After weeks of speculation, rounds of job cuts, but no success in attracting financial support, Relativity Media has applied to US courts for Chapter 11 bankruptcy protection. Its European production subsidiary, Paris-based EuropaCorp, was not included in the bankruptcy filing.
CEO Ryan Kavanaugh published a statement on the company’s website putting a very positive spin on the changes, which amount to being business as usual – unless you are owed money by the company.
Subject to court approval, the company will be sold via auction in a process similar to that used here by MediaWorks, which would see creditors take ownership of Relativity and allow the company to survive with a much-reduced debt. Relativity estimates its obligations to be between US$500 million and one billion dollars, a range which suggestions seriously sloppy accounting if nothing else. The proposed auction is likely to run until October.
Any changes at Relativity, which distributes via Roadshow in this part of the world, won’t have much effect here, whatever the result of its attempts to reshape. The company holds some video rights to Sngmoo Lee’s locally-made The Warrior’s Way (2010, fka The Laundry Warrior) and the James Cameron-produced Australian feature Sanctum (2011). It’s fair to say ongoing returns from either title are minimal.