- Studio CEO and investors to pay $60 million for film assets
- Hedge funds get TV shows including `To Catch a Poacher'
Ryan Kavanaugh is holding on. The Relativity Media LLC founder and chief executive officer has found a way to keep control of his bankrupt movie studio and possibly allow stalled films including “Masterminds,” “The Disappointments Room” and “The Crow” to make their way into theaters.
Relativity went before a Manhattan bankruptcy judge Monday to seek approval of a plan that will help its TV unit exit bankruptcy as early as Oct. 20 through a sale to a group of hedge funds, while Kavanaugh keeps the rest of the company, which will have just $30 million in debt.
The plan was announced Sunday after no bidders emerged to top an initial $250
million offer for all of Beverly Hills-based Relativity’s assets and the leading bidder instead agreed to buy only the TV assets for $125 million.
U.S. Bankruptcy Judge Michael Wiles gave preliminary approval to the TV deal Monday but said he wanted more time to review the proposal in detail. He set another hearing for Tuesday. The reorganization of the film business is a separate matter for consideration at another time.
Relativity has produced, distributed or helped finance more than 200 movies that have generated more than $17 billion in box-office revenue and 60 Oscar nominations, according to its website. Those films include “Limitless” with Bradley Cooper and Robert DeNiro, and “Mirror, Mirror” starring Julia Roberts. But it has struggled to make money from its pictures.
In May, the company held up the release of its Sundance Film Festival acquisition “The Bronze.” “Masterminds,” a comedy with Kristen Wiig, Owen Wilson and Zach Galifianakis, was moved from the summer. The company filed for creditor protection in July, proposing to auction its assets.
Kavanaugh, 40, was joined in this weekend’s deal by VII Peaks Capital LLC, an investment management firm based in Orinda, California; OA3 LLC, a Los Angeles-based financial services firm; and an individual, Joseph Nicholas, to buy most of the company’s outstanding debt for $60 million, according to court papers.
A group known as “The Cortland Lenders” will continue to hold $30 million in debt.
Two other deals are part of the plan. The Cortland Lenders, which include Anchorage Capital Group LLC, Falcon Investment Advisors LLC and Luxor Capital Group LP, will get the TV business. Filings list 435 shows that are existing or in development, including “Lifestyles of the Rich and Famous,” “Cooking With Salt-N-Pepa” and “To Catch a Poacher.”
Creditor Manchester Securities, which had long objected to an asset sale, has also been won over. It agreed to buy Relativity’s bankruptcy operating loan for $35 million and withdraw its objections and appeals. The deal also gives creditors 45 days to probe claims against Manchester and related funds.
Court approval would allow Relativity Television to exit bankruptcy as a new, separate company, the Cortland Lenders said.
The case is Relativity Fashion LLC, 15-11989, U.S. Bankruptcy Court, Southern District of New York (Manhattan).