Ryan Kavanaugh has officially announced the reclaiming of the bulk of Relativity Media’s assets, minus its robust TV department. In a statement Sunday, the company’s founding CEO and chairman also said that he, along with a consortium of investors, would emerge from the Chapter 11 process with only $30 million in debt.
Though it’s currently unknown how much funding Kavanaugh has raised to recapitalize Relativity, which includes film and music units, TheWrap previously reported the investment group includes Ron Burkle’s Yucaipa Investments, Elliot Management and the Toronto-based Catalyst Capital.
“My passion for Relativity is the same today as it was on the day I founded it. I want to thank our employees for their continued focus and dedication throughout the Chapter 11 process,” Kavanaugh said in a statement.
In a stunning turn of events, Kavanaugh leapt back into the battle for control of Relativity on Thursday after filing for bankruptcy on July 30. What’s more interesting is his claims that the majority assets will emerge from the process with only $30 million in debt. In the company’s Chapter 11 filing, it reported $560 million in assets and nearly $1.2 billion in liabilities.
“Relativity will emerge post-Chapter 11 with only $30 million in debt, a significant library and its business units fully intact,” a Relativity spokesperson said of divisions including Relativity Studios, Relativity Digital Studios, Madvine, Relativity Music, and the company’s minority stakes in a sports management operation, a for-profit education venture and Relativity EuropaCorp Distribution.
On Saturday, a group of Relativity Media’s senior lenders formally announced a winning bid of $125 million for the company’s TV assets, and hopes to spin off Thomas Forman’s unit as a solo company by October 20.
The TV division’s production stable includes MTV’s “Catfish: The TV Show” and CBS’ scripted drama “Limitless.” An individual close to the lenders previously told TheWrap they long thought the property to be the “crown jewel” in the nine-year-old studio’s portfolio.
“We are very pleased about the outcome of the auction and excited about beginning the process of further strengthening Relativity Television… we are confident that the business will be extremely well-positioned to achieve sustainable, long term success,” the investors — comprised of Anchorage Capital, Falcon Investments and Luxor Capital — said in a joint statement.
The asset division and sale will need final approval from U.S. Bankruptcy Court Judge Michael Wiles, whose next scheduled hearing is set for Monday in New York.
As for a formal reorganization plan from Kavanaugh and his financiers, an individual familiar with their timeline said a formal plan is expected in the near future.