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Relativity Gets Minimum Bankruptcy Bid From Its Lenders: $250 Million

It was just a little more than a year ago that supporters of Relativity Media had floated the idea that the film- and TV-maker could be valued in an initial stock offering at $6 billion to $10 billion. Now the senior lenders who have taken control of the company in bankruptcy have made a minimum bid for Relativity: $250 million.

The stalking horse offer on behalf of Anchorage Capital Group, Luxor Capital Group and Falcon Investment Advisors is meant to set a floor for the auction of the company, which the three hedge funds hope will go for considerably more. But experts who have been kicking the tires of the failed entertainment concern have told Variety that they don’t see much value in a studio that has put out a string of mostly underperforming films and failed to build a substantial movie library.

The senior investors — which, alone, are owed some $361 million — have set a Sept. 16 for an auction of the company or its pieces, with results to be reviewed at a hearing at the U.S. Bankruptcy Court in Manhattan five days later. It’s virtually certain, however, that others owed money by the company founded by Ryan Kavanaugh will seek to slow the process, in hopes of recovering some of their unpaid bills. Unsecured creditors have racked up $89.9 million in credits against Relativity. The company has a total of nearly $1.2 billion in liabilities, against assets it put at $560 million.

The minimum sales price and schedule for the auction are outlined in recent court filings by Relativity’s bankruptcy counsel at the firm of Jones Day.  The court documents also set up the following proposed scheduled:

*Sept. 3: Expression of interest by parties that want to get some or all of Relativity. Would-be owners also required to present proof of their ability to finance a deal to bankruptcy advisers at Blackstone Group.

*Sept. 11: Submission of bids.

*Sept. 14: Determination of qualified bidders.

*Sept. 16: Auction at offices of bankruptcy counsel Jones Day.

*Sept. 21: Hearing on sale at U.S. Bankruptcy Court in Manhattan.


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