Relativity is in Chapter 11 but its CEO isn’t going down without a fight – at least in one lawsuit against him. Lawyers for Ryan Kavanaugh yesterday filed a motion to dismiss the $7.5 million complaint that RKA Film Financing brought against him and his River Birch Funds back on July 15. “RKA Film Financing, LLC commenced this action with a press release masquerading as a Complaint,” say documents submitted to the Supreme Court of New York State (read them here). “Ignoring the plain language of the agreements between it and River Birch and its own governing documents, RKA has launched a wholly unjustified attack on River Birch and its managing member, Mr. Kavanaugh,” the filings add. “The entirety of this litigation is without merit and improperly before the Court.”
Hitting RKA “for initiating a frivolous and improper Complaint,” Kavanaugh not only wants the case thrown out but is seeking sanctions against the plaintiff. Claiming that his “sole connection to this dispute is that he is a member of River Birch, which in turn is a member of RKA” the Relativity boss says he should never have been named in the matter and RKA did so in a search for publicity.
Of course, Kavanaugh and Relativity could use some good press themselves.
Last month, the 10% River Birch-owned RKA sued over what it claimed was misuse of P&A intended funds and a missed payment related to “extended loans” to Relativity affiliates. Another lawsuit for $90 million from RKA followed on July 24. That same day, Relativity swung back with a $200 million counterclaim on the latter lawsuit.
On July 30, the unstable Relativity filed for bankruptcy. Along with their heavy debts, the complex and convoluted deals and structure of the company were revealed as a Chief Restructuring Officer was named and Relativity faced the first of many hearings on the matter the next day.
In this latest and separate legal move, Kavanaugh and River Birch are represented by Roger Crane and Joanna Diakos Kordalis of the NYC’ offices of K&L Gates LLP. Benjamin Naftalis, Christopher Clark, Matthew Salerno and Eric Taffet of the NYC offices of Latham & Watkins LLP are representing RKA Film Financing.