×
You will be redirected back to your article in seconds

Relativity Lender’s $110 Million Lawsuit Dismissed

A judge dismissed a $110 million lawsuit on Thursday from a lender who claimed it was duped into pumping money into Relativity Media while it was heading toward bankruptcy.

RKA Film Financing filed suit in 2015, alleging that Relativity CEO Ryan Kavanaugh was a “con man” who had run his company like a Ponzi scheme. The suit claimed that Kavanaugh, as well as his officers and directors, had misappropriated money that was intended solely for P&A expenses, and used it instead to fund the company’s general operations.

In his ruling, New York Supreme Court Judge Charles E. Ramos found that RKA had failed to state its fraud claims with sufficient specificity. In particular, Ramos wrote that RKA had not identified anyone to whom fraudulent claims had been made.

Ramos also tossed a claim for negligent misrepresentation, finding that RKA and Relativity were both sophisticated parties with an arm’s-length relationship.

“Arm’s length transactions are ‘not of a confidential or fiduciary nature,’ and therefore do not create a duty for one party to impart correct information on another,” the judge wrote.

In a statement, a Relativity spokesman said the case had “absolutely no merit whatsoever.”

“It is very comforting to see the legal system work in a fair and equitable manner,” the spokesman said. “This is a perfect example of how media hype can spin molehills into mountains. … The press has had a field day with this lawsuit, and wrote lengthy and harsh articles which implied that Ryan Kavanaugh was somehow involved in the various nasty and vicious claims asserted by RKA. The press spun what amounted to nothing more than false words filed in the form of a complaint — something any person can do for a small court fee — into false claims that have no merit.”

Popular on Variety

More Biz

  • CBS Studios Exterior

    CBS Credit Union Manager Sentenced to 14 Years for $40 Million Fraud

    Edward Rostohar, the longtime manager of the CBS Employees Federal Credit Union, was sentenced on Monday to 14 years in prison for embezzling $40 million. The massive fraud left the credit union insolvent. It was shuttered and taken over by the University Credit Union, which assumed the accounts of 2,800 members. Rostohar pleaded guilty in [...]

  • United Talent Agency Reveals New Logo

    UTA Unveils New Logo, Corporate Image

    UTA raised the curtain Monday on a new corporate logo. The three-dimensional image is meant to emphasize the talent agency’s focus on uniting ideas, opportunities and talent. Building signage with the new logo will go up next month at UTA’s headquarters in Beverly Hills. “Our new identity captures the multiple facets and intersections of our [...]

  • Tribune Tower

    FCC Approves Nexstar Acquisition of Tribune Media

    The FCC has voted to approve Nexstar’s $4.1 billion takeover of Tribune Media, paving the way for Nexstar to become the nation’s largest owner of television stations with more than 200 outlets serving a wide swath of the country. FCC commissioners voted 3-2 to approve the merger agreement that was reached in December. Nexstar’s pact [...]

  • Endeavor co-founder Ari Emanuel

    Endeavor Aims to Raise $620 Million With IPO

    Endeavor disclosed Monday that it expects a price between $30 and $32 per share for its initial public offering in the fall. Endeavor — the parent company of WME, UFC, IMG, Endeavor Content, Professional Bull Riders and other assets — aims to raise as much as $620 million with the sale of 19.4 million shares. [...]

  • Overall View of the Rose Bowl

    One Dead, One Injured in Rose Bowl Parking Lot Shooting

    One person was killed and another was injured Saturday night following a shooting in a Rose Bowl parking lot, the Pasadena police confirmed. According to a statement from the police department, police responded to reports of a physical altercation and shots fired at 11:22 p.m. near the area of Arroyo Boulevard and Seco Street, where [...]

More From Our Brands

Access exclusive content