Relativity Media CEO Imparts His Plan to Retain Control Over Film Operation

by San Antonio Attorney

Ryan Kavanaugh, Relativity Media’s CEO announced that he and certain lenders have the necessary funds to keep the studio running, but excluding the television operations.

At the same time, a group of creditors that included Falcon Investment Advisors, Luxor Capital, and Anchorage Capital made their own announcement of what it revealed yesterday in a court filing that it was the top bidder for the television operation of Relativity Media.  The group placed a bid of $125 million for the business after pulling out its $250 million offer for the whole company.

A U.S. Bankruptcy Court hearing is scheduled tomorrow before Judge Michael Wiles.  He is overseeing Relativity’s plan to exit Chapter 11 bankruptcy.  He is expected to approve a plan no matter what it is.  However, before he does, he is going to verify that Kavanaugh can afford to purchase the movie assets and also manage them.  The assets Kavanaugh intends to buy would consist of production and distribution, except four films.

Ron Burkle is reported to be among Kavanaugh’s financial backers.  He may have decided to stick with Kavanaugh to stop the CEO from suing Colbeck Capital for breach of fiduciary duty.

According to reports, Kavanaugh and his associates plan to pay $95 million to reimburse providers of the debtor-in-possession loans, and also the balance of senior secured debt.  Come Oct. 20, the deal would be closed and the debt will be swapped for equity.

Kavanaugh said that he will remain as Chairman and CEO of Relativity.  He also said their plan will take the company out of bankruptcy with a remaining debt of $30 million, but its business units will still be intact.

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