The bankruptcy hearing Friday for Relativity Media and its lenders was delayed until August 25 by U.S. Bankruptcy Court Judge Michael Wiles. The revised date resulted from “mutual negotiations” on behalf of the company and its secured creditors, the judge said.
Wiles expressed concern about the timeline presented at the initial July 31 hearing, and he indicated that a committee of creditors made the adjournment request.
Another $2.5 million loan (known as debtor-in-possession or DIP financing) for the studio to use in operational costs was also approved. The company had expected $10.5 million today, one individual with knowledge of the situation told TheWrap.
Relativity had no immediate response to the delay. Representatives for the stalking horse group have not yet returned TheWrap’s request for comment.
Tensions were high heading into Friday’s proceedings as the studio, its lenders and unsecured creditors each had agendas and preferred outcomes.
“There’s always this tension regarding the timing,” Robbin L. Itkin, a business restructuring expert from law firm Liner LLC, told TheWrap on Thursday. “You want enough time to get people truly interested, time to do their due diligence, but you don’t want to lose the offer you have.”
Judge Wiles is essentially granting that time to hear creditors pleas for a longer assessment period of Relativity’s value, in hopes of a competitive bidding scenario.
The one offer currently on the table is a $250 million stalking horse bid from a group of senior lenders — Anchorage Capital, Falcon Strategic Investments and Luxor Capital — that are owed roughly $361 million from the bankrupt studio.