(Reuters) – Walt Disney Co.’s board did not act negligently when it criticized a sexual identity law signed by Florida Gov. Ron DeSantis, a Delaware judge ruled on Tuesday in a case the judge said was misdirected by a conservative legal group.
Judge Lori Will’s ruling in Delaware’s Court of Chancery means Disney does not have to hand over internal records including years of board member emails sought by shareholder Kenneth Simeone, who sued Disney in December.
The shareholder said he wanted the documents to examine possible misconduct by board members in connection with the company’s decision to criticize the 2022 law, which critics have derided as the “don̵
7;t say gay” law.While Judge Will said it may turn out to have been a bad business decision, the evidence at the trial showed directors did not let their personal views dictate the company’s response to the bill.
The judge said Simeone cannot use a provision in Delaware’s corporate law intended to give shareholders the ability to investigate board misconduct to “search for hypothetical conflicts.”
Disney’s criticism touched off a war of words with Mr. DeSantis and led to the state removing the company’s control over a special administrative district that promotes development around the Walt Disney World resort.
Mr. DeSantis, who is seeking the Republican presidential nomination, has used his fight against what he calls “woke Disney” to raise his national profile.
Judge Will also found that the lawsuit was brought for the benefit of the Thomas More Society, a nonprofit law firm that defends conservative causes that paid Mr. Simeone’s legal costs. Mr. Simeone’s lawyer, Paul Jonna, is a special agent for the organization.
“Appellant’s counsel and the Thomas More Society are entitled to their convictions,” Judge Will wrote, adding that a corporate records lawsuit “is not a means of furthering them.”
Simeone, Jonna and Disney did not immediately respond to requests for comment.
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