Following disagreements between Disney CEO Michael Eisner and Pixar CEO Steve Jobs , Disney -- which owned the rights to make sequels to all of Pixar 's films up to `` Cars '' -- announced that a sequel to `` Monsters , Inc. '' would be made by Circle 7 Animation , which was also working on an early draft of `` Toy Story 3 '' .
Following disagreements between then-Disney CEO Michael Eisner and then-Pixar owner Steve Jobs , Disney ( who at the time owned the rights to make sequels to all of Pixar 's films until the movie `` Cars '' was released ) announced that a sequel to `` Monsters , Inc. '' would be made by Circle 7 Animation . Circle 7 were also working on an early draft of `` Toy Story 3 '' at the time .