A U.S. Bankruptcy Court judge approved the sale of Relativity Media’s television business on Tuesday, putting the company behind such shows as CBS’ “Limitless” and MTV’s “Catfish” in the hands of a group of hedge funds.
The new owners include Anchorage Capital, Luxor Capital and Falcon Investment Advisors. They will pay $125 million for the business and plan to reinvest and rechristen the company. The three hedge funds collectively are owed more than $360 million by Relativity.
In addition, the court approved the sale of $35 million in debtor-in-possession financing to an affiliate of hedge fund Elliott Management. That money had been used to fund the company’s operations while it was in Chapter 11.
There are other decisions still pending before the court. Company founder and CEO Ryan Kavanaugh has a proposal to buy the rest of the bankrupt company, which includes a film studio and stakes in the company’s education and sports representation business. His backers include VII Peaks Capital, investor Joseph Nicholas and the Ron Burkle-backed investment firm OA3.
They will pay $60 million to purchase parts of Relativity Media and will assume another $30 million in debt, according to court filings. The Kavanaugh-led group’s deal is scheduled to close later this month. A plan for reorganization that would see Kavanaugh retain his title as CEO and chairman, and guide the company out of bankruptcy will get hammered out by December or January, attorneys for Relativity said.
Relativity filed for Chapter 11 protection during the summer, citing $1.2 billion in liabilities and assets with a book value of just $560 million.
There was a hearing Monday to approve the television business sale, but a decision was delayed a day until the company’s creditors had a chance to read the sales agreement and other filings. Tuesday’s hearing was a brisk affair. There were only a few objections raised related to television rights to the Relativity film “Act of Valor” and liens that Technicolor has on certain films. The order was revised to those parties’ satisfaction.
In his ruling upholding the television sale, U.S. Bankruptcy Court Judge Michael Wiles praised attorneys for the creditors and Relativity for working around the clock through the weekend.
“Hopefully everyone can get some sleep tonight,” he said.