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.