Former Disney CEO Bob Chapek, CFO Christine McCarthy, and Others Accused of Misleading Investors About Disney+ in Lawsuit

Former Disney CEO Bob Chapek, CFO Christine McCarthy, and Others Accused of Misleading Investors About Disney+ in Lawsuit

An investor has filed a proposed class action in the US District Court for the Central District of California, alleging that The Walt Disney Co.’s reorganization in October 2020, led by its new CEO Robert Chapek, was designed to conceal significant costs associated with its Disney+ streaming service.

The lawsuit names Disney, Robert Chapek, and other executives as defendants. According to the complaint filed on May 12, the defendants are accused of repeatedly misleading investors about the actual success of the Disney+ platform. They are alleged to have concealed the true expenses involved in maintaining substantial subscriber growth and misrepresented the platform’s profitability prospects, claiming it would achieve profitability by the end of the fiscal year 2024.

Related – Disney+ Subscription Update: Price Increase Coming to Ad-Free Premium Tier

The plaintiff, the Local 272 Labor-Management Pension Fund, claims that the executives engaged in a strategy where they initially released content meant for Disney+ on a different platform. This tactic was allegedly employed to transfer marketing and production costs from Disney+ to the legacy platform, according to the lawsuit.

The reorganization led by CEO Robert Chapek is said to have significantly deviated from Disney’s traditional reporting structure, resulting in internal controversy. The power and control that were previously held by creative content executives were purportedly redirected to Chapek’s subordinate, Kareem Daniel, who is also named as a defendant in the case.

In response to a request for comment to Bloomberg Law, Disney stated via email that they are aware of the complaint and plan to vigorously defend themselves in court.

Following these events, Robert Chapek was subsequently replaced by the former long-term CEO, Robert Iger. Upon his return in November 2022, Iger initiated another reorganization and announced the departure of Kareem Daniel.

Related – Kareem Daniel Leaves Disney Following Bob Chapek’s Departure

According to the pension fund, as details regarding underwhelming Disney+ subscriber growth and the company’s financial results emerged, Disney’s stock price experienced multiple shocks.

The complaint estimates that the proposed class for the lawsuit could potentially include hundreds or even thousands of members. The pension fund is seeking damages and injunctive relief based on its securities fraud allegations.

The fund and the proposed class are being represented by Robbins Geller Rudman & Dowd LLP and Pitta LLP.

The case, titled Local 272 Labor-Mgmt. Pension Fund v. The Walt Disney Co., is filed in the US District Court for the Central District of California under docket number 2:23-cv-03661. The complaint was filed on May 12, 2023.

Let our friends at Destinations to Travel help you book your next Disney Vacation. They are the preferred Travel Agency of Chip and Company and Disney Addicts, and who we use ourselves.

Get started below for your FREE No Obligation Quote.

Book With our friends at Destinations to Travel

Who is your Travel Agent?(Required)

Let us pick for youEric HilesStacy ReedAbbey JohnsonAlisa SullivanAlli WillisAmanda FolsomAmanda VannAmber BrillhartAmber FisherAmy SieburnAndrea SmithAngela AndersonAngie BaycuraAnna PetrilliAnnabelle DuboseApril StefanskiAshley RamseyBeth ParsonsBetsy SantoroBrandie McQueenBrian BuckleyBridget HatchBryan SchwartzCandice SneedCarrie ButlerCarson DockumCasey BoltCharleen HortonChelsea RoyChelsea WuebkerChris BoyerChristie GrubeChristina FratturaChristina SmithCourtney WhiteCraig YoderDan MercedDanielle NorcrossDarby MouritsenDavid ForrestDeborah AlvaradoEmilee BiegelEmily MorrisFaith HakesGail HatchGreg MatzkerHelen HummerHolly CurryJackie CavistonJaclyn PepitoneJamie SwansonJeanine JordanJeff CallahanJenni MaierJennifer BrownJennifer StephensonJennifer StoessnerJessica HatfieldJessica HuffJessica WunderJoe GuertinJon CarpentierJoseph SliwaJulie McCombJustin BrownKat AttridgeKathryn EberhartKathy AndersonKatie HarrellKatie PrevotKayla CookKelsey SullensKim HelmsKimberly HutchinsonKristi GallagherKyle RamsdenLauren DewlenLeanne MonterLinda DurhamLindsay AckermannLindsey VromanLissette BritoLori HardyMallory MorrisonMandi QuinnMaranda PerkinsMarisa AlvaradoMegan TeismannMeghan BlairMelissa ReedMichele KlineMike BeyerMissy McCormickMisty DickersonNancy CasteelNicole ThorntonPatrick O'ConnorPaul SulPeyton Ward-KubikRaylene CooganRegan OstranderRobbie BulusRobert ThomasSara SolbergSarah McCandlishShanna BrowningShelley BennettShelly MetzStacy CristStacy KrzyminskiStacy SmithStephanie DraganoStephanie FerencStephanie WalshSusannah McCordTara SlusserTerri MillerTiffany DobraskiTiffany DrenkhahnTina FarmerTonya LesiukTracy DaneTroy DuncanVeronica RenteriaVicki FesslerWendy CarllWendy HauserWendy KellehanWendy Shelley

Name(Required)

First Last

Email(Required)

Phone(Required)

Destination(Required)

Walt Disney WorldDisneyland ResortDisney Cruise LineAulani, A Disney Resort and SpaAulani, A Disney Resort and SpaUniversal FloridaUniversal HollywoodRoyal Caribbean, Carnival, Norwegian or other Cruise LineI don't know yet

# of Adults(Required)

# of Children(Required)

Check-in-Date(Required)

MM slash DD slash YYYY

Check-out-Date(Required)

MM slash DD slash YYYY

Comments, Questions or Special Requests

Comments

This field is for validation purposes and should be left unchanged.

Δ

For the BEST in Disney, Universal, Dollywood, and SeaWorld Theme Park News, Entertainment, Merchandise & More follow us on, Facebook, Instagram, and Youtube. Don't forget to check out the Chip and Company Radio Network too!