A judge in Delaware Chancery Court has made a ruling that has caught the attention of many. The ruling was against a shareholder who sued Disney for documents regarding its opposition to Florida’s controversial Don’t Say Gay law. While this decision was being made, another lawsuit was already in progress in the state. In this lawsuit, Disney had sued Gov. Ron DeSantis for retaliation after the company spoke out against the legislation. The shareholder, Kenneth Simeone, claimed that Disney’s decision to oppose the bill was negligent and caused harm to the stock and business. However, Judge Lori Will ruled that there was no evidence of wrongdoing and that the plaintiff was merely a tool of his attorneys who pushed him to bring the case. According to the judge, the plaintiff failed to demonstrate a proper purpose to inspect the books and records, and the lawsuit was driven by lawyers rather than genuine concerns.
, During the trial, Simeone admitted that he did not recall reading a draft of the demand before it was sent to Disney. He also did not review or make any edits to the Complaint, and he did not see the news articles that were presented as evidence in support of his claim. The judge emphasized that the plaintiff’s disagreement with Disney’s position on the bill does not constitute evidence of wrongdoing. It was revealed that former CEO Bob Chapek publicly criticized the bill at Disney’s annual meeting in March 2022 under pressure from employees. Governor DeSantis signed the bill into law on March 28, and on the same day, Disney issued a public statement opposing it. This led to Governor DeSantis revoking Disney’s special status in the state and taking control of the district where Walt Disney World is based. Despite these events, the judge found no evidence that Disney’s directors and officers breached their fiduciary duties or acted in bad faith. The judge also noted that Disney had provided board minutes and corporate policies to the plaintiff, further supporting their position.
, The controversial HB 1557, which prohibits certain discussions on sexual orientation and gender identity in classrooms, was at the center of this legal battle. The judge concluded that the plaintiff failed to provide a credible basis to infer possible wrongdoing. She acknowledged that this case highlights the challenges faced by corporations when addressing divisive topics that are external to their business. The judge also recognized that a board may decide, in the exercise of its business judgment, that addressing the interests of corporate stakeholders is essential for long-term value. She noted that remaining silent on the bill could have avoided political blowback, but it could have also damaged the company’s corporate culture and employee morale. Ultimately, the judge found no lack of due care or bad faith on the part of Disney’s directors and officers.
