What happened to Outfest? Ex-executive director sues film festival

After a season of unrest and internal conflict, Outfest has been sued by its former director 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 of directors, some of whom blamed him for the collapse, about the organization’s dire financial situation, but that it refused to take action. He claims that some board members have waged a campaign to discredit and remove him as head of the film festival 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 encountered systemic racism, self-dealing, and retaliation that undermined not only my leadership, but the mission of the organization.”

In a statement, Outfest denied the “baseless and malicious claims.” It added: “Unfortunately, during Mr. Navarro’s leadership, the Outfest Board of Directors decided 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 in legal proceedings.”

Outfest — the long-running LGTBQ film festival in Los Angeles that was once seen as a fixture on the indie cinema circuit — collapsed last year when it laid off nearly all of its staff after some announced plans to unionize. Amid ongoing financial turbulence, it has postponed the Legacy Awards, the major gala fundraising event that usually honors a range of high-profile Hollywood talent. This coincided with Navarro, whose contract was not renewed last year, stepping aside for a leave of absence, he says. The Hollywood Reporter was to allow for a “full, unbiased investigation” into the concerns he raised about discrimination and harassment he was allegedly subjected to by multiple board members.

In an email to donors sent in October, Outfest directors said the situation is “dire” while pointing to mismanagement.

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

In the lawsuit, Navarro argues that the email discredited him by claiming secret debts were hidden from the board, making him an “industry pariah.” He claims that Outfest’s bleak financial picture began long before he took over as executive director in 2019 and that he begged the board several times to address these issues, only to be made a “scapegoat for (his) own malfeasance .”

According to the lawsuit, Navarro inherited an organization with more than $250,000 in debt and years of declining membership and ticket sales, which was exacerbated by several unforeseen factors, including the COVID-19 pandemic, higher costs due to new California labor laws and rising location costs. Within his first 18 months as head of Outfest, Navarro eliminated debt and significantly increased revenue, he claims. Yet the organization faced a looming budget deficit (expected to reach $300,000 by March 2023) and cash flow problems that would necessitate staff layoffs, according to the complaint.

But the board has chosen “to take no action, despite increasingly dire financial reports,” Navarro claims. He points to the leadership’s refusal to cut staff, reportedly to “avoid negative publicity” during the writers’ and actors’ strikes. At a meeting in March 2023, Navarro highlighted the budget crisis, where reserves were enough to cover payroll costs through May but then ignored, the lawsuit alleges. In a letter to the board sent the following month, he wrote: “Outfest must carefully manage its expenses to meet its financial obligations,” the complaint said.

“Navarro kept Board members informed of the organization’s finances every step of the way – with the Board of Directors taking no action to increase revenues or decrease expenses,” wrote Rob Hennig, his attorney, in the file.

The board members’ duties to the organization include raising or donating a minimum of $10,000 annually to Outfest. Navarro claims that the majority of the board has “consistently failed” to meet this threshold, with board member Alexis Fish allegedly refusing to raise money at all. Over the past two years, only 30 percent of the board met the minimum requirement, resulting in a budget deficit of approximately $500,000, the lawsuit alleges.

Additionally, the complaint details a series of clashes between Navarro and multiple board members over alleged harassment and discrimination. In 2022, he raised numerous concerns about Outfest’s alleged discriminatory practices affecting Latinos, as well as a practice in which he himself was involved. This prompted board members including Fish and Valerie Stadler — all of whom are named in the complaint — to launch a “retaliation campaign” aimed at undermining his leadership, the lawsuit alleges. Some alleged examples include inciting staff against Navarro by spreading false rumors about his impending dismissal, excluding him from board meetings and launching a frivolous investigation into alleged inappropriate behavior. This included an investigation into his husband, who is not part of Outfest, allegedly flirting with an actor at an event and alleged discrimination by Navarro against female and black staff members. Third-party investigations into the Fromholz company incidents have found no error, Navarro claims.

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

The lawsuit emphasizes that the board failed to investigate Navarro’s claims of discrimination or harassment.

Also detailed in the complaint are allegations of self-dealing by board members. Navarro says Fish repeatedly tried to get exhibitions of films she was directly involved in and had a financial interest in at Outfest, including a documentary about Susan Feniger, despite her reportedly working as director of business development for the chef . In 2022, Stadler approached him about showing a film in which she was an executive producer on the opening night of Outfest. 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 alleges. He took a leave of absence in September, four months before his contract expired.

Executive Director Christopher Racster is currently the organization’s sole employee.

In December the Los Angeles Times reported that Outfest’s collapse was largely due to mismanagement by Navarro. In response to claims 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 there was “never an improper deal” and that the agreement was concluded “transparently with the knowledge of the board.”

He also denied allegations that he kept board members in the dark about the use of a $700,000 estate gift Outfest received. “All expenses associated with the grant were properly documented and reported, and the board was kept regularly informed of how the funds were being used,” he added. “Claims of abuse or lack of transparency are untrue as all financial decisions are made in accordance with Outfest’s mission and objectives, under the full supervision of the Finance Committee.”