Relativity files for Chapter 11, says “business as usual” for TV

Relativity Media has filed for bankruptcy, with assets including its film and TV divisions going up for sale. (Pictured: Relativity Television's MTV hit Catfish)
July 31, 2015

Relativity Media has filed for bankruptcy, with assets including its film and TV divisions going up for sale.

In a Chapter 11 filing made on July 30, the company listed estimated assets at between US$100 million-$500 million, while estimated liabilities were listed at between $500 million and $1 billion.

Relativity Media, founded 11 years ago by Ryan Kavanaugh, initially focused on producing films that would come in at a budget below $100 million, and utilized much-discussed mathematical formulas and risk-assessment computation to arrive at its roster.

Relativity Television, led by CEO Tom Forman, is behind MTV’s unscripted hit Catfish as well as Home Free, an eight-episode home renovation series recently premiering on Fox and assorted unscripted series airing on U.S. cable. The company says via a statement about its reorganization that it is continuing to leverage the former by “developing a number of international versions of the show, as well as a planned sequel called Truce, which is currently in production.”

The statement adds that the company’s television division will “move forward with a robust production slate of scripted and non-scripted shows during the reorganization process,” a statement reportedly echoed by Forman in an internal memo, in which he told staff that “for us, it’s business as usual… Quite simply, things in TV don’t change as a result of this process.”

Limitless, a scripted series based on the Relativity film starring Bradley Cooper, is slated for CBS’s primetime line-up this fall.

The top creditor listed in the Chapter 11 filing is media agency Carat USA, with a claim of $36,812,731. According to the filing, the claim is disputed.

The reorganization will not affect non-filing entities within the company including Relativity Sports, Relativity EuropaCorp Distribution (RED) and Relativity Education. The company has laid off 75 full-time staffers thus far and is winding down its fashion division, M3 Relativity.

The auction process for Relativity assets is “expected to conclude with a sale closing in early October 2015,” according to the statement. In the meantime, a group of its prepetition lenders, registered as RM Bidder LLC, will acquire all of the company’s assets and act as a “stalking-horse bidder” to propel the sales and auction process.

About The Author
Managing editor with realscreen publication, an international print and online magazine that covers the non-fiction film and television industries. Darah is an award-winning journalist who has spent over two decades covering a wide range of issues from real estate and urban development to immigration, politics and human rights, primarily with The Vancouver Sun. Prior to joining realscreen, she was editor of Stream Daily, realscreen's sister publication covering the dynamic global digital video industry. She also served a stint as a war reporter in Afghanistan for television and print, and was a national business blogger with Yahoo Canada.