Roy Edward Disney, the nephew of Walt Disney whose commitment to his uncle’s creative spirit prompted him to mount revolts that led to the unseating of two of the company’s chief executives and a revival of the studio’s legendary animation unit, died Wednesday. He was 79.

Disney, who had been battling stomach cancer, died at Hoag Memorial Hospital Presbyterian in Newport Beach, according to Clifford A. Miller, a spokesman for Disney’s company Shamrock Holdings.

Disney toiled for years in the shadow of his famous uncle and his father, Disney Studios co-founder Roy O. Disney, who ran the business side of the company for his brother. But the quiet scion would emerge as a forceful protector of Disney traditions when he believed that the company that bore the family name was headed in the wrong direction.

“People always underestimated Roy,” Peter Schneider, the former president of Walt Disney Feature Animation, said recently. “You underestimate Roy at your peril, as many people have learned.”

As chairman of Disney animation, Disney helped guide the studio to a new golden age of animation with an unprecedented string of artistic and box-office successes that included “The Little Mermaid,” “Beauty and the Beast,” “Aladdin” and “The Lion King.” He was executive producer of “Fantasia/2000,” the sequel to the 1940 Disney classic, and the 2004 Oscar-nominated “Destino,” based on a 1945 collaboration between Walt Disney and Spanish painter Salvador Dali.

“I really credit Roy Disney completely with the renaissance of Disney animation, beginning with ‘Little Mermaid’ and all the way through that great amazing series of classic Disney films,” said John Lasseter, chief creative officer for Walt Disney and Pixar Animation Studios.

Nature filmmaker

Disney devoted the first 20 years of his career to working on nature films, including the Academy Award-winning True-Life Adventure features “The Living Desert” and “The Vanishing Prairie.” His 1959 short subject “Mysteries of the Deep” received an Oscar nomination. After the death of Walt in 1966 and Roy’s father in 1971, the younger Disney was spurned in his efforts to take a larger role with the company. He finally quit in 1977, but remained on its board as a director, where he was largely a figurehead.

Adrift, Disney hooked up with lawyer Stanley Gold and became a successful financier, investing in a variety of businesses that included broadcasting, soybeans and Israeli industrial concerns through Shamrock Holdings, a company named for one of Disney’s racing sloops. He served as chairman of the company, which has approximately $2 billion under management.

During the 1980s, Gold, Disney and Shamrock became one of the better-known corporate raiders, making unsuccessful hostile takeover bids for companies such as Polaroid Corp. and the Wherehouse Entertainment chain of music stores. Its takeover of Central Soya, a soybean processor in Fort Wayne, Ind., would yield a sizable $170-million profit for Shamrock and its partners with its subsequent sale to an Italian agricultural concern. Through investments, Gold sought to free Disney of his financial dependence on the Disney company stock he inherited. Most were successful, although Shamrock stumbled on some, particularly a money-losing investment in sneaker maker L.A. Gear.

By 1984, Disney had grown increasingly frustrated with the Walt Disney Co., which he likened to a real estate company that happened to be in the movie business. The company had let its feature animation film business, once the cornerstone of the company, deteriorate. The company, Disney would later say, had lost its creative drive.

“I said to him, ‘Roy, I think you’ve reached a point where you need to get all the way in or all the way out,’ ” Gold said. “He said, ‘What does that mean?’ I said, ‘You either need to sell your shares in Disney and go independent, or you need to put up a fight and get rid of the managers and find real managers for this business.’ ”

With his financial independence established from his investments, Disney pondered with Gold and a handful of other advisors what, if anything, they could do. Finally, a decision was made to try to unseat the company’s management, made awkward by the fact that Walt’s son-in-law, Ron Miller, was chief executive. Disney abruptly quit the company board in 1984, sending a signal to investors and Wall Street that something was amiss. The turmoil Disney ignited eventually swept the old management group from the corporate suites.

In the end, Disney, with an alliance formed with the billionaire Bass family of Texas, returned to the board and forced out the studio management, paving the way for the hiring of a new team led by Michael Eisner, Frank Wells and Jeffrey Katzenberg.

Upon taking over as chief executive, Eisner asked Disney what he wanted to do. Disney responded that he wanted to revive the company’s sagging animation division, where morale was rock-bottom as the company was releasing one of its worst-reviewed films, “The Black Cauldron.” Eisner granted Disney his wish.

Disney persuaded the new regime to invest about $10 million in a digital ink and paint system developed by Pixar, a seemingly minor decision that proved to be a turning point in the company’s fortunes. It would lay the foundation of Disney’s relationship with the firm that pioneered computer-generated animation. Within a few years, Disney turned out a remarkable string of animated hits. The films won critical acclaim and proved wildly lucrative as well, with money pouring into the company not only from the box office, but from the sales of T-shirts, toys and home videos.

“He was happy to sit in a room with a beer and a hot dog and talk about story ideas with us. He was that kind of guy,” said longtime Disney animation producer Don Hahn, who directed the new documentary “Waking Sleeping Beauty.” “He would walk through the halls, unannounced, and drop by and say hello. That kind of involvement was not only empowering but encouraging to us. . . . That gave us tremendous confidence, when we were making movies like ‘The Black Cauldron,’ that we could reinvent ourselves.”

Disney’s pet project, a new version of “Fantasia,” was released in 2000, initially in big-screen IMAX form. Like the original, “Fantasia/2000" blended animation inspired largely by classical music. Included were segments set to Gershwin’s “Rhapsody in Blue” and Ottorino Respighi’s “Pines of Rome.” Disney also included “The Sorcerer’s Apprentice,” the cornerstone of Walt Disney’s original, in the new version.

At the same time, relations between Disney and Eisner had grown increasingly strained, with the two men communicating mostly by phone and through e-mail. Tensions had been building since the 1994 death of the company’s president and chief operating officer, Frank Wells, which left Eisner solely in control of the company. Disney complained to confidants that he was being marginalized by the man he had helped install as chief executive.

By November 2003, Disney learned that the board’s four-member nominating committee was planning to leave his name off the slate of directors scheduled to be elected at the company’s next annual meeting. The longtime animation chief discovered he had been shut out of a Thanksgiving week screening of ideas for new animated films. The company had been in a prolonged financial slump, with its earnings flat and its stock performance anemic, but the snub was the last straw. Disney and Gold, his business partner, abruptly quit the board of directors in December 2003 and called for Eisner’s resignation.

In a stinging rebuke, Disney said that Eisner’s leadership had led to the perception of the company as “rapacious, soul-less and always looking for the ‘quick buck’ rather than long-term value.” Although the company’s problems were well-known, Disney’s public statement exposed the severity of his personal and professional rift with Eisner. A month later, Disney called on shareholders to cast a vote of no confidence in the top executive. Their efforts rallied a stunning 45% no-confidence vote for Eisner at the company’s 2004 annual meeting in Philadelphia, prompting Disney directors to remove Eisner as board chairman. Five months later, Eisner said he would retire when his contract expired in September 2006.

Disney did not relish the fight. In an interview with Fortune magazine, he described how he had summoned his four children to a family meeting where they sat together, holding hands, and agreed he should challenge Eisner. “His identity is more wrapped up in this company than you can imagine,” daughter Abigail E. Disney told the magazine in 2004.

Disney and Gold continued their fight with the Disney board with a May 2005 lawsuit that challenged as “a sham” the search process that resulted in the appointment of Eisner’s hand-picked successor as the company’s new chief executive, Robert A. Iger. The new chief executive quickly made peace with Disney, offered him an office at the company’s Burbank studios, a consultancy and the title “director emeritus.” Disney and Gold withdrew their lawsuit challenging Iger’s selection.

Born Jan. 10, 1930, in Los Angeles, Disney was the only child of Roy O. and Edna Disney. Growing up around the studio, Disney was exposed to both the joys of the Walt Disney aura as well as its darker side. In a 1999 Times interview, Disney recalled how his uncle came to see him when he had the chicken pox as a boy, enthralling him with a story he wanted to make into a film about a wooden puppet named “Pinocchio.”

“He scared me to death with the stuff about the whale and everything else,” Disney recalled. “I remember it very, very sharply and very clearly. But when the movie came out, it was a big letdown for me. It was nowhere near as good as Walt’s version.”

Yet his uncle and father fought bitterly at times, and for a while weren’t on speaking terms, communicating only through memos. In the 1999 interview, Disney recalled listening to the sounds of his father pulling into the driveway at night, trying to pick up on the subtle signs of whether it had been a good or a bad day with Walt. When the car door slammed, “you knew it was time to go do your homework,” he recalled. Eventually, Walt wrote his brother a touching letter to make up. He also gave him a peace pipe, which Roy E. displayed in his office after his father died.

After graduating from Pomona College, Disney initially spurned working for the studio, taking a job as a film editor on the television police series “Dragnet.” When he was laid off from that job, his father arranged a job at the company. In 1955, he married Patty Dailey, sister of boyhood friend Peter Dailey. The couple had two sons and two daughters. They divorced in 2007, after 52 years of marriage. He married the former Leslie DeMeuse in 2008.

Despite wealth estimated at $600 million, Disney remained shy and outwardly unpretentious, according to people who knew him. His main indulgences were a castle in Ireland, a jet, sports cars and financing a passion for sailboat racing. In 1999, Disney fulfilled a lifelong dream when he and the 12-member crew of his 74-foot sloop Pyewacket -- named for the witch’s cat in the 1958 film “Bell, Book & Candle” -- won the 2,225-mile Transpacific Yacht Race from Los Angeles to Honolulu, setting a course record.

A heavy smoker of unfiltered Lucky Strikes for much of his life, Disney quit the habit in his mid-60s after his first wife, Patty, was ordered by doctors to quit. Over the years he gave relatively few interviews, and only later in life began to feel comfortable making the kind of public appearances required of him for the company.

As a vice chairman of the studio’s board of directors, Disney would frequently appear at theme parks or help promote the company’s animated films. With his oval face, sloping nose, protruding ears and mustache, Disney resembled his uncle to the point where people in public would frequently approach him to ask if he was Walt’s brother.

Disney’s shyness belied a toughness that could surface when needed. He frequently wrote pointed memos about such things as animation projects, never hesitating to spell out what parts of a film he didn’t like. And he butted heads with former Disney Studios Chief Jeffrey Katzenberg, who Disney felt took too much credit for the studio’s animated hits.

Philanthropist

Among his philanthropic activities, Disney served on the board of trustees of California Institute of the Arts in Valencia, where he helped carry out the dream of Walt and his father to build and sustain a top arts college in Southern California. He was a major donor for the construction of REDCAT, the college’s experimental theater named for his parents that adjoins Disney Concert Hall. He also was chairman emeritus of the board of directors of the Peregrine Fund, which reflected his efforts to save the bird of prey that was the subject of his 1968 documentary, “Varda, the Peregrine Falcon.”

In addition to his wife, Leslie, and daughter Abigail, Disney is survived by another daughter, Susan M. Disney Lord; his sons, Roy P. Disney and Timothy J. Disney; and 16 grandchildren.

Funeral services will be private, followed by cremation. His ashes will be scattered at sea. Instead of flowers, donations can be made in his name to the California International Sailing Assn. to benefit youth sailing.

dawn.chmielewski@latimes.com

James Bates, who covered the Walt Disney Co. and wrote much of this obituary while a member of The Times staff, left the paper in 2007 and now works for Sitrick and Co., a public relations firm that represented Shamrock in its fight against the Disney board. He wrote the obituary several years before joining the firm.