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UPDATE 1-U.S. film studio Relativity Media files for bankruptcy
July 30, 2015 / 8:58 PM / 2 years ago

UPDATE 1-U.S. film studio Relativity Media files for bankruptcy

(New from paragraph three, adding details on company and bankruptcy process)

By Tom Hals

July 30 (Reuters) - U.S. film studio Relativity Media LLC, which counts the award-winning “The Fighter” among its films, filed for Chapter 11 bankruptcy protection on Thursday and said it would pursue a sale of the company to a group of its lenders.

The company also said in a statement that it has received a commitment from its lenders to provide $45 million to help fund the company’s operations while it is in bankruptcy.

The company was founded in 2004 by Ryan Kavanaugh, who built a career financing films, and hailed itself as a “next-generation” studio engaged in financing, distribution, music publishing and sports entertainment.

The company’s films include “The Fighter,” which won two Oscars, and “Immortals,” but also the poorly received “3 Days to Kill,” starring Kevin Costner. The company said it plans to release the films “Masterminds” and “Kidnap” and its television unit’s “Limitless” will debut on CBS later this year.

Kavanaugh will remain as the company’s chief executive and chairman, and senior management will remain in place, according to a statement.

However, the company said it eliminated 75 full-time staff and it plans to wind down its fashion division, M3/Relativity.

“Regrettably, as a result of the need to reduce costs, we have had to make some difficult staffing decisions,” said Kavanaugh in a statement.

The company has an agreement to sell its assets to RM Bidder LLC, the entity formed by its lenders, which Relativity did not identify. The bid from RM Bidder will be tested at an auction that will be supervised by the U.S. Bankruptcy Court in Manhattan.

Relativity said it had hired Blackstone Advisory Partners LP and FTI Consulting Inc to oversee its bankruptcy and sale process.

The case is In re: Relativity Fashion LLC, U.S. Bankruptcy Court, Southern District of New York, No. 15-11989 (Reporting by Tom Hals in Wilmington, Delaware and Jonathan Stempel in New York; Editing by Chris Reese, Bernard Orr)

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