LEGAL SOAP OPERA UPDATE: ABC Calls $25M Prospect Park Suit “Baseless”

UPDATE, 1:08 PM: Almost a week after producer Prospect Park sued ABC for more than $25 million over alleged broken agreements and claims of trying to sabotage the online launch of All My Children and One Life To Live, the network finally has responded. ABC says the suit is “baseless” and that it will defend itself legally. Read the brief full  statement here:

“ABC remains very supportive of the on line launch of both ‘One Life to Live’ and ‘All My Children.’ With respect to Prospect Park’s lawsuit, we believe the claims are baseless and we will defend them vigorously in court and not the press.”

PREVIOUSLY, APRIL 18: One week before Prospect Park is set to launch online soaps All My Children and One Life To Live, the production company today filed a breach of contract lawsuit against ABC, (read it here) which licensed the shows two years ago to Prospect Park, the company of Jeff Kwatinetz and former Walt Disney Studios president Rich Frank. In the complaint, which was filed today in LA Superior Court, Prospect Park claims that ABC has been breaking the licensing agreement and sabotaging Prospect Park’s efforts to continue AMC and OLTL online. Requesting a jury trial, the suit seeks damages of at least $25 million from Disney-owned ABC. ABC had no comment.

The lawsuit won’t derail plans for the AMC and OLTL relaunch April 29. “These shows will go forward, and Prospect will address its rights in Court,” the suit said. “Regardless of how successful Prospect may be, the fact remains that ABC did not deliver what it promised, Prospect did not get what it paid for, and Prospect is now entitled to recover millions of dollars in damages for ABC’s egregious conduct.”

The lawsuit follows a couple of months of building-up tensions and threats of legal action between Prospect Park and ABC over the OLTL actors who had been starring on ABC’s General Hospital since the cancellation of OLTL by ABC. Prospect Park attempted to get them back, which created a stand-off with ABC. The last straw came last week when ABC announced that OLTL‘s Kristen Alderson, Michael Easton and Roger Howarth will return to GH on May 10, presumably as new characters. According to the lawsuit, after taking over AMC and OLTL in 2011, Prospect Park, in “a gesture of good will”, allowed ABC “to borrow seven OLTL characters to appear on a limited basis” on the network’s soap General Hospital for the actors playing them can have employment. The suit says that, despite having the characters on a temporary basis, ABC signed the actors playing them in long-term deals, making their return to OLTL difficult and “effectively removing any incentive for them to do so.” (Howarth recently made a short-term deal with Prospect Park to do a stint on OLTL before returning to GH.) Prospect Park claims that in the arrangement with ABC, they retained “approval rights over ABC’s use of the OLTL characters. But “for over a year, ABC outright failed and refused to consult with Prospect on any storylines involving these characters, rendering Prospect’s approval rights meaningless.” With that, “in the ultimate act of bad faith, ABC inexplicably killed off two OLTL characters (Cole and Hope Thomas) on loan to GH by having their car forced off a cliff. ABC effectively killed another OLTL character Tomas Delgado, who was not even licensed to ABC, “and made it near impossible to keep him without alienating the fans” by “claiming” that this long-standing OLTL character is in fact another character on GH.

Prospect Park also claims ABC breached the two sides’ licensing agreement by refusing to hand over to Prospect Park the URLs for the two soaps the company had purchased, onelifetolive.com and allmychildren.com. “These URLs are not only critical to establishing public awareness for the re-launch, but they are part of the rights paid for by Prospect. The lawsuit also claims that ABC recently threatened not to air ads for OLTL because they feature an actor who is now playing a new role on GH. Prospect Park claims that it made “repeated overtures” to ABC to “resolve these issues amicably,” which were rebuffed by the network.

Despite the fact that ABC retains some ownership in AMC and OLTL under the 2011 licensing agreement, Prospect Park argues that ABC is trying to sabotage the two shows. The complaint claims that “at least one ABC executive” involved in the decisions to how to handle OLTL actors on GH, “has openly declared his desire to see Prospect fail” and suggests that the network’s actions may be driven by “a basic fear of embarrassment if Prospect succeeds.” The company still hopes that the sides’ dispute can be settled.

Prospect Park is represented in the suit by Michael Weinsten and Daniel Gutenplan of L.A. firm Lavely & Singer.

Deadline’s Dominic Patten contributed to this report.