Court Gives Relativity Media a Sale Deadline Extension

by San Antonio Attorney

Relativity Media has attracted many interested buyers.  The new deadline for bidding on the bankrupt Hollywood studio had been moved to Tuesday.

Brian Kushner, chief restructuring officer of Relativity Media, did not say how many entities are still looking at a formal bid for the entire or parts of the studio.  However, he said that the deadline was moved because several bidders requested for it.

The studio was founded and headed by Ryan Kavanaugh, who was behind the thriller “Limitless.”  Kavanaugh incurred a lot of debt and the studio was not making enough money.  The company filed for Chapter 11 bankruptcy in July.

So far, there has only been one bidder for the studio.  A group of creditors offered $250 for the company.

If another bid is placed, an auction will be held this week.  A winner will be announced on Oct. 5.

Kavanaugh and his board decided to sell the company because of its $500 million to $1 billion liabilities.  The company has estimated assets of between $100 million and $500 million.

A financing firm for films has filed a case against Kavanaugh accusing him of fraud.  The CEO was allegedly misusing funds allocated for the promotion and release of film slate. He denied the allegations.

Since May, when over $330 million was due to be paid, Kavanaugh, had been working intensely to pull in new investors and prevent a default.  A number of people in Hollywood are not surprised about Kavanaugh’s downfall.  In July, he had run out of time and Relativity filed for Chapter 11 protection.

Relativity is the beleaguered independent film and television studio behind such films as “Safe Haven” and “Limitless.”  More recent releases include box office flops like “Black or White” and “3 Days to Kill”.

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