Relativity Media Co-President Ryan Kavanaugh will have to arbitrate his case alleging that a former fellow company executive violated a confidential arbitration process by publicizing an $8.4 million bankruptcy claim, a judge ruled Thursday.
Los Angeles Superior Court Judge Elizabeth Allen White said Kavanagh was bound by an agreement with former Relativity Co-President Adam Fields, who the plaintiff hired and fired in March 2016, to settle employment disputes in arbitration.
In a change from her tentative ruling, the judge said Kavanaugh will have to pay the costs of arbitration because Relativity is in bankruptcy.
The judge put the case on hold pending the outcome of the arbitration.
Kavanaugh’s suit, filed in June 2018, alleges that Fields improperly disclosed the bankruptcy claim and supporting documentation to a celebrity website that went on to report the story. Kavanaugh alleges is damages are more than $50 million.
The only remaining cause of action in Kavanaugh’s complaint is for abuse of process. However, his attorney, Mark Fields, said after the hearing that he plans to reinstate his client’s contract claims that had previously been dropped.
After he was fired, Fields filed a wrongful termination lawsuit also referred to arbitration.
Beverly Hills-based Relativity Media was founded in 2004 by Kavanaugh and businessman Lynwood Spinks. While the bankruptcy that began in May 2018 proceeds, the studio remains open for business and is now being operated by its new parent company, UltraV Holdings.