Judge To Decide Whether Time Is On Company’s Side

As for the money: the court will decide whether to approve a $10.5 million loan to keep Relativity going. It’s the second installment in a $45 million Debtor In Possession financing plan from current lenders following the $9.5 million first installment that Wiles approved two weeks ago.

Time, though, is the key issue as he crafts the bidding process and what liens, leases, and loans come with them. There are at least 16 motions or objections to Relativity’s proposed plan which includes a calendar requiring anyone interested in buying the film and TV company to identify itself by September 3 and submit a bid by noon on September 11, ahead of an auction on September 16.

It’s not entirely built on air: The judge will be presented with a proposed agreement Relativity made on August 9 to sell its film and TV assets for $250 million to lenders including Anchorage Capital, Luxor Capital and Falcon Investment Advisors.

Like most of the lenders, they want to wrap this up as quickly as possible. Cortland Capital Market Services said on July 31 that every day Relativity grapples with Chapter 11 restrictions its films and shows lose value, the company loses money, and legal costs rise.

The extra fees "are reasonable and appropriate in light of the size and nature of the transaction and the efforts that have been, and will be, expended by the Stalking Horse Bidder," says Relativity’s investment banker, Blackstone Group’s C.J. Brown. What’s more, "they were heavily negotiated in good faith" and were "necessary to secure the Stalking Horse Bidder’s commitment."