March 12, 2014 2:20pm PT by Eriq Gardner
ABC Countersues Soaps Producer for $5 Million
No soap opera lawsuit would be complete without a counterclaim.
In reaction to Prospect Park Network's $95 million lawsuit alleging ABC committed a "mega soap" fraud on One Life to Live and All My Children, the network has filed legal claims of its own over Prospect Park's alleged failure to make licensing payments.
ABC licensed the two soap series to Prospect Park two years ago. The plan was to relaunch the shows as web-only. One Life to Live ran as a 30-minute series on Hulu and iTunes until last September, when it was suspended after 40 episodes.
Earlier this week, Prospect Park filed for Chapter 11 bankruptcy and listed ABC as its top creditor with $1.7 million in money owed. The company continues to pursue a lawsuit alleging that ABC had second thoughts about giving away the soaps and attempted to sabotage the relaunch by borrowing characters to either kill them off on General Hospital or create a "mega soap."
The estimated $1.7 million owed could be understating the debt.
According to ABC's cross-complaint filed in L.A. Superior Court (see here), Prospect Park made licensing payments for the months of April, May and June of 2013, but only for All My Children the next two months and then nothing for either series thereafter.
ABC says the series fee for the first season alone was $8.5 million. Over the term of the license agreement, the money payable to ABC from Prospect Park was expected to exceed $145 million plus profit participation and merchandise distribution fees.
For now, ABC says it has suffered breach-of-contract damages of at least $5 million. The network is being represented by Susan Klein at Valle Makoff.