Disney Officers and Directors Under Investigation for Possible False Statements and Breaches of Fiduciary Duty
Schubert Jonckheer & Kolbe LLP is investigating potential derivative claims on behalf of shareholders of The Walt Disney Company (NYSE: DIS) relating to possible false and misleading statements and breaches of fiduciary duty related to subscriber growth on the company’s streaming platform, Disney+.
On November 6, 2023, plaintiffs filed a consolidated securities class action complaint in the U.S. District Court for the Central District of California alleging a nine-part scheme by Disney and certain of its current and former officers and directors to mislead the company’s shareholders concerning projected rates of subscriber growth on Disney+. Among other things, plaintiffs alleged that between December 10, 2020 and May 10, 2023, the defendants set “unattainably high” Disney+ subscriber targets to boost the company’s stock price and then took several actions to maintain their alleged scheme, including reorganizing the company, masking “unsustainable” content costs with “accounting manipulations,” and repeatedly assuring shareholders the projections were on track, which they were not. When the truth began to emerge in November 2021, the company’s stock price plummeted in several stages, erasing billions in shareholder value. Then, on August 9, 2023, Disney disclosed a $2.65 billion impairment charge, the vast majority of which was “related to the removal of content [from direct-to-consumer streaming services, including Disney+] and the termination of certain third party license agreements.”
During the relevant period, the securities class-action plaintiffs also alleged that certain Disney executives, including CEO Robert A. Iger and former CFO Christine M. McCarthy, unloaded a combined $393 million of their personal Disney stock.
The Schubert Firm is investigating potential breaches of fiduciary duty by Disney’s officers and directors in connection with these allegations.
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