In a document to shareholders last week, EuropaCorp said that Relativity was in danger of losing its 50% stake in the venture after failing to pay its share of the quarterly overhead. If it doesn’t pay between $2 million to $3 million by Dec. 14, EuropaCorp says it will gain full control of the distribution arm and Relativity will lose access to its services. The joint venture is dubbed RED and has been used to release such films as “Masterminds” and “Nine Lives,” as well as upcoming projects like Luc Besson’s “Valerian and the City of a Thousand Planets.”
Relativity emerged from bankruptcy protection earlier this year with its founder Ryan Kavanaugh retaining control of the film studio. Since that time, however, it has struggled to put together a slate of successful films, losing millions on “Masterminds” and “The Disappointments Room.” It plans to use RED to release the Halle Berry thriller “Kidnap” in December, as well as “Before I Wake,” a horror film due to open next year.
However, the company claims that EuropaCorp owes it money for unspecified reasons.
“Europa owes Relativity a significant amount of money and this is an accounting dispute of how much each party owes the other and nothing more, as the net differences between what the parties owe each other and the amount in dispute is minimal,” a Relativity spokeswoman said in a statement.
A spokesperson for EuropaCorp denied that the company owed Relativity money.
Relations between the companies have been strained since Relativity emerged from Chapter 11 earlier this year. The dispute comes at a time of great corporate change for both Relativity and EuropaCorp, which have been partners since 2014. Over the weekend, Yuuzu, a Singapore-based e-commerce company, said it had reached an agreement to buy a controlling stake in Relativity.
EuropaCorp has a deal to sell a 27.9% stake to China’s Fundamental Films for 60 million euros ($66 million). The company’s shareholders must approve the sale during its Nov. 17 meeting.