Sweet ending: Winnie the Pooh

Los Angeles, March 31 (Reuters): A California judge on Monday threw out a lawsuit that could have cost Walt Disney Co. hundreds of millions of dollars from Winnie the Pooh product sales, saying Disney’s foes lied and stole evidence.

Stephen Slesinger Inc, the family firm suing Disney, “is dishonest and shows no remorse,” Los Angeles Superior Court Judge Charles McCoy wrote in his decision. He ruled that Slesinger’s actions threatened the integrity of the legal system and the 13-year-old case should be dismissed as punishment.

The Slesingers, who had won sanctions earlier in the case against Disney after it destroyed documents, promised to appeal and said they were considering a new case.

But two outside lawyers agreed the decision would be hard to overturn and that a new case would be difficult at best. Disney attorney Daniel Petrocelli was categorical. “It is all over. After 13 years the Winnie the Pooh case is finally over,” he said.

The legal victory comes as Disney executives, including chief executive Michael Eisner, are drawing fire over claims they mismanaged the company. Disney had said a loss in the Pooh case could have cost it hundreds of millions of dollars.

Literary agent Stephen Slesinger bought US merchandising rights to the honey-loving bear from British author A.A. Milne in 1930, and his family later partnered with Disney to build the character into a lovable icon whose merchandise outsells Mickey Mouse, with more than $5 billion of sales yearly.

In 1991 the family sued Disney saying the Burbank, California media company had reneged on a promise to pay royalties on Pooh videos and short-changed it on other fees. McCoy did not address Slesinger’s charges, saying instead in a 28-page opinion that the case was so tainted by the Slesingers’ conduct that it should not go to trial.