Relativity Media who recently made 75 employees at varying levels of the company unemployed have today filed for Chapter 11 Bankruptcy (the files of which are available at the bottom of this page).
Eriq Gardner and Tatiana Siegel of The Hollywood Reporter described the sale as follows:
The studio is also officially up for sale. Relativity has reached agreement with an entity formed by some of its leading lenders, who will become “stalking-horse” bidders in an auction process handled by Blackstone Group. The auction hopes to close in October.
Relativity Sports, Relativity EuropaCorp Distribution (the film marketing and distribution joint venture between Relativity and EuropaCorp, USA) and Relativity Education were among those not included in the bankruptcy filing and are not part of the sale. Along with the Chapter 11 filing, Relativity says it has received a commitment for $45 million in debtor-in-possession financing provided by a group of unnamed lenders.
There’s been furious negotiations in recent weeks over Relativity’s pending slate of films. Sony terminated Relativity’s deal for U.S. rights to The Bronze, produced by the Duplass brothers, while other high-profile projects including Autobahn, Zach Galifianakis comedy Masterminds and Halle Berry action film Kidnap have been left hanging in the balance. On Wednesday evening, Relativity confirmed that it has relinquished domestic distribution rights to the Natalie Portman starrer Jane Got a Gun (it is unclear how much money changed hands for the filmmakers to buy back the rights to the film, which will likely land at The Weinstein Co.).
In a statement to the press, Relativity Media founder and CEO Ryan Kavanaugh said the following:
“Relativity continues to pursue its mission as a next-generation global media company, and we remain firmly committed to our film and television businesses,” Kavanaugh said in a statement. “The actions we are announcing today will protect our valuable franchise and allow us to emerge as a stronger, more focused company. Our board and management team explored a variety of options to refinance Relativity’s debt, and we ultimately determined that the protection afforded by a court-supervised reorganization process will provide additional time and structure to achieve our financial and strategic objectives.”
This news marks one of Hollywood’s biggest bankruptcies ever and is set to impact the wider film landscape too.