BBC News Online: Business

Disney sued over Pooh royalties

Winnie the Pooh and Christopher Robin, as drawn by EH Shepard

The family-firm Stephen Slesinger has alleged that Walt Disney has failed to pay $35m in royalties on unreported software and video sales of $3bn.

Walt Disney has rejected the claim, insisting that the products in question are not covered by its agreement with Stephen Slesinger.

Forensic accountancy

The dispute relates to Walt Disney's sales of Winnie the Pooh merchandise prior to 1991 when the lawsuit was first filed.

A court appointed team of so-called "forensic accountants" has since examined Walt Disney's accounts during the sample-years 1988 to 1994 to find out whether the media company has honoured its agreement with Stephen Slesinger.

The audit appears to support Walt Disney's side of the story, but the family-firm's lawyers are expected to call for a new audit to be done.

A judgement on whether the audit result will stand is expected to be taken by Judge Ernest Hiroshige this week or next.

Lucrative brand

Stephen Slesinger bought the Winnie the Pooh merchandising rights from the UK author A.A. Milne in 1929.

His first deal with Walt Disney was agreed in 1961.

"Disney has paid tens of millions to these participants. They have become enormously wealthy because of Disney's ability to fully exploit this property of Winnie the Pooh," Walt Disney's lawyer Daniel Petrocelli said.