Relativity Media seeks OK of $250 million sale, $45 million DIP loan

By Caroline Salls

Pittsburgh, July 31 – Relativity Media, LLC requested court approval of the proposed $250 million sale of the company and court approval to obtain up to $45 million of debtor-in-possession financing, according to motions filed Thursday with the U.S. Bankruptcy Court for the Southern District of New York.

As previously reported, Relativity entered into an agreement with RM Bidder LLC, an entity formed and owned by some of the company’s pre-bankruptcy lenders, under which RM Bidder will acquire substantially all of the assets of Relativity, subject to court approval and an auction process.

According to the asset sale motion, the purchase price will include the discharge in full of all amounts outstanding and obligations under the DIP loans, the discharge in full of all amounts outstanding and obligations under term A loans, the discharge of a portion of the principal amount of debt and interest accrued on the closing date plus any penalty or pre-payment fees owned under term B loans and the assumption of specified liabilities.

RM Bidder’s bid will serve as a starting point for a sale and auction process that will be conducted by Blackstone Group LP and FTI Consulting LLC.

If RM Bidder is not the high bidder for the assets, it will receive a $3.75 million break-up fee and reimbursement of up to $1 million of its sale-related expenses.

The company said the auction process is expected to conclude with a sale closing in early October.

According to the DIP financing motion, Cortland Capital Market Services LLC is the administrative and collateral agent for the financing, which is being provided by a group of Relativity’s pre-bankruptcy lenders.

Interest will accrue at the adjusted Eurodollar rate plus 950 basis points with a 1% floor.

The facility will mature on the earliest of Oct. 2, 30 days after entry of the $20 million interim financing order if a final order has not been entered, the effective date or substantial consummation of a plan of reorganization or liquidation, the completion of a sale of the loan parties’ assets, conversion of the Chapter 11 case and acceleration of the loans and obligations.

Relativity Media, a film studio based in Beverly Hills, Calif., filed bankruptcy on July 30. The Chapter 11 case number is 15-11989.

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