"The November Man" - Los Angeles PremiereUPDATED, Wednesday, 10:36PM: Ryan Kavanaugh has come out swinging tonight in a statement about the lawsuit against him, saying he will not be paying the $7.5M vendor RKA says it’s owed. He also says, in essence, that it’s he who is being taken advantage of and victimized. Read it for yourselves:

“This lawsuit is ridiculous. I invested $10 million of my own capital into RKA, the entity that is suing me. My $10 million investment is the riskiest part of the capital structure and is subordinate to other capital,” he said. “There is no default on the loan or facility and there has been no improper use of loan proceeds. This is nothing more than other investors trying to take advantage of Relativity’s current restructuring being delayed and market noise to squeeze the $10 million I invested out of my pocket and into theirs.”

But he doesn’t stop there. Kavanaugh also says, “Unfortunately, the other investors involved, who have no claims, have gone so far as to threaten the company and sue others, and use threats of a lawsuit as fraud so that I will write them a check. Fortunately, neither I nor the company are worried about these frivolous claims from RKA. I will not be making any payment to RKA, especially considering that I have invested $70 million in Relativity over the past two years.”

No one drowns gracefully, and Kavanaugh’s Relativity is treading water … stay tuned.

PREVIOUSLY, Wednesday 3:53 PM: Relativity Media’s troubles continue to mount and the company struggles financially to make ends meet. CEO Ryan Kavanaugh has not only just been sued but now Deadline is hearing other news about Catalyst Capital — that it has sold off a significant portion of its purchase of loan-term interest to a group of hedge fund managers. One of the early investors in Relativity is Anchorage (an MGM investor), who is also said to be weighing its options now. They would not comment.

This continues to be a complicated story to report, given the elusiveness and secretive nature of all of the parties involved, and the fact that we want to be responsible, not reactive, and focus on verifiable facts in our reporting as Kavanaugh is continuing to try to stabilize his company and spin is everywhere.

Adding to Kavanugh’s money woes and public black eye is a lawsuit filed today in New York that claims the Relativity chief is in arrears over funds intended for P&A. In arrears to the sum of $7.5 million, claims plaintiff RKA Film Financing. Formed a year ago, the 10% Kavanaugh-owned RKA “extended loans” to Relativity affiliates for movie promotions. “Under the explicit terms of the contract governing the Loans, the Designated SPEs could only use these funds to finance the P&A of specific films,” says today’s filing (read it here). Well, looks like the funds were used for something else and Kavanaugh and his River Birch Fund agreed on June 5 to pay back the dough. Part of that deal was that a payment of the previously mentioned $7.5 million had to occur by June 29.

That payment seems not to have been made. Which means RKA was to get the equity Kavanaugh and River Birch had in the limited liability company. That hasn’t happened either it, seems.

“On July 14, 2015, counsel for RKA sent a formal demand letter to counsel for Defendants for the immediate transfer of the Kavanaugh RKA Equity Interest to RKA and for confirmation that neither Mr. Kavanaugh nor River Birch claim to maintain any interest in RKA,” alleges the complaint, which asks the court to grant them that equity. “To date, the Defendants have failed to respond to the July 14 Letter.”

RKA Financing reportedly was supporting the release of Masterminds — a film whose release Relativity has postponed repeatedly… purportedly because of the re-financing issue. Deadline was told by various sources that Relativity simply didn’t have the P&A money to release it.

In response, this statement was released to Deadline on behalf of Relativity by NY-based Brunswick Group: “In support of Relativity, River Birch Funds LLC, an entity owned by Ryan Kavanaugh, pledged an equity ownership interest in RKA. Unfortunately, Relativity’s payment to RKA was delayed as a result of the company’s pending refinancing. We expect this matter to be resolved shortly.”

Now for the Catalyst Capital issue. According to financial executives with knowledge of how these distress asset companies operate, Kavanaugh is at the end of the road. “If you were going to be a big player, you would not do this. They did it for a trade. If you were an equity guy, would you ever invest with all this negative press? Ryan has got all the distress guys here and what they do is perfect their leins and they foreclose. They lead them into bankruptcy. That’s what they do.”

Added another, “It seems like any lifeline for Ryan just went dead. I don’t know how you recover from any of this. Just the legal costs alone.” In other words, in the banking world it would be as if an underwriter does the entire deal and then starts selling off pieces. Catalyst has not confirmed or even returned repeated calls for comment. Catalyst is said to have sold off 50% to 75% of the term loan.

“It’s all all B.S. … all of it,” said another who thinks that Kavanaugh is juggling air as fast as he can.

Meanwhile, Relativity has reached out to other companies to partner on a number of films, including Masterminds and Hunter Killer. How any partnership deals would pan out is a question mark if and/or when the company heads into a Chapter restructuring.

Variety first reported the RKA Film Financing lawsuit.