The lawsuit accuses Adam Fields, who was fired from the company in 2016, of violating a confidential arbitration process by publicizing an $8.4 million bankruptcy claim. Fields filed the claim against Relativity in bankruptcy court in New York last week. He included an arbitrator’s finding that Kavanaugh had concocted a memo accusing Fields of sexual harassment in order to justify Fields’ termination.
Kavanaugh’s suit, filed in L.A. Superior Court, claims that Fields improperly disclosed the claim and supporting documentation to Deadline, which first reported the story on Monday. Kavanaugh states that the allegation that he forged the memo is “patently false,” and accuses Fields of skewing the arbitration record by leaking only a portion of it, thus causing Kavanaugh reputational damage in excess of $50 million.
Fields was hired as co-president as the company was emerging from its first bankruptcy in the spring of 2016. He was fired a few months later and was accused of leaking information to the press. Fields filed a wrongful termination lawsuit, which was subsequently referred to arbitration.
Fields alleges that Kavanaugh disclosed 2,000 pages of material on the eve of the arbitration hearing, including the controversial memo. The arbitrator relied on computer metadata to conclude that Kavanaugh had likely falsified the memo, according to the arbitration record.
Kavanaugh’s suit includes various additional allegations against Fields, and defends Kavanaugh’s conduct at Relativity since the 2015 bankruptcy. The company filed for bankruptcy a second time in May. The U.S. trustee’s office has raised concerns that Kavanaugh appears to have paid himself $2.6 million for seven months of work in 2016, while the company was unable to raise funds and failed to file tax returns or pay certain other obligations.
In the suit, Kavanaugh claims he was actually owed $7 million in cure payments.
“While Kavanaugh received less than 3 million against his cure (where he worked for 1 dollar for years) his cure was never made whole and on top of close to 100 million dollars of his or his affiliate companies having a total loss on it’s (sic) investment his cure was never made whole, and he worked for zero salary from exit of the chapter 11 until he was no longer involved (sans sporadic cure payments which were made when the company determined they could be made) and yet less than 50 percent of his cure was paid,” the suit alleges.