Relativity Media CEO Ryan Kavanaugh is poised to reclaim control of his bankrupt studio with the exception of Relativity’s TV division run by Thomas Forman, individuals familiar with the proceedings have told TheWrap.
The new deal would represent a stunning turn of events for Kavanaugh, who two months ago was forced to file for Chapter 11 bankruptcy on his nine-year-old company.
Relativity Media declined to comment on the matter.
A stalking-horse group led by the company’s senior lenders is expected to emerge as the winner of a Thursday auction in New York for Relativity’ assets with a long-standing bid of $250 million. Once that sale closes, Kavanaugh “has a framework deal to purchase the assets — TV is not on the table — but not until he proves he has the financing for the purchase price,” an individual familiar with the terms said.
Kavanaugh’s bounty would include Relativity Studios, which counts movies like Nicholas Hoult‘s “Collide” and Rooney Mara‘s “The Sacred Scripture,” as well as projects in development like a planned reboot of “The Crow.” It also includes the company’s minority stakes in a sports management group, the for-profit Relativity Education and a joint film marketing and distribution entity with EuropaCorp.
The auction commenced Thursday morning at the New York offices of Blackstone Group and continued well past close of business, vetting offers for some or all of the assets included in the Chapter 11 filing.
The senior lenders — Anchorage Capital, Falcon Investments and Luxor Capital — were long expected to take the entirety of the mini-studio since no other bidders emerged for the entire company and the bids for parts of the company seemed unlikely to exceed $250 million.
An individual close to the senior lenders said they were “optimistic” about their bid and had a “vested interest” in keeping and recapitalizing Relativity TV, which produces such small-screen hits as MTV’s “Catfish” and CBS’ new scripted drama “Limitless.”
Relativity TV brought in a $96.6 million in revenues in 2014, and has managed to exceed revenue projections since the company’s bankruptcy filing, earning $22 million in the last two months. The division might also fit nicely with other entertainment companies in the lenders’ portfolios; Anchorage has a major stake in MGM.
At the time of the company’s Chapter 11 filing on July 30, Relativity reported $560 million in assets and nearly $1.2 billion in liabilities.