Relativity Sells to Investor Group, Files for Chapter 11 Bankruptcy Again

Relativity Media has agreed to sell its assets to UltraV Holdings, a joint venture among funds managed by Sound Point Capital Management and RMRM Holdings.

UltraV intends to provide “sufficient capital” to resume Relativity Media’s operations and the development and distribution of original content through existing and future platforms, including the current distribution agreement Relativity has with Netflix.

In order to facilitate the sale and address certain legacy liabilities, the parties intend to implement the transaction through a section 363 sale under Chapter 11. Relativity Media and certain subsidiaries are expected to file voluntary Chapter 11 petitions in the U.S. Bankruptcy Court for the Southern District of New York.

The sale to UltraV will be subject to court approval and other closing conditions. It is expected to close in the next 45 to 60 days.

RMRM is led by David Robbins, former chairman of Bally Technologies; Lex Miron, veteran media industry advisor; and Larry Robbins, seasoned media industry executive. Sound Point Capital Management is a New York-based asset management firm with approximately $17 billion of assets under management.

“We are very excited to acquire the assets of Relativity Media, and we believe there are numerous opportunities to reinvigorate and expand the business,” said Miron. “We have a strong development slate and are looking forward to bringing these films to audiences through our distribution partnerships, including through our agreement with Netflix. We are committed to putting the necessary resources into the business so that we can attract and retain new talent, create outstanding original film, television and digital content and distribute that content across multiple platforms.”

“Our simple message to the industry is that Relativity Media is open for business and we look forward to demonstrating that we intend to operate a substantial and well-financed entertainment company with strong and stable leadership,” said Robbins. “We recognize that Relativity Media has had its fair share of challenges during the past several years and that we need to rebuild trust and confidence in the business. It is our full intention and commitment to put those past chapters behind us and resume the business of creating and distributing outstanding content. We are confident that we have the collective industry expertise, relationships and, perhaps most importantly, the financial resources to fulfill that commitment and build a successful and sustainable business.”

Ryan Kavanaugh, founder of Relativity Media, said, “I still very much believe in the Relativity Media business model. Unfortunately, the company faced the significant challenge of a complicated capital structure and an evolving industry. I could not be more pleased about this agreement with UltraV. The transaction will result in a fresh start for the company, and it turns Relativity over to owners who have a sincere appreciation for the business, the art and the long-term needs of the industry.”

Robbins added, “UltraV will now be focused on completing the sale process as expeditiously as possible and ensuring that once the transaction is finalized Relativity Media can hit the ground running with appropriate financial backing and a strong leadership team.”