Updated with Mnuchin spokesman response: Did Steven Mnuchin help to dupe a bank consortium by persuading it to lend cash to Relativity Media to promote movies — while secretly knowing that it would be used to prop up the struggling studio’s operations before it filed for bankruptcy protection ?

That’s the charge that RKA Film Financing makes against President Trump’s nominee for Treasury Secretary and 11 other defendants including Relativity’s Ryan Kavanaugh in a suit filed last night at the New York State Supreme Court. (Read it here.)

The suit, alleging fraud and seeking $110 million in damages, revives allegations RKA made at the U.S. Bankruptcy Court after Relativity filed for Chapter 11 protection in July 2015. In 2014 RKA put up $81 million to help finance five Relativity films.

But the suit says it later discovered that the cash “was always intended” to pay salaries and corporate expenses, bail out other investors, and “provide Relativity a lifeline to continue operations and attract more unwitting investors.”

Mnuchin spokesman Barney Keller says that RKA “never once spoke with, corresponded with or otherwise dealt with Mr. Mnuchin.” He calls the allegations “preposterous” and the inclusion of Mnuchn in the complaint “gratuitous and insulting.”

He adds that on November 12 Mnuchin’s counsel warned RKA that he would “seek sanctions from the court” if  the company re-asserted the “baseless claims.”

“Mr. Mnuchin intends to follow through on that warning,” the spokesman says.

 

Mnuchin was Relativity’s Non-Executive Co-Chairman from October 2014 to May 2015, and “had for years shared a close personal relationship with Kavanaugh,” the suit says.

It adds that the Trump nominee “knew precisely how Relativity had intended to use these funds [from RKA], and actively conspired to conceal the scheme from RKA.”

What’s more, the suit charges that Mnuchin’s bank, OneWest, took $50 million out of the studio in late May 2015, just a few days before “Relativity first notified RKA that it had insufficient cash to fulfill the terms of the forbearance agreements.”

Relativity declined to comment on the suit.

Last year Kavanaugh called RKA’s charges “false and outrageous.” Relativity emerged from bankruptcy protection in April 2016, but recently furloughed most employees and lost President Dana Brunetti after two movies that were already in the can — Masterminds and The Disappointments Room — died at the box office.

On Wednesday the Senate Finance Committee supported Mnuchin’s nomination, giving the full Senate a chance to vote on whether to confirm.

Democrats on the committee complained that the nominee, at a January 19 hearing, provided incomplete and misleading answers to questions about mortgage foreclosure practices at OneWest — which Mnuchin ran from 2009 to 2015. They boycotted a committee meeting to approve Mnuchin’s nomination. Republican members prevailed after suspending a rule that requires at least one member of each party to be present at each meeting.