A source told Deadline that Sherak, who was succeeded by Hawk Koch earlier this week, apparently tried to hire talkshow host Fallon for next year's Oscars, with Saturday Night Live creator Lorne Michaels as producer.
"When the idea came up of Fallon, we made it clear that we were not happy about that," a Disney insider told the publication. "It was ridiculous to think we would want to give him that big platform. We had no objection to Lorne."
The Oscars currently air on ABC, and Fallon's eponymous talkshow Late Night with Jimmy Fallon airs in competition with Jimmy Kimmel Live!
The responsibility of hiring the host and producer for the Oscars falls upon the AMPAS president.
A spokesperson for the Academy has confirmed that no host or producer has yet been hired for the broadcast.
The 85th Academy Awards will take place on February 24, 2013 at the Dolby Theatre (formerly the Kodak Theatre).
Photo gallery - 20 movies that dominated the Oscars: