Concluding the first leg in what has become a protracted legal entanglement between Viacom and News Corp., a New York State Supreme Court judge ruled Wednesday that former Nick at Nite/TV Land chief Rich Cronin is barred from starting his new post with Fox Kids Worldwide until at least July 1.
In granting the motion for a preliminary injunction filed by MTV Networks, Judge Herman Cahn agreed that Cronin seriously and irreparably breached his contract with MTV when he was pursued by, and signed a deal with, Fox to serve as prexy and CEO of Fox Kids Network and Fox Family Channel upon the expiration of his MTV Nets pact on June 30,.
While Cronin has maintained that there was "nothing in my employment agreement that prevented me from signing with a future employer," his MTVN contract was nonetheless voided on Oct. 21. His termination was followed on Oct. 30 by the official hiring at Fox.
MTV Networks filed its lawsuit on Oct. 31 against Fox Kids Worldwide, parent company News Corp. and Cronin himself, charging that Fox sought to damage Nick at Nite and TV Land and steal Viacom Inc. trade secrets by luring Cronin.
With MTVN's victory in earning the preliminary injunction, Cronin is now officially trapped in legal limbo, unable to start a position that will pay him an annual base salary of more than $1 million, a signing bonus of $500,000 on his first day of employment, stock options and contingent and annual bonuses based on revenue and Cronin's achievement of certain goals, according to court papers.
But while a Fox Kids Worldwide press release touted that the ruling allowed Cronin to "begin his new position ... on July 1, 1998," that remains by no means a sure thing. A trial date to determine unspecified damages in the case is pending, and MTVN is known to be seeking a permanent injunction that could push Cronin's start date back still further -- possibly beyond Fox Family Channel's Aug. 15 launch.
In the meantime, Fox Kids is required through an indemnification clause to pay Cronin under the terms of his old MTV Networks agreement while the executive awaits the removal of his legal shackles. That pact carries a base annual salary of $375,000 as well as a $400,000 bonus due Cronin this month.
MTV Nets released a statement on the injunction that read, in part, "We're pleased that the court has vindicated our position ... As the decision says, 'Once Cronin entered into his employment agreement with Fox Kids, he could no longer be trusted to perform his duties at MTVN.' "
Fox Kids Worldwide did its best to place a position spin on the situation. The company's chairman and CEO, Haim Saban, said in a statement, "Our business plan always reflected the fact that Rich would be joining us in July, once his commitment to MTV Networks was satisfied."
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