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So what exactly is going to happen to Ryan Kavanaugh’s Relativity Media now that it has declared bankruptcy? Chapter 11 is not a death sentence for a company and many, such as GM, took the opportunity to restructure and came back stronger than before. But the experts doubt that this will be the case with Relativity.
As of now, the company is looking to be sold at auction. The eventual buyer will most likely be interested in the studio’s library of films and rights to future projects and not in keeping the 11 year old business alive, however.
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A number of planned projects, like a reboot of the 1994 cult film “The Crow, ” have already been scrapped.
U.S. Bankruptcy Court Judge Michael Wiles ordered that $8 million of available funds be used to pay off commitments to the various unions for what is owed to actors, producers and other unionized entertainment workers.
Variety reports that the Directors Guild of America, SAG-AFTRA and the Writers Guild of America all have lien rights on films like “Masterminds” and “Kidnap” that Relativity has not yet released.
It also reported that the company was forced to settle for a $9.5 million loan, instead of $45 in funds which it had hoped to get.
According to The Wrap, Relativity lost $135 million in 2013 alone.
Kavanaugh, who comes from a Jewish family which had changed its name from Konitz, posted a statement on the Relativity Media website which reads, in part:
“We remain firmly committed to our film and television businesses. As previously announced, we plan to release Masterminds and Kidnap. In our television business, Limitless, which is based on the Relativity movie starring Bradley Cooper, is slated to debut on CBS’ primetime lineup this fall. And we continue to leverage our MTV ratings hit Catfish by developing a number of international versions of the show, as well a planned sequel called Truce, which is currently in production. We will continue to move forward with a robust production slate of scripted and non-scripted shows during the reorganization process.
“I will continue to serve as CEO and Chairman of the Board, and Relativity’s senior core executive team remains in place. We intend to move through this process as quickly as possible. The Relativity that emerges from the Chapter 11 process will be better capitalized and have greater financial flexibility.”
