Relativity Media Bankruptcy Plan Faces Hurdles from Directors and Networks

by San Antonio Attorney

Relativity Media LLC intends to sell its assets as part of its bankruptcy.  But the Beverly Hills-based company is facing more and more resistance from Hollywood directors and networks who say the plan violates their rights.

There are over 20 objections filed in the Manhattan U.S. Bankruptcy Court by companies that have business involvements with Relativity.  Among those objecting are Viacom, Univision, HBO and A&E Television Networks.

The sale plan involves abandoning certain existing agreements that may be problematic to a new owner.  That part has made many companies worried as they are owed millions of dollars and they may not be able to get compensation once the deals are deserted.

In court papers filed by lawyers for film director Brett Ratner, it was stated that Relativity hasn’t informed them about how they will be affected by the sale.  The director’s objections brought up numerous films like “Skyline,” “Mirror Mirror,” and “Catfish,” whose future after the sale happens is unknown. It was also mentioned that the rights to “Catfish” television show may be one of studio’s greatest assets.

Another objection was filed by the Edward R. Pressman Film Corp. stating Relativity will probably fail to meet major commitments on a planned reprise of “The Crow.”  Relativity allegedly promised them a budget of about $41 million for production plus a release on 1,000 theaters that would cost an estimated $10 million to $12 million.

The sale plan is also facing resistance from a number of Paul Singer’s Elliott Management’s affiliates.  Though they were unsuccessful in their attempt to stop Relativity’s auction process, they are creating new obstacles to try to avert the sale.

The studio has recently obtained $45 million in bankruptcy funding from a group of lenders and an offer to eliminate $250 million in debt to acquire the company’s assets.

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