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Relativity Bankruptcy: Court Staves Off Chapter 7 For Now After Lawyer Claims Prospect Of Investors

Deadline logo Deadline 5/17/2017 Jeremy Gerard
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In a hearing this morning in New York bankruptcy court, arguments were heard whether to proceed with moving from Chapter 11 to Chapter 7 (liquidation). The result: A new hearing was set for August after lawyers for Ryan Kavanaugh said that there were prospects of possible equity investors and they were also anticipating monies coming from the Netflix deal on two films.

A Relativity lawyer who was piped in via speakerphone said they had concluded deals with certain creditors and feel that there is hope on the horizon. She pointed to significantly lowered overhead and renewed interest in the company over the past couple of months from potential investors. She said in 30 to 60 days they hope “to have a clear path forward and to conclude that path in 60 to 90 days.” The lawyer said that to make the prospective investor deals public could jeopardize the deals themselves.

When asked by the judge if the creditors claims were still outstanding, the lawyer for Relativity said, “We haven’t had people complaining.”

They said that they were expecting payments from Netflix on the two films the company has already delivered to them, Masterminds and the other was believed to be The Disappointments Room. “Both movies were delivered in the April-May time frame. They (Netflix) have made a payment on one of them already and the first payment on Masterminds should be this month.”

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