Relativity Media Says Creditors Support Reorganization Plan

by San Antonio Attorney

Relativity Media is getting closer to exiting bankruptcy as its creditors have approved the studio’s reorganization plan.

The representative of unsecured creditors committee said on Monday that they have agreed to Relativity’s bankruptcy plan and asks other unsecured creditors to approve the plan too.

Every creditor has to make its own autonomous decision as to whether the reorganization plan is satisfactory to that creditor prior to voting.

The company’s CEO, Ryan Kavanaugh, said that they have been collaborating with everyone involved in the bankruptcy case and hoped that Relativity will exit from bankruptcy in early 2016.  The studio has many movies slated for release and expects to implement their strategies with flexibility once the bankruptcy process is over.

The bankruptcy judge will still have to confirm it on Feb. 1.

Relativity sought for Chapter 11 bankruptcy protection in July, and since then it has been watched by Hollywood very closely.  The group of unsecured creditors was created Aug. 7 and started planning on a $250 million bid, sale of Relativity and debtor-in-possession financing terms.

Creditors had previously obstructed Kavanaugh’s bankruptcy efforts and it took months before Relativity reached a deal with the committee, the stalking horse bidders and entities that wanted to buy the television business with a $125 million initial offer.  As part of the agreement with creditors, Kavanaugh would revolve the restructuring of the company around his remaining businesses in film, music and sports and associated assets creating new equity capital and debt.

Relativity Studios is working to release a variety of films for 2016.  The projects include Masterminds, The Disappointments Room, Strangers 2, Kidnap, and Before I Wake.  Moreover, the studio is slated to start production on a highly anticipated remake of The Crow in March.

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