The troubled movie studio goes on, without Kevin Spacey.
A federal bankruptcy judge is allowing troubled movie studio Relativity Media to exit its nearly eight-month bankruptcy after Relativity secured a last-minute equity financing deal.
U.S. Bankruptcy Judge Michael Wiles approved the company’s reorganization plan in a court hearing Friday morning shortly after Relativity said it has secured $400 million in equity film financing from Maple Leaf Films—a part of U.K. investment firm Maple Leaf Capital Group. According to The Hollywood Reporter, the judge’s ruling to allow Relativity to exit Chapter 11 is dependent on the company finalizing paperwork for its exit financing and completing its acquisition of production company Trigger Street Productions.
The deal for Trigger Street includes the provision that the production company’s co-founder, Dana Brunetti, will join Relativity to run the studio along with CEO Ryan Kavanaugh.
Earlier this week, Relativity’s prospects for exiting bankruptcy looked to have taken a hit after the studio had to modify its reorganization plan due to a lack of financing and the decision by Brunetti’s fellow Trigger Street co-founder, actor Kevin Spacey, not to sign on to become chairman of Relativity once that deal is complete. Spacey, a high-profile name who seemed to lend more credibility to the studio’s future plans, said his plate was too full for a leadership position with Relativity.
Meanwhile, there was also concern that Relativity could not provide the $100 million in new equity it had promised the bankruptcy judge as part of its plan to exit Chapter 11. In addition to revealing the deal with Maple Leaf to finance future film projects, Relativity on Friday assured the court that it has locked up roughly $80 million in funding from MidCap Financial Trust and Kavanaugh’s financial partner, Joseph Nicholas, according to Deadline.
In a statement announcing the bankruptcy judge’s approval, Kavanaugh called the ruling “an important milestone” and said Relativity will exit bankruptcy “a stronger, well-capitalized media company that is well positioned for growth and success.”
Relativity’s bankruptcy has been a hot topic in Hollywood, where the studio’s meteoric rise in the early 2000’s resulted in big film hits such as The Fighter and Limitless, which helped turn Relativity into one of the top mini-major film studios in the industry. However, the company’s bankruptcy filing last July also revealed more than $1.2 billion in total debt versus assets of nearly $560 million. The Chapter 11 process also threw various film projects into uncertain territory, including the upcoming Masterminds, a comedy starring Kristen Wiig and Zach Galifianakis.
Friday’s ruling helps the studio erase hundreds of millions of dollars of that debt, but Relativity will still emerge from Chapter 11 carrying roughly $314 million in liabilities and access to just $84 million in cash.