What happened to Outfest? Former Managing Director Sues Film Festival

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

Damien Navarro claims in a lawsuit filed Friday in Los Angeles Superior Court that he repeatedly warned Outfest’s board, several of whom blamed him for the collapse, about the organization’s dire financial situation, but it refused to take action seize. He claims that some board members launched a campaign to discredit and fire him as director of the film festival because he raised 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 encountered systemic racism, self-dealing, and retaliation that undermined not only my leadership, but the organization’s very mission.”

In a statement, Outfest rejected the “baseless and malicious allegations.” It added: “Unfortunately, during Mr. Navarro’s leadership, the Outfest board determined that it was in the best interests of the organization to hire a new executive director. We remain committed to this decision as the best course of action for the organization and look forward to resolving this matter through litigation.”

Outfest — the long-running LGTBQ film festival in Los Angeles that was once considered a staple of the indie cinema scene — collapsed last year when it laid off nearly all of its employees after some announced plans to form a union. Amid ongoing financial turmoil, the company postponed the Legacy Awards, its major fundraising gala that usually honored a number of high-profile Hollywood talent. This coincided with the resignation of Navarro, whose contract was not renewed last year, for a leave of absence, he says The Hollywood Reporter was intended to allow for a “full, unbiased investigation” into concerns he raised about discrimination and harassment he allegedly faced from multiple board members.

In an email to donors in October, Outfest directors said the situation was “dire” but suggested mismanagement.

“Recently the board 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,” the statement said, adding: “Outfest is in serious financial danger and needs to be addressed urgently Raise $750,000.”

In the lawsuit, Navarro argues that the email defamed him by claiming there were undisclosed debts hidden from the board, making him an “industry pariah.” He claims that Outfest’s dire financial situation began long before he took over as CEO in 2019 and that he pleaded with the board several times to address these issues, only to be made a “scapegoat.” [its] own misconduct.”

The lawsuit says Navarro inherited an organization with over $250,000 in debt and years of declining membership and ticket sales, caused by several unforeseen factors, including the COVID-19 pandemic, increased costs due to new California labor laws and rising Spending on venues, has been exacerbated. Within his first 18 months as head of Outfest, Navarro reduced debt and significantly increased sales, he claims. Still, the organization faced a looming budget deficit (expected to reach $300,000 by March 2023) and cash flow issues that would require staff layoffs, according to the complaint.

But the board decided “to take no action despite increasingly dire financial reports,” Navarro claims. He points to the leadership’s refusal to reduce staff, ostensibly to “avoid negative publicity” during the writers’ and actors’ strikes. At a meeting in March 2023, Navarro emphasized budget shortfalls, ignoring reserves sufficient to cover payroll through May, the lawsuit says. In a letter to the board sent the next month, he wrote: “Outfest must carefully manage its expenses to meet its financial obligations,” the complaint says.

“Navarro kept board members apprised of the organization’s finances every step of the way – without the board taking any action to protect revenues or reduce expenses,” Rob Hennig, his attorney, wrote in the filing.

Board members’ responsibilities to the organization include raising or donating at least $10,000 annually to Outfest. Navarro claims that the majority of the board has “consistently failed to meet” that threshold, with board member Alexis Fish reportedly refusing to fundraise at all. Over the past two years, only 30 percent of the board has met the minimum requirement, resulting in a budget deficit of about $500,000, the lawsuit says.

Additionally, the complaint details a series of disputes between Navarro and several board members over alleged harassment and discrimination. In 2022, he raised numerous concerns about Outfest’s alleged discriminatory practices against Latinos, including himself. This prompted board members, including Fish and Valerie Stadler – all of whom are named in the complaint – to launch a “retaliatory campaign” that aimed at undermining his leadership, the lawsuit says. Some alleged examples: inciting staff against Navarro by spreading false rumors about his impending termination, excluding him from board meetings, and launching frivolous investigations into alleged inappropriate behavior. These included an investigation into his husband, who is not part of Outfest, who allegedly flirted with an actor at an event, and alleged discrimination by Navarro against female and black employees. Third-party investigations into the Fromholz company’s incidents revealed no fault, Navarro claims.

“The investigation against me was initiated in response to allegations that were unfounded and retaliatory in nature,” Navarro said. “The law firm found no evidence of discriminatory treatment on my part.”

The lawsuit emphasizes that the panel 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 exhibitions of films in which she was directly involved and financially involved at Outfest, including a documentary about Susan Feniger, even though she was supposedly employed as the chef’s business development manager . In 2022, Stadler approached him to screen a film on the opening night of Outfest, for which she served as executive producer. In response to the overtures, Navarro expressed concerns about conflicts of interest.

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

Managing director Christopher Racster is currently the organization’s only employee.

In December the Los Angeles Times reported that Outfest’s collapse was largely due to mismanagement by Navarro. In response to allegations attributed to anonymous sources that he arranged for the organization to pay for actor John Waters’ star on the Hollywood Walk of Fame without board approval, Navarro says it was “never an unauthorized deal.” and that the agreement had been made. transparent with the knowledge of the board.”

He also denied allegations that he left board members in the dark about the use of a $700,000 estate donation Outfest received. “All expenses related to the grant were properly documented and reported, and the board was regularly updated on the use of funds,” he added. “Any allegations of abuse or lack of transparency are untrue as all financial decisions were made consistent with Outfest’s mission and goals and were under the full oversight of the Finance Committee.”