Prospect Park has another lawsuit on its hands -- but this time the company is being sued by one of its founders. CEO Jeff Kwatinetz is seeking to have terms of his contract invalidated, terms that if breached could result in a $5 million penalty against him.
In another unusual legal move, one of the founding partners of Prospect Park is suing Prospect Park and an investment group to invalidate a non-compete clause contained in his contract.
In a complaint filed November 21, 2013, in Los Angeles County Superior Court, Jeff Kwatinetz is suing Prospect Park, and Boston-based ABRY Senior Equity IV, L.P.; ABRY Investment Partnership, L.P.; and ABRY Senior Equity Co-Investment Fund IV over a non-compete clause in his contract with Prospect Park.
ABRY invested in Prospect Park in December 2012 as part of Prospect Park's efforts to revive All My Children and One Life to Live as Internet-based series. Both shows are currently on an indefinite hiatus as a result of another lawsuit filed by Prospect Park
Kwatinetz is asking a judge to invalidate what he calls an "unenforceable non-competition and non-solicitation provision" in the contract that could prevent him from working for a company other than Prospect Park for five years. Additionally, the contract states that Kwatinetz is to work for Prospect Park for that five-year period with no compensation -- and there is a $5 million "damages penalty" that Kwatinetz could be hit with if he were to violate the non-compete clause.
The original, signed contract between Kwatinetz, Prospect Park, and ABRY calls for any legal matters to be handled in New York City. However, in Kwatinetz's suit, the talent manager and producer asserts that none of the parties involved in the agreement have a physical presence in New York, and that any legal wranglings in New York would be an attempt to circumvent California law.
Kwatinetz is looking to have the provisions in the contract invalidated and for recovery of his legal fees in the lawsuit.
Details of the lawsuit were first reported by Deadline.com
, which cites sources as saying that the lawsuit was prompted by a difference of opinion over the future direction of Prospect Park -- "[s]pecially, that disagreement has to do with the future of AMC and OLTL and whether they will continue or not." Kwatinetz is calling for the continuation of both All My Children and One Life to Live.
Deadline also reports that Kwatinetz doesn't necessarily plan to leave Prospect Park, but "wants to explore his options."
Neither Prospect Park nor ABRY Partners responded to requests for comment.
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