Former Maker CEO sues firm

The former CEO of Maker Studios is suing his fellow co-founders and Ynon Kreiz, the one-time Endemol chief who took the reins of the US YouTube channels management specialist last month.

Danny Zappin has lodged the lawsuit against Ben Donovan, Lisa Donovan and Kreiz, along with Maker investors including Time Warner, alleging that through a series of financial shenanigans they forced him out.

Zappin appeared to step down graciously last month, recognising that in the wake of the US$36m third round of funding the firm raised at the end of 2012, Maker needed a new kind of leadership.

“After much thought and discussion with Ynon, my co-founders and the board, I am happy to announce that I will be stepping down as the Maker Studios CEO. Ynon, our executive chairman, will now be taking over my responsibilities and operational oversight of Maker,” he wrote in a memo in May.

Zappin went on to say he would continue to work with Maker and Kreiz in an advisory capacity to “make sure everything goes smoothly,” but yesterday this “transition phase” hit a major bump.

The lawsuit filed by Zappin and several other former Maker staff accuses the two Donovans, Kreiz and investors of concealing secrets, breach of fiduciary duty and constructive fraud.

The writ alleges these parties “conspired” to remove Zappin from the Maker board around June 22, having earlier “fraudulently induced” him to approve changes to the firm’s stock set-up as part of a scheme to “oust” him.

Maker has responded with a statement saying: “The lawsuit is without merit and the allegations are baseless. We regret that Danny is taking this step and involving the company he co-founded in litigation.”

The case is the latest intriguing twist in the development of one of the companies at the forefront of the emerging YouTube channels management business, which has been the subject of a flurry of investment and M&A activity over the past 12 months.

Yesterday, Europe’s RTL Group made its first major play in the space, paying €27m (US$36m) for a 51% stake in BroadbandTV.

For C21’s recent in-depth interview with Danny Zappin, click here. The article is part of a special season about the evolution of YouTube and the multi-channel content network business.