LEGAL BATTLE BETWEEN INTELEFILM AND DISNEY RETURNS TO COURT

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(April 10, 2001) -- The 4 1/2-year legal battle between iNTELEFILM Corp., Minneapolis (formerly Children's Broadcasting Corp.), and The Walt Disney Co. and ABC Radio Networks contiues as the case returns to court to prove damages.

In 1995, Children's Broadcasting and ABC entered an agreement through which ABC would provide advertising sales, affiliate development and consulting services to the broadcaster. Children's Broadcasting sued the entertainment company and its radio network in the fall of 1996 alleging fraud, breach of contract for failure to sell advertising and develop affiliates, and misappropriation of trade secrets.

In 1998 a jury awarded Children's Broadcasting $40 million in damages -- $20 million for ABC's breach of contract, $10 million for its misappropriation of trade secrets and $10 million for Disney's misappropriation of trade secrets. The jury did not, however, rule on causation and damages, and Children's Broadcasting appealed the judgment. The appeal was heard by the 8th U.S. Circuit Court of Appeals, which granted a new trial to determine damages. -- Cara Beardi

Copyright April 2001, Crain Communications Inc.

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