Kwatinetz Courting His Company

According to court documents obtained by Deadline Hollywood, the agreement, inked in December 2012, purports the company and investors ABRY Senior Equity IV, L.P., ABRY Investment Partnership, L.P., and ABRY Senior Equity Co-Investment Fund IV can force Kwatinetz to continue working for Prospect Park for the remainder of a five-year term and levy a $5 million penalty should he breach the contract.

The suit raises issue with several provisions of the agreement, which attempt to keep Kwatinetz from competing with Prospect Park should he leave, from hiring anyone away from the company, and from soliciting clients from the company.

Another provision states that Kwatinetz must stay with Prospect Park for five years and “devote all of his business time and attention to the operation and management” of the company but “shall not be entitled to any compensation for such services.”

The suit claims Prospect Park has tried to circumvent California law using contractual loopholes such as “if any of the restrictions or covenants contained in this article … is held to cover a geographic area or to be a length of time that is not permitted by applicable law … such provision will not be construed to be null, void, and of no effect.”

The contract also attempts to impose New York law and venue on the parties, even though it was negotiated in California, the suit says. Kwatinetz is seeking a declaratory judgment that several sections of the contract are unenforceable, along with costs and attorney’s fees.

This isn’t the only legal battle on Prospect Park’s plate.

The company is already engaged in some courtroom drama with ABC over soap operas “All My Children” and “One Life To Live.”

That fight may have spurred Kwatinetz’s complaint as he and ABRY apparently hold different opinions over the direction of Prospect Park and whether the soaps will continue, sources reportedly close to the matter told Deadline.

Kwatinetz formed Prospect Park in 2008 with former Disney chairman Richard Frank after leaving another high-profile management company he founded, The Firm.