Don’t miss Professor Ribstein’s post about the ongoing trial over the Walt Disney Co. board’s decision to pay Michael Ovitz a rather generous severance package for essentially doing nothing during his short stay at Disney.
The trial is an interesting one because it combines Hollywood largesse with knotty issues of corporate law, such as the limits of judicial supervision over the business judgment rule. However, Professor Ribstein wonders whether something even more basic is unfolding:

But I wonder whether something more basic is at stake — the future of the corporate enterprise as we know it. After all that we have seen in the last few years, can we really be optimistic that things are changing?

He goes on to point out that Disney could well be the product of an obsolescent business model:

Think about this in the Disney context. Why do we need this Disney behemoth? The brand? Synergy? Michael Powell recently wondered “if Walt Disney would be proud,” speculating on the disastrous cross-promotion of Disney’s Desperate Housewives on Disney’s Monday night football. Does this sort of thing make people want to go into Disney’s family-oriented amusement parks? Even the film business has gotten away from the Disney brand — Pixar was providing the meat until Eisner chased it away.

Professor Ribstein points out that there is a better way:

I’ve argued in Why Corporations? for the dismantling of the corporate entity and the greater use of partnership-type forms for publicly held business. This could be spurred by a change in the tax laws that puts more emphasis on distribution rather than retention of earnings.

How about spinning the amusement parks into a real estate limited partnership, divesting the television properties, and focusing on the movie business? Aside from giving Eisner less to play with over his remaining two years, what would be lost?

In short, the Disney Board’s foible of approving the Ovitz severance package pales in comparison to its failure to require Michael Eisner to adapt Disney’s corporate strategy to maximize value for Disney’s shareholders. This is true clear thinking, so check out the entire post.