I think the student made one big mistake here: he didn't ask why (or at least, didn't disclose the answer to such a question). Aside from legal threats that appear to hold little if any merit, there's no reason this student should have let his career end. Irrespective of the choices he made, let this be a lesson to many. When you're talented and smart, you have much more leverage than you think. You have to go beyond the bs and if not to eliminate it, at least justify why someone is trying to harm you.

P.S. This doesn't just apply to "Hollywood," it happens everywhere.