What happened to Outfest? The former top executive of the film festival sued for its downfall

After a season of turmoil and internal strife, Outfest's former executive director has sued for defamation, harassment and discrimination.

Damien Navarro, in a lawsuit filed Friday in Los Angeles Superior Court, claims he repeatedly warned OutFest's board of directors, many of whom blamed him for the organization's dire financial situation, but it refused to take action. He alleged that some board members campaigned to discredit and remove him as head of the film festival in retaliation for raising discrimination concerns.

“As the first person of color to lead OutFest, I hoped for a place of belonging and shared values,” Navarro said. “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 decided it was in the best interest of the organization to bring in 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 the legal process.”

OutFest — the long-running Los Angeles LGBTQ film festival that was once a fixture on the indie cinema circuit — collapsed last year when it laid off nearly all of its staff after some announced plans to consolidate. Amid ongoing financial turmoil, it has suspended the Legacy Awards, its marquee gala fundraiser that usually sees a series of high-profile Hollywood talents. That coincided with Navarro, whose contract was not renewed last year, stepping down for a leave of absence, which he said The Hollywood Reporter He is to allow a “thorough, unbiased investigation” of concerns raised about discrimination and harassment that he has been accused of by multiple board members.

In an email to donors sent in October, OutFest directors called the situation “horrendous” 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 a large amount of undisclosed debt that was hidden from the board,” the message said, before adding, “OutFest is in serious financial risk and urgently needs to raise $750,000.”

In the lawsuit, Navarro argues that the email defamed him by claiming he had undisclosed debts hidden from the board, making him a “pariah in the industry.” He alleges that Outfest's bleak financial picture began long before he took over as executive director in 2019, and that he has repeatedly urged the board to address the issues, only to be made a “scapegoat.” [its] own misdeeds.”

The suit states that Navarro inherited more than $250,000 in debt and years of membership and ticket sales, which increased due to a number of unforeseen factors, including the COVID-19 pandemic, increased costs due to California's new labor laws and rising venue costs. In his first 18 months as head of OutFest, Navarro eliminated debt and substantially increased revenue, he claims. Still, the agency faces an open budget deficit (expected to reach $300,000 by March 2023) and cash flow problems that will require layoffs, according to the complaint.

But the board elected to “take no action despite increasingly dire financial reports,” Navarro alleged. He pointed to management's refusal to cut staff “to avoid negative publicity” during the writers' and actors' strike. At a March 2023 meeting, Navarro stressed the budget crunch with enough reserves to cover payroll through May, the lawsuit claims. In a letter to the board the following month, he wrote, “OutFest must carefully manage its costs to meet its financial obligations,” according to the complaint.

“Navarro kept board members updated on every step of the organization's finances — the board took no steps to increase receipts or reduce expenses,” his attorney, Rob Hennig, wrote in the filing.

Board members' responsibilities to the organization include raising or donating at least $10,000 annually to Outfest. Navarro complained that the majority of the board had “consistently failed” to meet this threshold, with board member Alexis Fish refusing to raise funds. Over the past two years, only 30 percent of the board has met minimum requirements, resulting in a roughly $500,000 budget shortfall, the lawsuit claims.

Additionally, the complaint details multiple confrontations between Navarro and multiple board members over alleged harassment and discrimination. In 2022, he raised numerous concerns over OutFest's alleged discriminatory practices affecting Latinos, as well as including himself. That prompted board members including Fish and Valerie Stadler — all of whom are named in the complaint — to begin a “campaign of retaliation” aimed at undermining his leadership, the suit claims. Some alleged examples: inciting employees against Navarro by spreading false rumors of his impending resignation, excluding him from board meetings, and launching frivolous investigations into alleged inappropriate behavior. That included an investigation into her husband, who is not part of OutFest, allegedly flirting with an actor at an event and allegations of discrimination by Navarro against female and black staff members. A third-party investigation into the events at the Fromholz firm found no wrongdoing, Navarro claimed.

“The investigations against me were initiated in response to allegations of a baseless and vindictive nature,” Navarro said. “The firm found no evidence of discrimination on my part.”

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

The complaint also alleges embezzlement by board members. Navarro said that Fish repeatedly tried to secure screenings of films directly involving him and that he had a financial stake in OutFest, including a documentary about Susan Feniger, even though he was hired as the chef's director of business development. In 2022, Stadler approached him on the opening night of Outfest to show a film in which he was an executive producer. In response to the overture, Navarro raised concerns about conflicts of interest.

In August 2023, the board voted not to renew Navarro's contract as executive director “in clear conduct 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 Raster is currently the sole employee of the company.

In December, Los Angeles Times reported that the collapse of OutFest was largely due to Navarro's mismanagement. In response to claims attributed by anonymous sources that he arranged without the approval of the company's board to pay for actor John Waters' star on the Hollywood Walk of Fame, Navarro said there was “never an unauthorized deal” and that the deal was made “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 received at OutFest. “All expenditure related to the grant was properly documented and reported, and the board was regularly updated on how the funds were being used,” he added. “Any claims of abuse or lack of transparency are not true, as all financial decisions were made under the full supervision of the Finance Committee, in line with OutFest's mission and goals.”