expected it to be a home run, and it was a nine-inning ballgame that was over in three innings," Ovitz said during his second day of testimony in a shareholder lawsuit over his $140 million severance package from Disney.
The result was "seven or eight of the worst years I've had in business or personally," Ovitz said. In addition, he said, the loss of the friendship left a "hole in my life."
Ovitz also accused Sanford Litvack, who was Disney's chief operations officer, of trying to sabotage his efforts at every turn. Litvack has criticized Ovitz's tenure at Disney, which lasted from October 1995 to December 1996, saying he had to follow the Disney president around "with a shovel."
"He did walk behind me," Ovitz testified Wednesday before Delaware Chancery Court Judge William B. Chandler III. "But it wasn't a shovel he was carrying -- it was a knife."
Shareholders filed the suit seven years ago, after Ovitz left Disney with a severance package valued at around $140 million. They are demanding that Ovitz, Eisner and other Disney directors, including actor Sidney Poitier and former senator George J. Mitchell, repay the company treasury for the severance package plus about $60 million in interest.
Ovitz also said he was devastated by Disney memos filed as evidence in the case in which Eisner referred to Ovitz as a "psychopath" and habitual liar.
"I don't understand and I will never understand how a guy could be with me so much . . . and then write in a memo that he never sent me that I'm a liar, that I have a veracity issue, that I'm a psychopath," Ovitz said. "I can't figure it out."
Ovitz said when he took the job as president in 1995, he told Eisner, " 'Just train me, and I'll cover your back. All you've got to do is watch mine.' It never happened."
It was the most emotionally charged testimony of the trial so far, offering a powerful, if one-sided, glimpse of the birth and rapid implosion of a partnership between two of the most powerful and vivid personalities in the media industry.
Lawyers for the plaintiffs in the suit began their cross-examination of Ovitz on Wednesday afternoon by trying to point out inconsistencies in his testimony and suggesting that he was not qualified for the Disney job.
The cross-examination will continue on Thursday. The trial, which began last Wednesday, is expected to last a month but lawyers in the case say they are already running behind schedule.
The plaintiffs say Disney directors failed to properly approve Ovitz's hiring, did not fully examine his contract and then failed to fire him for doing a bad job, something that would have negated much of the severance package. The case could set an important precedent, possibly leaving other directors open to similar lawsuits for failing to protect investor interests when they approve enormous executive compensation packages.
Ovitz spent much of the morning explaining that he took a large pay cut to join Disney and that he desperately wanted to succeed in the job. The plaintiffs have suggested that Ovitz put little effort into his work at Disney and then engineered his own departure with help from his friend Eisner because he knew he would walk away with the $140 million cash-and-stock package.
Ovitz dismissed those arguments, saying he turned down a more lucrative offer to be chairman and chief executive of MCA/Universal to take the job at Disney. He said he feverishly lobbied to save his job after a meeting in the fall of 1996 in which he said Litvack walked into his office and told him that Eisner wanted him out.
Ovitz said he went on a Caribbean cruise in late 1996 with longtime friend and Disney board member Gary L. Wilson and implored Wilson to help him stay at the company. "I knew if I didn't make it work that it would pretty much taint me career-wise . . . perhaps forever," Ovitz said of his desire to remain at the company. "I had to make it work."
But he said Wilson offered no encouragement, and by December it was clear he was finished. "I was being left out of meetings. Nobody was talking to me. I was cut out like cancer," Ovitz said. "I guess you could say I got pushed out the sixth-floor window," he testified, referring to the executive offices at Disney headquarters.
Ovitz acknowledged during the testimony that he made sure he would be guaranteed the full benefits of his contract if the job at Disney did not work out. But he said he did not take the job for the money but rather for the experience of working with a close friend at one of the nation's biggest public media companies. "The last thing on my mind was the money," he said. "I had enough money to live a nice life before I came to Disney. . . . For me, it was about the success of making it all work."
Ovitz also sought to rebut arguments that he was profligate with Disney money. He said he had nothing to do with a $2 million renovation to the area that included his office. Ovitz also testified that he believed Eisner had discussed his hiring and the terms of his contract with all of Disney's directors and received the proper approvals.
The cross-examination, which began after lunch Wednesday, quickly turned testy. The exchange between Ovitz and plaintiff's attorney Steven G. Schulman required frequent interventions by the judge. During one exchange, Schulman asked if Ovitz had ever headed a major movie studio. Ovitz retorted that, while he had not, the extent of his work with actors, directors and other creative talent was equal to that of any studio head.
"I'm sorry, but I have to educate you about this business, because you don't understand the business," Ovitz said.
Asked if he personally profited from a deal he helped set up between former Creative Artists Agency colleagues, Disney and Coca-Cola Co., Ovitz replied, "For you to suggest that I did anything underhanded in this deal or took money is ludicrous and insulting."