POOH SCANDAL IS '$HRED' HOT
By NIKKI FINKE and LINDA STASI, Washington Post

January 29, 2002 -- Maybe Mickey Mouse should go work for Arthur Andersen.

In a bitter, 11-year-old lawsuit with a family that owns the commercial rights to Winnie the Pooh, the Walt Disney Co. was systematically destroying "massive amounts of documents . . . hundreds of boxes and thousands of pages" that might have shown it withheld or under-reported Pooh royalties, newly unsealed court records reveal.

The alleged destruction went on at least from 1992 to 1998 - and all the while, the entertainment giant was telling judges and plaintiffs they couldn't find the documents.

The paperwork was allegedly trashed after the heirs of New York agent Stephen Slesinger, who acquired the merchandising rights to the beloved bear cub from author A.A. Milne in 1930, had asked to examine the documents during the discovery phase of the Los Angeles lawsuit.

The Florida family is claiming Disney has cheated them out of hundreds of millions of dollars from their share of sales of Pooh-related videos, DVDs, computer software and theme-park attractions since 1983.

The total destruction - estimated at 400 to 500 boxes, including records from the years 1982 to 1997 - is 10 times bigger than even a Los Angeles judge thought when he sanctioned Disney for discarding boxes of files, court records report.

The destruction was so vast that the judge had to issue an injunction in May 2001 barring Disney from further destroying documents, which included one box labeled "Winnie the Pooh - legal problems."

The timing of this new disclosure is extra troubling to Disney's wholesome image because of the massive Enron scandal, where the bankrupt energy giant and its auditor, Arthur Andersen, have been accused of shredding documents vital to the probe.

Without even being asked, Daniel Petrocelli, Disney's outside counsel in the case, refuted any Enron comparison.

"This is not a situation like an Enron, where the other side discovers that the company has destroyed evidence. Just the opposite," Petrocelli said. "This is a case where Disney itself came forward to advise the court and the plaintiff that old obsolete files that had nothing to do with the case had been discarded years before."

But Bert Fields, representing the Slesinger family, said this disclosure is a "bombshell."

"What's so significant, especially in light of the Enron situation, is that there's this huge pattern," Fields said. "It's even more widespread and deep-rooted than we would have expected, and it continued after the judge was telling them to stop."

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