Many of our Escondido readers have probably had the chance to get out to the movies this summer. There have been plenty of blockbusters to choose from during the typically ramped-up summer movie season, but there have been plenty of movies that have underperformed as well. For one movie studio, it appears that a track record of underperforming movie productions may have played a role in the recent decision to file for Chapter 11 bankruptcy.
According to a recent report, the business leaders at Relativity Media decided that filing for Chapter 11 bankruptcy was the best move for the studio as the company faced debt of nearly $681 million. Some of our readers may be familiar with Relativity Media from movies such as "Mirror Mirror" or "Immortals," which were produced by the company in recent years. Relativity Media also co-financed the Channing Tatum and Jonah Hill movie "21 Jump Street," adapted from the 1980's television show.
With the business bankruptcy filing, the movie studio plans to remain in operation. The focus of the bankruptcy filing will rest primarily on debt reorganization, although a restructuring of the company's business model may also be attempted. The recent reports indicate that the company has already laid off 75 employees.
The movie business, like many other businesses, can be notoriously fickle. However, if a company is able to come to terms with the company's creditors and move forward producing and financing movies, there may yet be hope for a turnaround.
Source: Santa Cruz Sentinel, "Hollywood's Relativity files for bankruptcy with $681M owing," Ryan Nakashima, July 30, 2015