After months of struggling to bring his company back from bankruptcy, Relativity Media chairman and CEO Ryan Kavanaugh has reportedly stepped down from leadership of the company that he founded a dozen years ago.
Representatives of the Beverly Hills-based multi-media concern did not respond to requests for comment, but two publications reported Tuesday evening that Kavanaugh, 41, was stepping away from Relativity, some 17 months after the company slipped into Chapter 11 protection, with nearly $1.2 billion in liabilities.
The news, first reported in The Wrap, came after a series of reports in Variety about the travails of Relativity — the latest coming Tuesday afternoon and describing how the company had told its roughly 30 remaining employees that they would not be paid during their two-week holiday break.
The furlough meant that the workers would receive no pay this week or next, while the Relativity office closed for its regular winter break. Two sources told Variety there was concern among employees that the furloughs would become permanent layoffs, for at least some of the employees. Relativity’s spokesperson did not reply to requests for comment on the action.
Sources familiar with the unpaid furlough said it was the latest blow to a staff that was already badly demoralized, following a string of failed movies and the company’s apparent inability to get new projects off the ground.
The company had claimed it was on the verge of making new films, in partnership with new allies, including a tech company based in Singapore and a Los Angeles-based production house. But Kavanaugh’s company has touted new investment before, only to have the deals fizzle. And the recent announcements — about an investment from YuuZoo, a social media company based in Singapore, and a $200 million partnership with Hollywood-based Storyoscopic Films — had not created any tangible results, at least that outsiders could see.
Relativity also was locked in a tense standoff with its partner, EuropaCorp, in a distribution and marketing joint venture. EuropaCorp’s board met last week to discuss whether or not they could exit or take over the joint venture. The RED venture had been touted as a major asset by Relativity insiders.