Relativity Media Files for Chapter 11 Bankruptcy
Relativity Media announced Thursday it has filed for Chapter 11 bankruptcy and is for sale.
Divisions excluded from the filing and sale are Relativity Sports, Relativity EuropaCorp Distribution and Relativity Education.
The company has secured $45 million in funding for operational needs during the reorganization.
“As you may know, we have been working for some time to refinance our debt, and our Board of Directors and management team evaluated a variety of options,” CEO and founder Ryan Kavanaugh said in a statement. “After careful consideration, we ultimately determined that the Chapter 11 process was the best path forward to strengthen our balance sheet as we realign our operations.”
Kavanaugh will remain with the company as CEO and chairman, as will the senior core executive team.
The sale and auction of the company will be conducted by Blackstone Group LP and FTI Consulting and led by newly appointed chief restructuring officer Dr. Brian G. Kushner.
The sale of the company is expected to close in early October 2015.
As announced on Wednesday, Relativity will lay off 75 employees, none of which will affect the three divisions not in the filing.
The company also intends to wind down its fashion division M3 Relativity.
In the bankruptcy filing, Carat USA is listed as Relativity Media’s top creditor at $36.8 million (though marked as disputed). Palisades Mediagroup ($5.2 million), Cinram Group ($4.2 million), Technicolor Digital Cinema ($3.4 million), Technicolor ($3.1 million) and Cinedigm Digital Cinema ($1.9 million) follow as top creditors.
Relativity noted it still plans to release feature films Masterminds and Kidnap.
The company has had its hand in a batch of reality series including Catfish, which has a planned sequel Truce in production, and an upcoming CBS series based off its film Limitless.
Broadcasting & Cable Newsletter
The smarter way to stay on top of broadcasting and cable industry. Sign up below
By Kent Gibbons