Ryan Kavanaugh Sued For Fraud By Relativity Investor Aug 17, 2017 19:30:58 GMT -6
Post by The Ultimate Nullifier on Aug 17, 2017 19:30:58 GMT -6
Ryan Kavanaugh Sued For Fraud By Relativity Investor
Relativity CEO Ryan Kavanaugh was sued today by one of his investors over monies that the plaintiff put into the struggling company, saying he was “fraudulently induced” into providing financial investment.
Carey Metz, a hedge fund investor, said in the complaint, “Kavanaugh desperately needed money to save Relativity from bankruptcy and to save his reputation and lifestyle, so [Kavanaugh] said whatever he thought would be persuasive, regardless of the truth, to entice Metz to lend Kavanaugh millions of dollars to put into Relativity.”
The 18-page filing in Los Angeles Superior Court (read it here) states that Metz already had invested $10 million in Relativity and an additional $2 million as a bridge loan in summer 2015. That loan was to be paid back within a year with 8% interest. Metz says in the lawsuit that he remains unpaid. Among the allegations in Metz’s suit are a number of “lies” that the Relativity topped told Metz to gain investment in the faltering company. Among those “lies” were that other investors were contributing additional funds; that the CEO already had raised $20 million himself; that billionaire Ron Burkle had invested $10 million to help the company avoid bankruptcy and wanted to increase his investment; that and IPO was on the horizon; and that the bridge loan provided on top of Metz’s $10 million investment would help stave off a Relativity bankruptcy.
The oral agreement between Kavanaugh and Metz for the bridge loan came about month before Relativity filed for Chapter 11 bankruptcy.
Attorney David A. Bovino of Bovino Carminati in Aspen, CO, is representing Metz in the suit, which alleges fraud, breach of contract and more and demands a jury trial.