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Katzenberg Settles With Disney

Walt Disney Co. agreed to settle a longstanding $580 million lawsuit by its former studio chief Jeffrey Katzenberg, ending a high-profile legal feud between Katzenberg and Disney Chief Executive Michael Eisner.

Terms of the settlement weren’t disclosed.

Katzenberg’s fraud and breach-of-contract suit against the giant media company stemmed from a falling out between Katzenberg and his old boss, Eisner. Katzenberg left Disney in 1994 after Eisner declined to promote him to president following the death of Frank Wells in a helicopter crash.

Katzenberg, who went on to help form rival studio DreamWorks SKG, sued Disney in 1996, claiming he was owed a bonus of 2 percent of the expected future profits from the films and TV shows that he oversaw.

Disney’s decision to allow the bickering to be aired at a public hearing raised questions about Eisner’s judgment while he is preoccupied with trying to turn around Disney’s declining profits.

“The time has come to put this matter behind us and to focus on our new business initiatives,” Eisner said in a prepared statement.

(Bloomberg News)

Candidates Eyes Mayor’s Job

L.A. City Councilman Joel Wachs and real estate broker Steven Soboroff submitted papers declaring their interest in running for mayor in 2001.

Earlier this year, City Attorney James Hahn declared his candidacy for the office.

Wachs is an attorney who has served on the council for 28 years and made a name for himself on government efficiency issues. He placed third in the 1993 mayoral race.

Soboroff is an unpaid special advisor to Mayor Richard Riordan and currently serves as president of the Los Angeles Department of Recreation and Parks.

He also chairs the Proposition BB Oversight Committee, which is responsible for ensuring that $2 billion raised by the school improvement bond measure is allocated according to conditions approved by voters.

MGM Partners With Miramax

Metro-Goldwyn-Mayer Inc. said it will co-finance eight films with Walt Disney Co.’s Miramax Films unit, a move that both lightens MGM’s investment in film production and lends the struggling studio badly needed credibility in Hollywood.

The deal also allows Miramax to scour MGM’s 5,000-title library for potential remakes and sequels. The two studios will split production costs and they may bring in other financing partners.

Miramax, producer of commercial and critical successes such as “The English Patient,” will be in charge of developing and producing the films.

MGM, which has been unprofitable since 1996, hopes the deal will produce results similar to those that Miramax and Universal Pictures enjoyed when they teamed up on the Academy Award-winning hit “Shakespeare in Love.”

Litton Pleads Guilty

Two subsidiaries of Woodland Hills-based Litton Industries Inc. pleaded guilty in federal court to making hidden payments to gain nearly $200 million worth of defense business in Taiwan and Greece.

Litton Applied Technology Division and Litton Systems Canada Ltd. agreed to pay $18.5 million in fines, restitution, and investigative costs under a plea agreement with the U.S. Attorney’s Office. The units admitted altering their records to conceal more than $16 million paid to consultants who helped them win the contracts.

On another front, Litton said its proposed $529 million acquisition of Avondale Industries Inc. has received early approval from federal regulators, allowing the deal to be put to a vote by Avondale shareholders.

Street Filming Declines

Major production activity on Los Angeles streets declined by 6.6 percent during the first six months of this year, as studios continued an ongoing effort to cut back on filming activity.

The number of overall production days spent shooting films, television shows, commercials and music videos outside sound stages in L.A. County dropped to 14,076 through June 30, compared to 15,074 for the like period a year earlier, according to the Entertainment Industry Development Corp.

Feature film work declined the most, at 13.7 percent, while the number of production days for TV shows fell by 8.5 percent.

Smoking Ban Enforced

Los Angeles began enforcing a state workplace smoking ban by deploying two full-time inspectors to respond to complaints involving the city’s 3,000 bars and restaurants.

The state ban on smoking in such establishments took effect in January 1998. But L.A. has lagged in cracking down on violators, with no formal enforcement program.

After months of planning, two fire inspectors were assigned to monitor bars and eateries and to issue citations to owners, employees and patrons who break the ban. Fines start at $81 and can run up to $500.

WinAir Leaving Long Beach

Citing financial difficulties, WinAir Airlines announced it would cease operations in Long Beach as of this week.

The decision came as a blow to city officials, who had hoped the low-cost carrier with such short-haul destinations as Oakland, Sacramento and Las Vegas would revive the underused airport.

WinAir employed more than 200 people in Long Beach. Based in Salt Lake City, it began operating in Long Beach last November.

WinAir Chairman Larry Gelwix said the company had hoped to attract investment capital to grow and expand, but was unable to sustain operations after the funding failed to materialize.

House Approves Transit Bill

A transportation bill approved by the House of Representatives provides nearly $7 million to ease traffic congestion around Los Angeles International Airport and improve air quality by adding buses that emit less pollution.

If eventually reconciled with a separate Senate bill, the House plan would provide money for a system to adjust traffic lights to changing road conditions by linking closed-circuit television cameras to a control station using fiber-optic cables. The system would also be connected to message signs that would alert drivers to problems and feed up-to-the-minute traffic information to the LAX Web site.

Also included in the bill is money for the Municipal Transit Operators Coalition, a group of South Bay cities that has proposed using the funds to replace old buses with cleaner-fuel vehicles.

EarthLink Eyes Downtown

Internet service provider EarthLink Network Inc. is taking a look at leasing up to 500,000 square feet of space in downtown Los Angeles, where a surplus of space has produced affordable lease rates.

EarthLink, which is now headquartered in Pasadena, has reportedly looked at space near Union Station and in the Spring Street historic district.

Officials with the company, which employs 2,000 people, said no move is now planned, but they are reviewing their options if expansion is eventually needed.

The downtown office vacancy rate during the second quarter rose to 27.1 percent from 24.4 percent. A move by EarthLink would reduce that vacancy rate and likely serve as a magnet for other firms.

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