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'General Hospital' Cheated, ABC Sued by Creators' Heirs

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By Stephanie Rabiner, Esq. on April 28, 2011 9:50 AM

It may have made it through the recent soap opera cancellations, but ABC's General Hospital is far from being off the hook.

The daughters of the husband and wife team that created the longest running soap opera on television are now suing ABC, claiming that, through fraudulent accounting, the network withheld a large chunk of royalty payments from the pair's company.

As part of the original General Hospital-ABC contract, Frank and Doris Hursley were awarded 10% of net profits from domestic syndication, foreign syndication, and any ancillary rights, such as merchandising, reports Courthouse News Service.

The pair's daughters claim that, over the years, ABC has used improper "Hollywood accounting" methods to scam their parents' company out of these profits.

They are now suing for breach of contract, breach of implied covenant of good faith and fair dealing, and asking for an accounting and owed profits.

The entire General Hospital-ABC lawsuit rests on accounting methods--whether they were valid or not.

In the U.S., profit accounting and other financial calculations must be conducted via accepted methods to hold any weight. These methods are called the Generally Accepted Accounting Principles (GAAP). Though not law, courts and other institutions generally require that the principles be followed.

The plaintiffs will have to prove that they weren't.

Since this has allegedly been going on for years, you may be wondering why the plaintiffs didn't sue under the General Hospital-ABC contract earlier. The complaint states that the network refused to allow the women to conduct a full audit or provide any information until late 2010, reports Courthouse News Service.

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