Reference no: EM132207399

Please help me to summarize the article (5 to 6 sentences) and answer the questions.

The Walt Disney Company created a secret ''Project Snowball'' in 1991 to deprive Jeffrey Katzenberg, its former film studio chief, of a huge bonus if he left the company when his contract ended, a lawyer for Mr. Katzenberg said today.

In opening statements in the $250 million breach-of-contract lawsuit brought by Mr. Katzenberg against Disney, the lawyer, Bertram Fields, offered a series of letters and memorandums to bolster his contention that Disney had sought through subterfuge to deny Mr. Katzenberg his bonus.

A top Disney lawyer, Lou Meisinger, vigorously denied the accusations. ''If we were in a movie theater, I think this would be the point where a responsible film maker would put up a disclosure: the story you have just heard is fiction.'' He said there was ''nothing sinister'' about the project.

During Mr. Katzenberg's decade as chairman of Walt Disney Studios, which ended bitterly in 1994 when Michael D. Eisner, the company's chairman and chief executive, passed him over for the No. 2 job at the company, operating income rose to $186.3 million in 1988 from $2.3 million in 1984. He oversaw the development of about 700 projects, including television shows and films like the lucrative animated hits ''The Lion King,'' ''Aladdin'' and ''Beauty and the Beast.''

Mr. Fields argued that Mr. Katzenberg was entitled to 2 percent of the estimated income generated by the projects he developed at Disney, including music and merchandising spinoffs. The money -- estimates run as high as $250 million or more -- was to be paid in a lump sum two years after he left the company.

Mr. Eisner initially contended that Mr. Katzenberg had essentially forfeited his bonus if he left in 1994 or if Disney dismissed him. But Disney and Mr. Katzenberg reached a partial settlement in November 1997 in which Disney conceded that Mr. Katzenberg was owed something.

Since then both sides have failed to reach an agreement, leading to today's hearing. Mr. Fields said that Mr. Eisner's ''personal animus'' toward Mr. Katzenberg had thwarted any agreement. Mr. Meisinger, the Disney lawyer, dismissed the assertion.

Arguments in the case could run for several weeks. Within Hollywood there has been surprise that the case, which has the potential to embarrass Disney and perhaps Mr. Katzenberg, has not been settled. It is highly unusual for two moguls like Mr. Eisner and Mr. Katzenberg to publicly air a dispute over money and contracts.

At issue, Mr. Meisinger said, was Mr. Katzenberg's contention that the bonus owed to him was not limited to the years he ran Disney studios but after that, too. Accordingly, the financial differences could be huge. Mr. Katzenberg, for example, could seek a portion of the receipts of the Broadway hit ''The Lion King,'' which opened after he left Disney and was based on the film that he helped shape.

In his statement, Mr. Fields said that the ''secret project'' involving top corporate executives, including Mr. Eisner, was designed to ''discuss and investigate the possibility of claiming that Mr. Katzenberg is forfeiting his contract if he leaves in 1994.''

Later, Mr. Fields, a top Hollywood litigator, said, ''We've got a real credibility problem with this fellow,'' referring to Mr. Eisner.

At another point, Mr. Fields said that Mr. Eisner, Sanford M. Litvack, Disney's senior vice president, and Irwin E. Russell, a board member and Mr. Eisner's personal lawyer, told ''palpably untrue'' stories about what Mr. Katzenberg was entitled to.

Later, Mr. Meisinger said heatedly, ''The notion that there was some form of deceit visited on Mr. Katzenberg is totally and utterly fatuous.''

Mr. Meisinger added, ''Contrary to the statement by counsel, 'Project Snowball' wasn't how we could figure out how to gyp Mr. Katzenberg out of his payments.'' Rather, he said, the term was coined by an accountant who was assigned to calculate Mr. Katzenberg's bonus. Mr. Meisinger said the term was meant to show how the project was getting bigger and bigger.

The session was held in the law offices of Greenberg, Glusker, Fields, Claman & Machtinger in Century City, Calif. Mr. Fields, who represents numerous movie stars, is a partner in the firm.

Mr. Eisner was not at the session. But Mr. Katzenberg sat and listened intently all day, flanked by his wife, Marilyn Katzenberg, and Helene Hahn, the top lawyer at Dreamworks, who worked for him at Disney. After leaving Disney, Mr. Katzenberg helped establish Dreamworks SKG with Steven Spielberg and David Geffen.

1. List one issue from the article with which you agree or disagree. Explain why you feel the way you do about the issue.

2. Explain ways in which the issue(s) presented in the article will affect the business world. Be specific and detailed.

3. Is there a better solution to the issue? Why or why not?