Ryan Kavanaugh and his former business partner, Elon Spar, have settled their dispute concerning Kavanaugh’s Entertainment Stock Exchange, also known as ESX.
News broke on Friday that Spar, who once served as CEO of Kavanaugh’s exchange, had filed a lawsuit in Los Angeles Superior Court accusing Kavanaugh of fraud and claiming that Kavanaugh persuaded him to go into business with him under false pretenses. Kavanaugh, meanwhile, filed a lawsuit accusing Spar of breach of contract and unfair competition.
“Ryan Kavanaugh, along with his company ESX, and Elon Spar and his team have satisfactorily resolved all of their issues,” they said in a joint statement Friday.
The dispute had centered around Kavanaugh’s ESX, in which moviegoers can invest in individual Hollywood studio films, much like Wall Street investors do.
Kavanaugh’s plan is not the first of its kind. Previously, the Hollywood Stock Exchange (aka HSX) allowed fans to invest simulated money in the performance of individual films. The platform was eventually bought by financial services firm Cantor Fitzgerald, where Spar used to work.
In February — fresh off his second bankruptcy of Relativity — Kavanaugh and his new company Proxima Media approached Cantor Fitzgerald and Spar about acquiring HSX.
Kavanaugh hired Spar as CEO of ESX after forming the company, but the two parted ways in May.
In his lawsuit, Spar had accused Kavanaugh of running a Ponzi scheme. However, after reaching the resolution Friday, he said that Kavanaugh has been funding the ESX by himself.
“To my knowledge, based on information provided to me, Ryan has and is investing heavily in this business, and any reference to ESX or any related business as a ‘Ponzi Scheme’ is not accurate,” Spar said in the statement. “He is a visionary thinker and I wish him the best of luck in his future endeavors. He and I have no remaining disputes.”