Netflix & Relativity in Spat Regarding Reorganization

BEVERLY HILLS: Netflix has filed an objection regarding Relativity Media’s Chapter 11 reorganization and has asked a U.S. Bankruptcy Court to allow for the termination of its contract with the company.

As part of the complaint filed, Netflix said that in 2015 Relativity failed to deliver the minimum number of films required in their contract. It also said that Relativity has failed to demonstrate that it has the funding necessary to exit bankruptcy.

Netflix also questioned the validity of Relativity’s reorganization, saying that there is “no meaningful information on who will run the day-to-day operations or their qualifications, and no business plan or other information to support the debtors’ incredibly optimistic financial projections.”

A spokesman for Relativity fired back, questioning the streaming service’s motives: “In 2012, Relativity signed a distribution deal with Netflix whose terms were by far the most favorable of any studio. This objection is nothing more than a blatant attempt by Netflix to use the Chapter 11 process to once again renegotiate the agreement, which does not expire until 2018.”

Netflix is one of several third-party filings against Relativity Media in U.S. Bankruptcy Court in New York. Judge Michael Wiles is set to rule on the matter on February 1.