In the latest twist in a bitter feud involving the heirs of Walt Disney—and between the family and The Walt Disney Company—the legendary animator’s grandson and heir is attacking executives at the conglomerate for protecting their lucrative bonuses while furloughing workers.
“I have already expressed my hope that the Disney organization continue to give reasonable compensation and support to its many loyal employees in the spirit of the company of which my grandfather was so proud,” Disney grandson Brad Lund told The Daily Beast.
“To me, it’s the right thing to do during these difficult times—for the company, for shareholders, for its loyal employees,” he said.
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Lund told The Daily Beast he hopes “all family members will join in our dismay over senior Disney management compensation levels while furloughing Disney workers at this critical time.”
Lund’s remarks come after his second cousin Abigail Disney slammed executives for their handling of the COVID-19 crisis, tweeting last month “WHAT THE ACTUAL F***?????” in response to an announcement from the company that it would furlough 100,000 employees, including parks staffers, while the company has protected bonus schemes for execs that were reported to amount to roughly $1.5 billion.
“Look, dividends aren’t ALL bad, given the number of fixed income folks who rely on them. But still 80% of shares are owned by the wealthiest 10%. So that excuse only goes so far. But the REAL outrage is, of course, those bonuses…” Abigail said as part of a 25-tweet rant that went viral.
“All 1.5 billion of them. 1.5 BILLION. That’d pay for three months salary to front line workers. And it’s going to people who have already been collecting egregious bonuses for years,” Abigail fumed, before citing a Financial Times article that reported “Disney protected incentive schemes, which account for most of the executives’ remuneration. Mr. [Bob] Iger earned $65.6m in 2018 and $47m last year, The latest package is more than 900 times that of the median Disney worker’s earnings, which stands at about $52,000.” The FT later amended that article, stating that the $1.5 billion related to shareholder dividends, but also reported that the company was continuing to protect “executive bonus schemes.” As the FT reported, Disney CEO Bob Chapek could be eligible for a bonus “of not less than 300 percent” of his salary, “in addition to a long-term incentive award of not less than $15m.”
In a company-wide email sent to staff March 30, Chapek announced senior executives would be taking a pay cut owing to the pandemic.
“I will be taking a 50% reduction in my salary,” he wrote. “This temporary action will remain in effect until we foresee a substantive recovery in our business. Our executive chairman, Bob Iger, has chosen to forgo 100% of his salary.”
“This is why I was quiet in March when executives at the company made a big pr push to Call attention to the fact that they were giving up a portion of their salaries for the year,” Abigail said in a follow-up tweet.
“I told people to wait until we heard about the rest of the compensation package, since salary is a drop in the bucket to these guys. The real payday is in the rest of the package,” she tweeted.
Lund noted to The Daily Beast that “I agree with my cousin Abigail’s sentiments.”
On Wednesday, Disney begins a partial re-opening of the “Happiest Place on Earth” at its Orlando destination, Disney World, which will open the Disney Springs shopping and dining complex. Guests will be required to wear masks and undergo temperature checks.
The home of Mickey and Minnie Mouse blamed COVID-19 for its drastic decision to close its world-famous theme parks, which are usually open 365 days a year but shut down on March 12 as lockdowns hit the country. Workers were paid through April 18 and retained their health-care benefits.
Abigail Disney’s tweet storm was a PR disaster for the Walt Disney Company, which is well known for having a heavily staffed and aggressive spin team at hand to counter negative issues. “This is an unprecedented time, and the decision to furlough was not made lightly and was one of myriad actions taken to help the company weather the impact of the COVID-19 pandemic,” a spokesperson for the Walt Disney Company told The Daily Beast. “There is no truth to any speculation about bonus payments.”
On an earnings call this month, Chapek told analysts, “We are fully committed to getting our employees back to work as quickly as the current situation allows.”
The extraordinary public rebuke from Lund to the leaders of the company his grandfather founded comes as he continues to push forward with a remarkable legal case involving trustees of his mother’s estate, alleging he was frozen out of his inheritance following claims he was mentally incapable of managing the money.
The case, which has been running for more than a decade and has had more twists and turns than a Hitchcock thriller, now focuses on one judge—who is currently presiding and who decided that Lund lacked the maturity and financial ability to manage his inheritance.
Los Angeles Superior Court Judge David J. Cowan said in court on June 25, 2019: “Do I want to give $200 million, effectively, to someone who may suffer, on some level, from Down syndrome? The answer is no.”
That remark follows an earlier 2014 Los Angeles probate case and a messy seven-year legal fight in an Arizona court after Lund’s stepsisters filed a petition in 2009 to appoint a conservator due to alleged mental incompetence. Then his sister Michelle joined the action a year later, but on the grounds of undue influence by her father and stepmother rather than incompetence.
The judge ultimately tossed the matter, affirming that Lund was competent.
Lund’s counsel told Judge Cowan that it had been proven in the Arizona case in 2016 with a DNA test that Lund cannot suffer from Down syndrome and requested that the judge retract the statement. The judge denied the request.
Judge Cowan later refused to sign off on a multimillion-dollar settlement among all parties (including Lund, the trustees, his sister, and his stepmother) saying he had questions about the settlement, particularly with respect to how it was “silent” on the “suitability of the proposed management of the trusts going forward of these very large amount of funds for a person with limited intellectual abilities”—which was contradicted by the Arizona decision in 2016—and ruled that a temporary assignment of a guardian ad litem (GAL) for Lund was necessary.
The case is gathering steam as Lund and his legal team are using a 1871 civil-rights act—that was passed allegedly allowing any private individual the right to sue a state official—to sue Judge Cowan in California federal court, alleging he violated Lund’s due-process rights by appointing a GAL without a hearing.
Judge Cowan has moved to dismiss the case in federal court in California on the grounds that he is judicially immune as a judge from this action. A spokesperson for the Superior Court of California told The Daily Beast judicial canons prohibited Judge Cowan from commenting on pending litigation.
“Brad alleges in his civil-rights complaint that such a deprivation of the right to choose counsel is a violation of his due-process rights, and moreover, the appointment of a GAL must be based on a trial or hearing proving that Brad Lund is incompetent or mentally incapable,” according to the words of the complaint filed in California federal court co-signed by Lund’s co-counsel Lanny Davis.
“The absence of such notice and trial before the appointment of a GAL, depriving him of a right to counsel, is the basis of Brad’s alleged violation of his constitutional, due-process rights without due process of law,” the complaint states.
The maneuver is just the latest in the long-running case, where a different judge ruled on Lund’s mental capacity to replace the trustees in the 2014 ruling in a California court.
Lund had sought to replace the trustees—Andrew Gifford, Robert Wilson, Douglas Strode, and First Republic Trust Co.—but the judge declined to allow him to do so because he didn’t prove that the trustees acted in bad faith.
According to court documents Judge Mitchell Beckloff found, however, “…the evidence before the court did not establish that Mr. Lund lacked capacity such that he could not make independent decisions in connection with the Trustee removal power or that he did not understand the rights, duties, responsibilities, risks, benefits, and reasonable alternatives involved in or affected by a decision to exercise the Trustee Removal Power.”
In addition, in the second decision in an Arizona courtroom in 2016—after a 10-day bench trial at which Lund and medical experts who had examined him testified—the Arizona Superior Court, found that "Bradford Lund is able to effectively manage his medical care, estate, and other affairs. Bradford Lund has consistently demonstrated that he makes mature and appropriate financial decisions….”
Lawyers for the trustees and the guardian ad litem (GAL) Margaret D. Lodise did not respond to a request for comment.
At a public hearing held Feb. 28, Lund’s attorney, Sandra Slaton expressed her objection to multiple “secret meetings”—about the management of the assets in the trust and about discussing possible changes in the settlement agreement—that were held, according to Lund’s legal team, without their client’s knowledge, between Lodise and one or more trustees, at the offices of the trustees’ attorneys, Mitchell Silberberg and Knupp, and also attended by Michelle Lund’s attorney, David C. Nelson.
According to the transcript reviewed by The Daily Beast, Slaton objects: “We have Mr. (Hayward) Kaiser’s [the Trustees’ attorney’s] testimony, avowal, undisputed, in fact confirmed by [GAL] Ms. Lodise, that they have been doing meetings and negotiations and discussions behind our back. It’s been a sham because Mr. Lund has been excluded from this process.” Slaton called the secret meetings without notifying Lund an “abomination” and declared the settlement “null and void” and asked for a trial on whether Lund gets to inherit his money.
“Michelle is a beneficiary of trusts that are subjects of the current litigation and therefore, while not a litigant, is nevertheless a necessary party to any settlement affecting or impacting those trusts,” her attorney Nelson told The Daily Beast. “Michelle would welcome their good faith participation.”
“There accordingly was nothing surreptitious or otherwise inappropriate about either her being invited to participate or her participating, through her counsel, in settlement discussions.”
At the Feb. 28 hearing, Judge Cowan himself disapproved of the secrecy and non-disclosure of these meetings by those who attended them, including the GAL he appointed on Sept. 27.
“I encourage, as I already did before you started and, in fact, told the other side, that they need to be open about what is happening,” Judge Cowan stated.
But in a sign this drama will be playing out for some time to come, the trustees hit back in a filing on March 29 describing the notion of “secret meetings” as “disingenuous.”
Davis, Lund’s co-counsel, told The Daily Beast “neither the GAL nor counsel to the trustees ever called Brad Lund’s counsel, Sandra Slaton, to tell her that they were meeting to discuss changes in the global settlement agreement nor invited her and Mr. Lund to attend the meeting.
“Second, Mr. Lund himself—a competent 50-year-old who has been found by two courts to be able to make his own decisions with maturity and intelligence—has stated clearly that he regards these discussions by the trustees to make possible changes in the settlement agreement and to interview substitute trustees as a violation of the settlement agreement, rendering the settlement agreement null and void—and, therefore, he wants a trial.”
