Hearing on Monday will proceed despite CIT Bank’s claim that it needs more time to review Ryan Kavanaugh‘s plan to exit bankruptcy
Updated January 29, 2016, 5:25 p.m. PT: U.S. Bankruptcy Court Judge Michael Wiles rejected a request by Relativity Media lender CIT Bank to postpone the scheduled Monday hearing about the troubled studio’s reorganization plan. In a written order issued late Friday, Wiles denied the request “without prejudice to the right of CIT to raise objections at the February 1st Hearing if CIT believes at that time that it has been prejudiced.”
CIT Bank, which has loaned tens of millions of dollars to Relativity Media, is seeking a delay in a hearing next week to confirm CEO Ryan Kavanaugh‘s reorganization plan to exit bankruptcy, according to papers obtained by TheWrap.
In a letter to U.S. Bankruptcy Court Judge Michael E. Wiles on Friday, CIT asks that the hearing, scheduled for Monday, be moved back to at least Feb. 8, claiming that the stage has been set for a “grossly unfair confirmation hearing.”
“The Plan Proponents have set the stage for a grossly unfair confirmation hearing, apparently designed to deprive CIT of even the most basic information to prosecute its objections,” the letter reads.
CIT, which loaned money for the production of upcoming movies like the Kristen Wiig-Zach Galifianakis comedy “Masterminds,” claims that the plan’s proponents were required to file a memo in support of confirmation the plan by noon Thursday, which in itself would leave less than two business days to analyze and address the arguments raised by the memo.
However, the letter says, the first brief wasn’t filed until 6 p.m., and a second brief had not been filed as of 11 a.m. Friday morning.
The letter goes on to say that the plan’s proponents have “significantly revised and updated” the financial model that the plan is based on.
“Under bedrock principles of fairness and due process, CIT is entitled to a meaningful opportunity to review and vet this New Financial Model,” the letter reads.
Relativity denied CIT’s claims in a statement provided to TheWrap, calling the postponement request “unfounded.”
“We’ve continuously worked closely and in good faith with CIT to resolve their objections. Furthermore, we have received votes of acceptance for our Plan of Reorganization from the overwhelming percentage of our unsecured creditors while resolving the majority of the outstanding objections to our plan,” Relativity said. “CIT’s postponement request is unfounded, and we believe that continuing our path to emergence from chapter 11 remains in the best interest of all of our stakeholders.”
In their own letter to Judge Wiles, attorneys for Relativity asked Wiles to keep the Feb. 1 date for the hearing, saying that all of the lenders aside from CIT have voted to accept the plan.
They added, “CIT’s justifications for the delay are unfounded and overstated.” While Relativity apologized for the delay in filing its brief, they added, they cited accelerated negotiations as the deadline approached and wrote, “the delay was necessary and was in the best interest of all parties in this case.”
Pamela Chelin contributed to this report.