What happened to the festival? Former CEO sues film festival

After a season of turmoil and internal strife, Outfest was sued by its former CEO for defamation, harassment and discrimination.

Damian Navarro, in a lawsuit filed Friday in Los Angeles Superior Court, alleges that he repeatedly warned Outfest's board of directors, many of whom blamed him for its collapse, of the organization's dire financial situation, but it refused to take action. Some board members allegedly engaged in a campaign to discredit him and remove him as film festival president in retaliation for raising concerns about discrimination.

“As the first person of color to lead Outfest, I expected a place of belonging and shared values,” Navarro says. “Instead, I faced systemic racism, self-aggrandizement, and retaliation that undermined not only my leadership but the mission of the organization itself.”

In a statement, Outfest denied the “malicious and baseless allegations.” “Unfortunately, during Mr. Navarro's leadership, the Outfest Board of Directors decided that it was in the best interest of the organization to appoint a new CEO. We remain committed to this decision as the best course of action for the organization and look forward to resolving this matter in the legal proceedings,” she added.

Outfest — the long-running Los Angeles LGTBQ film festival once seen as a staple on the independent film circuit — collapsed last year when it laid off nearly all of its staff after some announced plans to unionize. Amid ongoing financial turmoil, it postponed the Legacy Awards, a high-profile fundraising gala that has traditionally seen a series of prominent Hollywood talent honored. This coincided with Navarro, whose contract was not renewed last year, stepping down to take a leave of absence Hollywood Reporter The aim was to allow a “full and impartial investigation” into the concerns he had raised about discrimination and harassment he had allegedly been subjected to by several board members.

In an email sent to donors in October, Outfest directors said the situation was “dire” while citing poor management.

“Recently, the Board of Directors was forced to take over the day-to-day operations of the organization and we discovered huge amounts of undisclosed debt that had been hidden from the Board of Directors,” the letter read, before adding that “Outfest is in serious financial jeopardy and urgently needs to raise $750,000.” “.

In the lawsuit, Navarro says the email defamed his reputation by alleging undisclosed debts hidden from the board, making him an “industry pariah.” He claims Outfest's bleak financial picture began long before he took over as CEO in 2019, and that he pleaded with the board to address these issues multiple times, serving as a “scapegoat.” [its] Special violations.”

The suit says Navarro inherited an organization with more than $250,000 in debt and years of declining membership and ticket sales, which were exacerbated by several unforeseen factors, including the COVID-19 pandemic, increased costs due to new California labor laws and rising venue expenses. He claims that during his first 18 months as Outfest's president, Navarro eliminated debt and dramatically increased revenue. However, the organization faced an impending budget shortfall (expected to reach $300,000 by March 2023) and cash flow problems that may require layoffs, according to the complaint.

But the board chose “to take no action despite increasingly poor financial reporting,” Navarro claims. He points to the leadership's refusal to reduce staff, ostensibly to “avoid negative publicity” during the writers' and actors' strike. At a meeting in March 2023, Navarro emphasized a budget crisis with enough reserves to cover payroll through May only to be ignored, the lawsuit alleges. In a letter to the board he sent the following month, he wrote: “Outfest needs to carefully manage its expenses to meet its financial obligations,” according to the complaint.

“Navarro has kept board members informed of the organization's finances every step of the way — with the board taking no action to shore up revenues or reduce expenses,” his attorney Rob Hennig wrote in the lawsuit filing.

Board members' duties to the organization include raising or donating at least $10,000 annually to Outfest. Navarro claims a majority of the board have “consistently failed” to meet that threshold, with board member Alexis Fish allegedly refusing to fundraise at all. Over the past two years, only 30% of board members have met minimum requirements, resulting in a budget shortfall of about $500,000, the lawsuit alleges.

Additionally, the complaint details a series of clashes between Navarro and several board members over alleged harassment and discrimination. In 2022, he raised several concerns about Outfest's alleged discriminatory practices affecting Latinos, as well as those that included himself. This prompted board members, including Fish and Valerie Stadler — who are all named in the complaint — to begin a “campaign of retaliation” aimed at undermining his leadership, the lawsuit alleges. Some alleged examples: inciting employees against Navarro by spreading false rumors about his impending termination, excluding him from board meetings, and launching a frivolous investigation into alleged inappropriate conduct. This included an investigation into his husband, who is not part of Outfest, allegedly flirting with a performer at an event and alleged discrimination by Navarro against female and black employees. Navarro claims that third-party investigations into the incidents conducted by Fromholz found no wrongdoing.

“Investigations against me were initiated in response to allegations that were unfounded and retaliatory in nature,” Navarro says. “The company found no evidence of discriminatory treatment on my part.”

The suit asserts that the board failed to investigate Navarro's allegations of discrimination or harassment.

The complaint also details allegations of self-dealing by board members. Navarro says Fish repeatedly tried to secure screenings of films in which she was directly involved and had a financial stake at Outfest, including a documentary about Susan Feniger despite her alleged work as the chef's business development director. In 2022, Stadler approached him to pitch a film for which she was an executive producer on Outfest's opening night. In response to the initiatives, Navarro raised concerns about conflicts of interest.

In August 2023, the board voted not to renew Navarro's contract as CEO “in a clear act of unlawful discrimination and retaliation,” the lawsuit alleges. He took a leave of absence in September, four months before his contract expired.

CEO Christopher Raxter is currently the only employee of the organization.

In December, Los Angeles Times I mentioned Outfest's collapse was largely due to Navarro's mismanagement. In response to allegations attributed to anonymous sources that he arranged without the organization's board approval to pay for actor John Waters' star on the Hollywood Walk of Fame, Navarro says there was “never an unauthorized transaction” and that it was agreed “transparently and with the board's knowledge.”

He also denied allegations that he kept board members in the dark about the use of a $700,000 real estate gift received by Outfest. “All grant-related expenses were properly documented and reported, and the board was regularly briefed on how the funds were being used,” he adds. “Any allegations of abuse or lack of transparency are false, as all financial decisions have been made in alignment with Outfest's mission and goals, with full oversight from the Finance Committee.”