Treasury Nominee Steve Mnuchin Blasts Relativity Fraud Claims: ‘Gratuitous and Insulting’

The former show business player and Trump administration hopeful responded to a lawsuit from RKA Film Financing, a lender to the barely-breathing movie company Relativity Studios, which claims the former board member and others misappropriated funds meant for promoting films.

RKA claims that Relativity borrowed money for P&A — prints, advertising and other costs related to promoting the release of its movies — and then used those funds instead to finance operations and pay executive bonuses.

“In reality, all of the Defendants knew that Relativity was a failing enterprise, and that, rather than financing P&A expenses, the P&A Facility was always intended to, among other things: pay salaries and bonuses of Relativity personnel, its contractual debts, and its other general corporate expenses,” the papers said.

RKA’s three rounds of investment in Relativity came over the course of a harrowing bankruptcy saga, in which the studio attempted to release films such as Kate Beckinsale’s “The Disappointments Room,” Halle Berry’s “Kidnap,” Kate Bosworth’s “Before I Wake” and “Masterminds.”