Many of our readers may remember a previous post here that detailed the Chapter 11 bankruptcy filing by Relativity Media, a movie studio based in California. At the time of the bankruptcy filing, there was a lot of uncertainty as to whether Relativity Media would be able to continue running their operations, or if the company would be bought by outside bidders. Now, it appears there may be a little bit more clarity.
According to a recent report, there were no outside bidders who made a play to purchase the company in whole by the deadline, which was on September 25. There were, however, multiple bidders for at least certain segments of the company. The reports indicate that there was a particularly significant interest in the company's television operations, which produces a number of reality television shows.
For now, the future of Relativity Media remains uncertain, although it appears that an outright total purchase of the company may not be in the offing anytime soon. The senior creditors are now reportedly in the most beneficial position, as they will likely be the ones to end up with control of the company. In the original business bankruptcy filing, Relativity Media reported an estimated $560 million in assets against $1.2 billion in liabilities.
Many companies go into the Chapter 11 bankruptcy process without a clear plan. All they know is that the finances don't look good, and the company creditors are getting antsy. Going into the process with a plan for debt reorganization and a new business model is usually a better idea.
Source: Variety, "With No Bids for Relativity as a Whole, Company Likely to Go to Senior Lenders," James Rainey and Brent Lang, Sep. 25, 2015