Kwatiznetz formed Prospect Park in 2008 with former Walt Disney Studios president Rich Frank. In December 2012, three funds controlled by private-equity firm ABRY invested in the company, as part of Prospect Park’s efforts to resurrect ABC soaps “All My Children” and “One Life to Live” as online series.
Kwatinetz claims his new employment contract under the terms of the ABRY investments included an “unenforceable non-competition and non-solicitation provision.” That lets Prospect Park force Kwatinetz to work for the company for at least five years — for no compensation — and stipulates a $5 million “damages penalty” if the executive violates the non-compete terms, according to the lawsuit.
It’s unclear whether Kwatinetz is seeking to exit Prospect Park or mainly looking for leverage in negotiations with ABRY through the lawsuit.
The suit is the latest legal drama for Prospect Park, which is seeking at least $95 million in damages from ABC. Prospect Park claims the Alphabet net breached the terms of its agreement for the rights to produce new episodes of “All My Children” and “One Life to Live” by killing off certain “OLTL” characters and conspiring to merge that show with ABC’s “General Hospital.” Prospect Park’s production of the soaps is suspended pending that lawsuit’s outcome.
Kwatinetz filed the lawsuit Nov. 21 in the Superior Court of California for the County of California. The suit was first reported by Deadline.com.
A rep for Prospect Park declined to comment. ABRY Partners did not respond to a request for comment.