Relativity Media files for Chapter 11: What you need to know
Relativity Media, the struggling film and television studio founded 11 years ago by media mogul Ryan Kavanaugh, has filed for Chapter 11 bankruptcy protection and is looking for a buyer.
Here are the details.
What’s happening to the company?
During the bankruptcy process, Relativity will continue to operate as it restructures its finances, the company said Thursday. The embattled company, which has been weighed down by $320 million owed to lenders, is pursuing an auction process for the studio.
The sale will not include Relativity Sports, joint venture Relativity EuropaCorp Distribution or Relativity Education, which were not part of the Chapter 11 filing.
The company said the auction process is expected to conclude with a sale closing in early October.
In the meantime, Relativity has secured $45 million in financing provided by a group of its lenders to help fund the company during the process.
“Relativity continues to pursue its mission as a next-generation global media company, and we remain firmly committed to our film and television businesses,” said Kavanaugh 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.”
Were there layoffs?
As part of the reorganization, Relativity has eliminated 75 full-time jobs, and will wind down its fashion division.
What about its movies and TV shows?
Relativity said it still planned to release the upcoming comedy “Masterminds” and its Halle Berry action film “Kidnap.” The fates of its other movies remain uncertain. Its television business’ “Limitless,” based on the 2011 Bradley Cooper movie, is slated to launch on CBS in the fall.
What happens to Kavanaugh?
Kavanaugh will continue on as the chief executive and chairman of Relativity.
Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder
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