3
Credit: Inside the MagicDisney’s most controversial public figure has been named in a newly-filed lawsuit against the giant company.
Related: Disney Shares Latest Venture in Turning Theme Parks “Green”
Former CEO of The Walt Disney Company Bob Chapek is named as a defendant in a newly-filed lawsuit, states Bloomberg.
According to the lawsuit, which was filed in US District Court for the Central District of California, the defendants include current CFO Christine McCarthy and Kareem Daniel, who is the former Entertainment Chief. The lawsuit claims these executives engaged in “misleading investors and concealing the true cost of the Disney+ platform.”
Related: Disney Ride Left in Worrying State, Guests Call Out Lack of Maintenance
The lawsuit qualifies as a securities class action suit filed on behalf of all purchases of Disney stock between December 10, 2020, and November 8, 2022.
Those with a good memory will remember Bob Chapek was fired from The Walt Disney Company just weeks later, on November 20, 2022. The lawsuit specifically takes issue with the restructuring that occured in October 2020 at The Walt Disney Company.
The lawsuit alleges this was “a dramatic departure from Disney’s historical reporting structure,” and was “hugely controversial within the Company because it took power away from the creative content-focused executives and centralized it in a new reporting group led by defendant Daniel who reported directly to defendant Chapek”.
After this restructuring, Disney Media and Entertainment Distribution (DMED) was formed, and a fraudulent scheme resulted. Disney+, Disney’s streaming platform, faced a series of issues that remain to this day. Fast forward to Disney’s Q2 Earnings Report, and Disney+ is down a whopping four million subscribers.
The lawsuit also states that Disney worked to conceal the difficulties of Disney+ as a business and “engaged in a fraudulent scheme designed to hide the extent of Disney+ losses and to make the growth trajectory of Disney+ subscribers appear sustainable and 2024 Disney+ targets appear achievable when they were not.”
What do you think about this lawsuit? What do you think about Bob Chapek?