The damages could be worth more than �150m($250m).

A judge ruled against Walt Disney and said Jeffrey Katzenberg did not surrender his bonus payments when he quit the media company.

Disney had argued that he forfeited his right to a lucrative bonus when he left his job as head of the company's film unit without exercising a two-year contract extension.

Judge Paul Breckenridge's ruling means the courts must now decide how much Mr Katzenberg is owed.

Mr Eisner: Refused to make Mr Katzenburg company president

He could receive as much as $250m in bonuses based on a 2% participation in income from films, television shows and merchandise sold during his 10 years at Disney.

Over the moon

Mr Katzenburg was described as "thrilled, thrilled, thrilled" with the decision.

"It's been a long time for him and to finally have the judge say, 'you were right' was gratifying," a friend of his said.

In 1984, Mr Katzenberg joined the organisation as head of Walt Disney Studios, overseeing film and television show production.

During his time in the job, the studio enjoyed tremendous success with animated films like 'Beauty and the Beast' and 'The Lion King'.

He left in 1994 when Disney chairman Michael Eisner refused to name him president of the company. Mr Katzenberg went on to co-found the DreamWorks studio with David Geffen and Steven Spielberg.

Judge's ruling

A key section of the judge's ruling said Mr Katzenberg was entitled to a portion of the income from "self-sourced" merchandise, products made by Disney as opposed to those made by third parties under license from Disney.

The ruling opens up a new category of income to include when deciding how much money he is owed, an amount that will be determined when the second phase begins on 1 June.

The judge also said the former Disney boss might be entitled to interest on income earned starting in October 1994, the date on which he believes Disney breached its duty to pay him.

The executive had only asked for interest starting in October 1996.