New York Supreme Court has decided that U.S. Secretary of the Treasury Steven Mnuchin (who is also American banker, film producer, and former hedge fund manager) is completely clear of a fraud lawsuit that he was dragged into as a result of his business partnership with Relativity Media.
In 2015 RKA Film Financing sued Ryan Kavanaugh, Steven Mnuchin, and several other people, saying that they misled that company into lending Relativity Media tens of millions of dollars for print and advertising expenses and its money was misappropriated.
Mnuchin’s OneWest Bank conferred about $160 million to Relativity years ago, which in the end led to his joining the board as co-chairman. RKA claims that he knew its funds were being misappropriated, particularly since he had a “close personal relationship” with Kavanaugh (CEO of Relativity Media).
This March, Mnuchin asked the court to dismiss him from the lawsuit, contending that since he didn’t interact with RKA during his short stint as a Relativity board member, he can’t be responsible for what others did.
“RKA alleges that Mnuchin learned of Kavanaugh’s scheme to market a supposedly low risk P&A facility to investors and to subsequently misappropriate those funds during his time as a non-executive director of Relativity. However, absent substantive allegations that Mnuchin was responsible for, aware of, or participated in the purported fraud surrounding the Funding Agreement, liability cannot attach. … Further, RKA does not sufficiently establish that Mnuchin was aware of the alleged misrepresentations and their implications. Mnuchin’s personal friendship with Kavanaugh is insufficient to establish awareness or liability. Absent a fiduciary or heightened duty, Mnuchin had no obligation to disclose the purported misconduct surrounding the Funding Agreement or the subsequent payments relating to it. In any event, RKA does not allege that he was privy to it” — writes Justice Charles E. Ramos.
Ramos also decided that even if Mnuchin knew about indicated misconduct regarding the agreement, RKA failed to prove he had an obligation to reveal that data to them.
In addition, Ryan Mnuchin had asked the court to issue sanctions against RKA for all expenses and charges, but the court denied that request finding that they were “unwarranted absent evidence of frivolous conduct.”
Source: hollywoodreporter.com
