3:44pm PT by Eriq Gardner
Relativity Media Cheers Bankruptcy Judge's Nod on Exit Plan
Relativity Media's exit from Chapter 11 bankruptcy wasn't looking good Tuesday morning when the judge pointed to lingering deal work and said that more time was needed. But the embattled studio is now counting on a comeback after the afternoon went much closer to plan with Netflix failing to convince the judge to sidetrack confirmation of a reorganization plan.
The judge still wants to make sure that funding and the involvement of Kevin Spacey and Dana Brunetti are locked up, but he has indicated his approval when all is said and done.
That's enough for Relativity chief Ryan Kavanaugh.
“Today we achieved an important milestone in Relativity’s path to emerging from Chapter 11 as a stronger, well-capitalized media company that is well-positioned for growth and success,” Kavanaugh said in a statement. “We sincerely appreciate the support of our financial partners and creditors, as well as the unrelenting dedication of our employees, which together have allowed us to successfully complete this process. We have a phenomenal management team in place, and we can’t wait to create Relativity’s new future.”
Relativity, which co-financed such films as Fast & Furious 6, Bridesmaids, Salt and The Social Network and produced its own mid-budget pics including Immortals and Limitless, filed its bankruptcy petition last July.
At the time, the studio was under crushing debt that had matured. Through the bankruptcy process, Kavanaugh's company has sold its profitable unscripted television division to some of its leading creditors and also come to settlements with other lenders including Cortland, RKA, Manchester and Macquarie. All told, the process has led to the reduction of $630 million in debt.
Backed by Joseph Nicholas, the company has said it has more than $100 million in exit financing to release new films including Kidnap and Masterminds. As part of the plan, Relativity still envisions raising about $100 million more in the next two years. But Nicholas has testified that there are new investors in the wings.
Relativity envisions releasing 22 films by 2018. That year, the studio projects $821.8 million in revenue and about $162 million in profit.