Declarationof Dr. Brian G. Kushner Pursuant to Rule 1007-2 of the Local Bankruptcy Rules for the Southern District of New York in Support of Chapter 11 Bankruptcy Petitions and First Day Pleadings filed by Craig A. Wolfe on behalf of Relativity Fashion, LLC. (Wolfe, Craig) (Entered: 07/30/2015)
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
Chapter 11
RELATIVITY FASHION, LLC, et al., 1
Case No. 15-11989 (MEW)
Debtors.
(Joint Administration Requested)
DECLARATION OF DR. BRIAN G. KUSHNER PURSUANT TO
RULE 1007-2 OF THE LOCAL BANKRUPTCY RULES FOR
THE SOUTHERN DISTRICT OF NEW YORK IN SUPPORT OF
CHAPTER 11 BANKRUPTCY PETITIONS AND FIRST DAY PLEADINGS
Dr. Brian G. Kushner, being duly sworn, deposes and states:
1.
I am the Chief Restructuring Officer (âCROâ) of (i) Relativity Fashion, LLC, a New
York limited liability company (âRelativity Fashionâ),2 its ultimate parent company, Relativity
Holdings LLC (âRelativity Holdcoâ), and their 143 affiliates (collectively, the âDebtorsâ) that have
filed voluntary petitions (the âChapter 11 Petitionsâ) under chapter 11 of title 11 of the United
States Code (the âBankruptcy Codeâ) commencing these chapter 11 cases (the âCasesâ), and
(ii) the various non-Debtor subsidiaries of Relativity Holdco, both direct and indirect (the âNonDebtor Subsidiariesâ). The Debtors and the Non-Debtor Subsidiaries are referred to herein
collectively as âRelativityâ or the âRelativity Group.â
1
The 145 Debtors in these chapter 11 cases are as set forth on page (i).
2
Additional information regarding Relativity Fashion and the basis for venue in this District is set forth below.
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The Debtors in these chapter 11 cases, along with the last four digits of each Debtorâs federal tax identification
number, are: Relativity Fashion, LLC (4571); Relativity Holdings LLC (7052); Relativity Media, LLC (0844); Relativity
REAL, LLC (1653); RML Distribution Domestic, LLC (6528); RML Distribution International, LLC (6749); RMLDD
Financing, LLC (9114); 21 & Over Productions, LLC (7796); 3 Days to Kill Productions, LLC (5747); A Perfect
Getaway P.R., LLC (9252); A Perfect Getaway, LLC (3939); Armored Car Productions, LLC (2750); Best of Me
Productions, LLC (1490); Black Or White Films, LLC (6718); Blackbird Productions, LLC (8037); Brant Point
Productions, LLC (9994); Brick Mansions Acquisitions, LLC (3910); Brilliant Films, LLC (0448); Brothers Productions,
LLC (9930); Brothers Servicing, LLC (5849); Catfish Productions, LLC (7728); Cine Productions, LLC (8359);
CinePost, LLC (8440); Cisco Beach Media, LLC (8621); Cliff Road Media, LLC (7065); Den of Thieves Films, LLC
(3046); Don Jon Acquisitions, LLC (7951); DR Productions, LLC (7803); Einstein Rentals, LLC (5861); English
Breakfast Media, LLC (2240); Furnace Films, LLC (3558); Gotti Acquisitions, LLC (6562); Great Point Productions,
LLC (5813); Guido Contini Films, LLC (1031); Hooper Farm Music, LLC (3773); Hooper Farm Publishing, LLC
(3762); Hummock Pond Properties, LLC (9862); Hunter Killer La Productions, LLC (1939); Hunter Killer Productions,
LLC (3130); In The Hat Productions, LLC (3140); J & J Project, LLC (1832); JGAG Acquisitions, LLC (9221); Left
Behind Acquisitions, LLC (1367); Long Pond Media, LLC (7197); Madaket Publishing, LLC (9356); Madaket Road
Music, LLC (9352); Madvine RM, LLC (0646); Malavita Productions, LLC (8636); MB Productions, LLC (4477);
Merchant of Shanghai Productions, LLC (7002); Miacomet Media LLC (7371); Miracle Shot Productions, LLC (0015);
Most Wonderful Time Productions, LLC (0426); Movie Productions, LLC (9860); One Life Acquisitions, LLC (9061);
Orange Street Media, LLC (3089); Out Of This World Productions, LLC (2322); Paranoia Acquisitions, LLC (8747);
Phantom Acquisitions, LLC (6381); Pocomo Productions, LLC (1069); Relative Motion Music, LLC (8016); Relative
Velocity Music, LLC (7169); Relativity Development, LLC (5296); Relativity Film Finance II, LLC (9082); Relativity
Film Finance III, LLC (8893); Relativity Film Finance, LLC (2127); Relativity Films, LLC (5464); Relativity Foreign,
LLC (8993); Relativity India Holdings, LLC (8921); Relativity Jackson, LLC (6116); Relativity Media Distribution,
LLC (0264); Relativity Media Films, LLC (1574); Relativity Music Group, LLC (9540); Relativity Production LLC
(7891); Relativity Rogue, LLC (3333); Relativity Senator, LLC (9044); Relativity Sky Land Asia Holdings, LLC (9582);
Relativity TV, LLC (0227); Reveler Productions, LLC (2191); RML Acquisitions I, LLC (9406); RML Acquisitions II,
LLC (9810); RML Acquisitions III, LLC (9116); RML Acquisitions IV, LLC (4997); RML Acquisitions IX, LLC
(4410); RML Acquisitions V, LLC (9532); RML Acquisitions VI, LLC (9640); RML Acquisitions VII, LLC (7747);
RML Acquisitions VIII, LLC (7459); RML Acquisitions X, LLC (1009); RML Acquisitions XI, LLC (2651); RML
Acquisitions XII, LLC (4226); RML Acquisitions XIII, LLC (9614); RML Acquisitions XIV, LLC (1910); RML
Acquisitions XV, LLC (5518); RML Bronze Films, LLC (8636); RML Damascus Films, LLC (6024); RML Desert
Films, LLC (4564); RML Documentaries, LLC (7991); RML DR Films, LLC (0022); RML Echo Films, LLC (4656);
RML Escobar Films LLC (0123); RML Film Development, LLC (3567); RML Films PR, LLC (1662); RML Hector
Films, LLC (6054); RML Hillsong Films, LLC (3539); RML IFWT Films, LLC (1255); RML International Assets, LLC
(1910); RML Jackson, LLC (1081); RML Kidnap Films, LLC (2708); RML Lazarus Films, LLC (0107); RML Nina
Films, LLC (0495); RML November Films, LLC (9701); RML Oculus Films, LLC (2596); RML Our Father Films, LLC
(6485); RML Romeo and Juliet Films, LLC (9509); RML Scripture Films, LLC (7845); RML Solace Films, LLC (5125);
RML Somnia Films, LLC (7195); RML Timeless Productions, LLC (1996); RML Turkeys Films, LLC (8898); RML
Very Good Girls Films, LLC (3685); RML WIB Films, LLC (0102); Rogue Digital, LLC (5578); Rogue Games, LLC
(4812); Roguelife LLC (3442); Safe Haven Productions, LLC (6550); Sanctum Films, LLC (7736); Santa Claus
Productions, LLC (7398); Smith Point Productions, LLC (9118); Snow White Productions, LLC (3175); Spy Next Door,
LLC (3043); Story Development, LLC (0677); Straight Wharf Productions, LLC (5858); Strangers II, LLC (6152);
Stretch Armstrong Productions, LLC (0213); Studio Merchandise, LLC (5738); Summer Forever Productions, LLC
(9211); The Crow Productions, LLC (6707); Totally Interns, LLC (9980); Tribes of Palos Verdes Production, LLC
(6638); Tuckernuck Music, LLC (8713); Tuckernuck Publishing, LLC (3960); Wright Girls Films, LLC (9639); Yuma,
Inc. (1669); Zero Point Enterprises, LLC (9558). The location of the Debtorsâ corporate headquarters is: 9242 Beverly
Blvd., Suite 300, Beverly Hills, CA 90210.
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I am authorized to submit this declaration (this âDeclarationâ) on behalf of the
Debtors. This Declaration is made pursuant to Rule 1007-2 of the Local Rules (the âLocal Rulesâ)
for the United States Bankruptcy Court for the Southern District of New York (the âCourtâ) in
support of the Chapter 11 Petitions and each of the motions and applications for relief filed
concurrently therewith (collectively, the âFirst Day Pleadingsâ). I have reviewed the First Day
Pleadings or have otherwise had their contents explained to me and believe that approval of the relief
requested therein is necessary to (i) minimize the adverse effects and disruption the filing of the
Chapter 11 Petitions may have on the Debtorsâ business operations, (ii) permit an effective transition
into chapter 11, and (iii) preserve and maximize the value of the Debtorsâ estates with the overall
goal of achieving a successful reorganization.
3.
Except as otherwise indicated herein, I have personal knowledge of the matters and
issues set forth herein or have gained knowledge of such matters from my review of the relevant
documents, or from information provided to me or verified by the Debtorsâ management, other
employees, and/or professional advisors. If called upon to testify, I would testify competently to the
facts set forth herein.
4.
I began serving as CRO of the Relativity Group upon the filing of the Chapter 11
Petition of Relativity Fashion, and immediately prior to that, served as the Chief Consultant (âCCâ)
to the Relativity Group beginning on June 15, 2015. In my capacity as CC to and CRO of Relativity,
I have become familiar with the Debtorsâ businesses, operations and financial affairs. As part of my
duties as CRO, I will be overseeing and advising the Debtors on their day-to-day operations,
bankruptcy compliance, budgets, cash flows, financial analysis, asset dispositions, and overall
restructuring and reorganization efforts.
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In addition to being the CRO of Relativity, I am a senior managing director of FTI
Consulting, Inc., an international financial advisory firm (âFTIâ), and my business address is FTIâs
Dallas offices located at 2001 Ross Avenue, Suite 400, Dallas, Texas 75201. Over the past 20 years,
I have served as Chairman, Director, Chief Executive Officer (âCEOâ)/Interim CEO, CRO and/or
CC for over a dozen public and private media, telecom, and technology companies.
6.
On July 30, 2015 (the âPetition Dateâ) each of the above-captioned 145 Debtors filed
a Chapter 11 Petition. It is anticipated that the Debtors will continue to manage their affairs and
operate their businesses as debtors and debtors-in-possession pursuant and subject to the
requirements of sections 1107(a) and 1108 of the Bankruptcy Code.
7.
Section I of this Declaration provides an overview of the Debtorsâ businesses and
operations, the Debtorsâ capital structure, and the events leading to the filing of the Chapter 11
Petitions. Section II of this Declaration describes the First Day Pleadings and sets forth the relevant
facts in support of such pleadings. Finally, Section III sets forth the information required under Rule
1007-2 of the Local Rules.
I.
The Debtorsâ Businesses
8.
Relativity is a privately-held entertainment company with an integrated and
diversified global media platform that provides, among other things, film and television financing,
production and distribution. Relativity was founded in 2004 by Ryan Kavanaugh as a film slate cofinancier partnering with major studios such as Sony and Universal. In 2010, Relativity acquired the
marketing and distribution operations of Overture Films, and began to transform itself into a fullservice movie studio. Since its inception, Relativity has produced, distributed or structured
financing for over 200 feature films, including pictures such as THE FIGHTER, LIMITLESS, SAFE
HAVEN and ACT OF VALOR. Relativity has further expanded into other forms of content production
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and distribution, including branding services, sports management, digital media, music publishing,
fashion brand management and consultation, and education. Each of these businesses units is further
described below.
9.
Relativity is headquartered at 9242 Beverly Boulevard, Suite 300, Beverly Hills,
California 90210, and operates out of multiple other locations in Los Angeles and New York.
Relativity leases (and thus does not own) all of the premises out of which it operates under leases
and office license agreements. Each lease or license is in the name of one of the following three
Debtors:
(i) Relativity Media, LLC (âRMLâ), (ii) Relativity REAL, LLC (d/b/a Relativity
Television) (âRTVâ), and (iii) Long Pond Media, LLC. A description of the premises and the
relevant agreements is contained in Schedule 7. In addition, in connection with the Debtorsâ film
and television productions, the Debtors own small parcels of real property used for short-term
production sites.
10.
As of the Petition Date, the Debtors have approximately 89 full and part-time
employees and 54 independent contractors, with almost all of them employed by (i) RML;
(ii) Relativity Fashion; or (iii) RTV. RML provides many of the employees to the various business
units described below, including the film, branding, digital media, and music groups.
11.
In addition, in connection with the Debtorsâ film and television productions, there are
approximately 760 temporary production personnel (the âTemporary Production Personnelâ) that
provide cast and crew services, as well as other production supports, to certain of the Debtors. The
aggregate number of Temporary Production Personnel used by the Debtors fluctuates daily based on
the schedule and production demands of the specific films or television productions. These Debtors
include, without limitation, (i) RML Distribution Domestic, LLC (âRMLDDâ); (ii) RML Film
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Development, LLC; (iii) Relativity Development, LLC; (iv) Relativity Films, LLC; (v) RTV; and
(vi) many of the single picture special purpose vehicles (âSPVsâ).
12.
The Temporary Production Personnel are employed and supplied by professional
employer organizations (âPEOsâ), which are payroll processing services and/or staffing agencies
(the âProduction Staffing Agenciesâ). Currently, the following Production Staffing Agencies are
providing support to the Debtorsâ various productions: Cast & Crew Production Services, LLC;
EASE Worldwide Services, LP; CAPS, LLC; Features Processing CA, Inc.; Media Services, LLC;
and Sargent Disc Limited.
13.
For the twelve months ending December 31, 2014, Relativity generated
approximately $501,074,000 in revenues on a consolidated basis. As of December 31, 2014,
Relativity had assets with a book value of approximately $559,973,000 and liabilities of
$1,178,810,000 on a consolidated basis.3
A.
Relativity Groupâs Corporate Structure
14.
The Relativity Group operates its businesses through separate, but affiliated
companies that are generally organized by business lines or units. Relativity Holdco is the ultimate
parent company in the Relativity Group. Relativity Holdco owns 100% of the equity of RML.
15.
RML is the Relativity Groupâs main operating company, and is the direct or indirect
owner of each of the other companies in the Relativity Group. A list of all of the Debtors, organized
alphabetically and by business unit, is attached hereto as Exhibit A.
3
The amounts are presented on a consolidated basis for the Relativity entities listed on Exhibit B hereto, which includes
the Debtors and the Non-Debtor Subsidiaries in the Relativity Group. Unless otherwise indicated, the financial
information contained in this Declaration is unaudited and may be subject to change.
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The following chart summarizes Relativityâs current corporate structure by business
unit rather than legal entity. More detailed charts of the Relativity Groupâs corporate structure by
legal entity are attached hereto as Exhibit B.
Relativity
Holdings LLC
Debtors
Non-Debtors
Debtors and
Non-Debtors
Relativity
Media, LLC
Single
Pictures
SPVs
Fashion
TV
Sports
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Picture
Acquisitions
Music
Education
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Marketing
and
Distribution
Digital
Branding
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Relativity Holdcoâs five classes of equity are held by approximately 55 holders. The
following is a general description of the five equity classes:
(i)
Class A Units: Relativity Holdco currently has 120.75 million Class A Units
outstanding. The Class A Units have voting rights on a 1 vote per unit basis.
These units are not subject to any mandatory dividends. One holder of the
Class A Units has a put right, and certain other rights, in the event an IPO or
other specified liquidity event does not occur prior to November 26, 2018.
(ii)
Class B Units: Relativity Holdco currently has 59.95 million Class B Units
outstanding. The Class B Units do not have any voting rights, and are held
by members of Relativityâs management team, either directly or indirectly
through a holding company, as well as by members of the Board of Managers
and certain consultants to Relativity. The Class B Units are profits interests
and only have value to the extent Relativity Holdcoâs valuation per unit
exceeds the applicable threshold amount.
(iii)
Class C Preferred Equity: Relativity Holdco currently has 3.4704 Class C
Units outstanding. The Class C Units do not have any voting rights, and are
held by Dune Capital Partners IV LLC (âDune Capitalâ). The Class C Units
accrue dividends at 12.5% paid in kind (âPIKâ), must be exchanged by Dune
Capital into Class E Units or debt no later than December 31, 2015 and are
otherwise non-convertible.4
(iv)
Class D Units: Relativity Holdco currently has 1.36 million Class D Units
outstanding. The Class D Units do not have any voting rights, and are held
by Tom Forman. The Class D Units permit Mr. Forman to cause Relativity
Holdco, under certain circumstances, to repurchase all or any portion of the
Class D Units held by Mr. Forman in approximately 3.5 years for either
$6.25 per Class D Unit in a lump sum or $12.50 per Class D Unit paid over
time (at Relativity Holdcoâs election).
(v)
Class E Units: Relativity Holdco currently has 11.7 million Class E Units
outstanding. The Class E Units have voting rights on a 2 vote per unit basis
and accrue dividends at 12.5% PIK. The Class E Units are convertible into
Class A Units at the option of the holders thereof and, in certain
circumstances, on a mandatory basis.
4
Historically, the Debtors have treated the Class C Preferred Equity as debt for both financial reporting and income tax
purposes, and there is a contractual obligation to a holder of the Class C Preferred Equity to continue treating the units as
indebtedness for income tax purposes. The cumulative preference per Class C Unit through May 30, 2015 is
$871,301.83 and the total Class C Unit preference is $8,251,576.87. The Debtors will be evaluating the proper
characterization of the Class C Preferred Equity as equity versus debt in light of the Debtorsâ chapter 11 cases.
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B.
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The Debtorsâ Management and Board of Managers
18.
The following is an overview of Relativityâs key officers and management as of the
Petition Date, each of whom serve in the indicated capacities:
Name
Ryan Kavanaugh
Tucker Tooley
Carol Genis
Happy Walters
Andrew Matthews
Greg Shamo
Ramon Wilson
David Shane
Robbie Brenner
Matt Alvarez
Kyle Davies
Ken Halsband
Rachel Cadden
Tom Forman
Andrew Marcus
Camela Galano
Bob Bowen
Rosalind Lawton
Tommy Gargotta
Matt Brodlie
Brian G. Kushner
Luke Schaeffer
19.
Position
Chief Executive Officer, RML
President. RML
Managing Director, RML
Co-President, RML/Chief Executive Officer, Relativity Sports, LLC
Chief Financial Officer & Co-Chief Operating Officer, RML
Co-Chief Operating Officer, RML
General Manager, RML
Chief Communications Officer, Executive Vice President, RML
Co-President, Production, RML
Co-President, Production/President, Multicultural Division, RML
President, Worldwide Distribution,
Relativity EuropaCorp Distribution, LLC
President, Physical and Post Production, RML
Executive Vice President, Marketing,
Relativity EuropaCorp Distribution, LLC
Chief Executive Officer, RTV
Chief Operating Officer, RTV
President, Relativity International
President, Relativity Music
Executive Vice-President, Business and Legal Affairs
President, Theatrical Marketing,
Relativity EuropaCorp Distribution, LLC
Executive Vice President, Acquisitions, RML
Chief Restructuring Officer
Deputy Chief Restructuring Officer
Each of the Debtors, other than Relativity Holdco, has a sole member that is the direct
parent of such Debtor, including RML, whose sole member is Relativity Holdco. Relativity Holdco,
as the ultimate parent, is the only Debtor with a Board of Managers which, as of the Petition Date,
was constituted of the following individuals:
Name
Ryan Kavanaugh
Chairman
Founder and CEO, RML
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Board Tenure and Experience
Since May 30, 2012. Mr. Kavanaugh is the Founder and
Chief Executive Officer of RML.
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Name
Tucker Tooley
President, RML
Ron Burkle
The Yucaipa Companies, LLC
Mark Canton
Producer
Gurpreet Chandhoke
VII Peaks Capital
Shep Gordon
Music Producer and Talent
Manager
Carey Metz
Whiteside Energy, LP
Hugo Shong
IDG Capital Partners, IDG-Accel
China Growth Fund and IDGAccel Capital Fund
Jim Wiatt
C.
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Board Tenure and Experience
Since May 30, 2012. Mr. Tooley is the President of RML
Since May 30, 2012. Mr. Burkle is the co-founder and
managing partner of The Yucaipa Companies, LLC.
Since December 21, 2012. Mr. Canton has over 20 years of
experience in the entertainment industry.
Since May 11, 2015. Mr. Chandhoke is the Managing
Partner and Chief Investment Officer for VII Peaks Capital.
Since August 27, 2013. Mr. Gordon is a talent manager,
film agent and movie producer.
Since May 26, 2015. Mr. Metz is the Chief Investment
Officer and Managing Partner and Founder of Whiteside
Energy, LP.
Since May 29, 2013. Mr. Shong is the founding General
Partner of IDG Capital Partners, IDG-Accel China Growth
Fund and IDG-Accel Capital Fund. Mr. Shong is also a
partner with Relativity in Sky Land Entertainment.
Since May 30, 2012. Mr. Wiatt is a strategic advisor to
AOL.
The Debtorsâ Operations
20.
The Relativity Groupâs operations are conducted through various subsidiaries and
affiliates that are grouped by business units. Many, but not all, of the subsidiaries and affiliates are
Debtors in these Cases. The Debtorsâ key business units include (i) film production and distribution;
(ii) television production and distribution; (iii) music; (iv) digital; (v) branding; and (vi) fashion.
The following are descriptions of each of these business units and the Debtors within them. This
Declaration begins with one of the smaller business units, fashion, as Relativity Fashion was the
first to file its Chapter 11 Petition and is thus the lead captioned Debtor in these Cases.
(i)
Relativity Fashion
21.
Relativity Fashion (also known by its d/b/a, M3/Relativity), is a New York limited
liability company that was organized on October 22, 2013. It is the lead captioned Debtor in these
Cases. It is a consultancy service company that represents fashion designers and provides services to
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other clients in connection with building and launching their brands and expanding them into various
forms of media through involvement with other Relativity entities (for example, into television
through a partnership with RTV). It is the primary entity in the Debtorsâ fashion business unit. As
of immediately prior to the Petition Date, it had approximately ten employees, with nine working in
its offices at 315 Park Avenue South, New York, New York 10010. Certain other Debtors continue
to have personnel in the New York office.
22.
With its principal place of business in New York City and being organized and thus
domiciled in the State of New York, Relativity Fashionâs Chapter 11 Petition was filed in this Court
just prior to the filing of the Chapter 11 Petitions of the other Debtors. The other Debtors also filed
their Chapter 11 Petitions in this Court because they are affiliates of Relativity Fashion, which by
then had its Case already pending in this Court. Accordingly, I have been informed by legal counsel
that all of the Debtors were entitled to file their Chapter 11 Petitions in this District and in this Court.
The Debtors have requested joint administration of their Cases.
23.
RML provides certain administrative and support services to Relativity Fashion under
a Services Agreement, dated as of September 16, 2013. Specifically, RML provides Relativity
Fashion with office space, logistics, human resources, payroll, accounting, accounts receivable and
payable, legal, and IT services. Relativity Fashion pays a fee to RML for such services. One of the
Debtorsâ primary secured financing facilities (the Cortland TLA/TLB Financing Agreement (defined
below)) provides that any Relativity subsidiary that was not in existence on May 30, 2012 is to
become obligated under the financing agreement. Relativity Fashion was formed after that date.
24.
RML owns 70% of Relativity Fashion, with the remaining 30% owned by three of the
consultants in Relativity Fashionâs business. I am informed by legal counsel that the class of units
held by RML provide it with virtually all of the material voting rights, while the units held by the
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three individuals provide voting rights that are limited to decisions regarding insider transactions
between Relativity Fashion and the other entities in the Relativity Group. I understand that the units
held by the individuals are largely for the purpose of providing a financial participation in the
performance of the company as opposed to controlling the company. RML thus has full control over
Relativity Fashion. Relativity Fashion owns 100% of its subsidiary, M3 Fashion Acceleration GP,
LLC, which is not a Debtor in these Cases.
25.
Relativity Fashionâs assets include contractual rights under license agreements and
contracts with fashion talent and designers. For the twelve months ending December 31, 2014,
Relativity Fashion generated approximately $572,000 in revenues.
(ii)
Relativity Film
26.
The Relativity film business provides a full-service studio with development,
production, financing and distribution capabilities (the âFilm Businessâ). Since its inception, the
Film Business has distributed, produced or arranged financing for over 200 films that have earned
over $23 billion in worldwide box office receipts, with 78 films generating more than $100 million
in worldwide box office receipts, 49 films opening at number one at the domestic box office, and 73
films earning Oscar nominations with 11 wins.
27.
The Film Business consists of (i) an acquisition division that purchases film rights
(the âAcquisition Divisionâ); (ii) a single picture division that oversees production of Relativityâs
films and a group of single picture SPVs that each hold the rights to and produce a particular
Relativity film (collectively, the âSingle Picture Divisionâ); and (iii) a marketing and distribution
division that arranges the domestic and international distribution of Relativityâs films (the
âMarketing and Distribution Divisionâ). In addition, Relativity EuropaCorp Distribution, LLC
(âREDâ) provides distribution and marketing services to the Debtors. RED is a Non-Debtor
Subsidiary and is described more fully below.
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The assets of the Film Business include the master of each of the Debtorsâ films, the
trademarks and copyrights associated with the films, and the right to distribute the films. For the
twelve months ending December 31, 2014, the Relativity Film Business generated approximately
$346.3 million in revenues.
29.
The Debtors in the Relativity Film Business are:
Acquisition Division
RML Acquisitions I,
LLC
RML Acquisitions II,
LLC
RML Acquisitions
III, LLC
RML Acquisitions IV,
LLC
RML Acquisitions V,
LLC
RML Acquisitions VI,
LLC
RML Acquisitions
VII, LLC
RML Acquisitions
VIII, LLC
RML Acquisitions IX, RML Acquisitions X,
LLC
LLC
RML Acquisitions
XI, LLC
RML Acquisitions
XII, LLC
RML Acquisitions
XIII, LLC
RML Acquisitions
XIV, LLC
RML Acquisitions
XV, LLC
21 & Over
Productions, LLC
3 Days to Kill
Productions, LLC
A Perfect Getaway,
LLC
A Perfect Getaway
P.R., LLC
Armored Car
Productions, LLC
Best of Me
Productions, LLC
Black Or White
Films, LLC
Blackbird
Productions, LLC
Brick Mansions
Acquisitions, LLC
Brilliant Films, LLC
Brothers Servicing,
LLC
Brothers Productions,
LLC
Catfish Productions,
LLC
CinePost, LLC
Cine Productions,
LLC
Den of Thieves Films,
LLC
Don Jon Acquisitions, DR Productions, LLC
LLC
Furnace Films, LLC
Gotti Acquisitions,
LLC
Guido Contini Films,
LLC
Hunter Killer
Productions, LLC
Hunter Killer La
Productions, LLC
In The Hat
Productions, LLC
JGAG Acquisitions,
LLC
J&J Project, LLC
Left Behind
Acquisitions, LLC
Malavita Productions,
LLC
Merchant of Shanghai MB Productions, LLC Miracle Shot
Productions, LLC
Productions, LLC
Most Wonderful Time
Productions, LLC
Single Picture Division
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Movie Productions,
LLC
One Life
Acquisitions, LLC
Out Of This World
Productions, LLC
Paranoia Acquisitions,
LLC
Phantom
Acquisitions, LLC
Relativity Films, LLC
Relativity
Development, LLC
Relativity Film
Finance, LLC
Relativity Film
Finance II, LLC
Relativity Film
Finance III, LLC
Relativity Media
Distribution, LLC
Relativity Media
Films, LLC
Reveler Productions,
LLC
RML Bronze Films,
LLC
RML Damascus
Films, LLC
RML Desert Films,
LLC
RML Documentaries,
LLC
RML DR Films, LLC
RML Echo Films,
LLC
RML Escobar Films
LLC
RML Film
Development, LLC
RML Hector Films,
LLC
RML Hillsong Films,
LLC
RML IFWT Films,
LLC
RML Kidnap Films,
LLC
RML Lazarus Films,
LLC
RML Nina Films,
LLC
RML November
Films, LLC
RML Oculus Films,
LLC
RML Our Father
Films, LLC
RML Romeo and
Juliet Films, LLC
RML Scripture Films,
LLC
RML Solace Films,
LLC
RML Somnia Films,
LLC
RML Timeless
Productions, LLC
RML Turkeys Films,
LLC
RML Very Good
Girls Films, LLC
RML WIB Films,
LLC
Safe Haven
Productions, LLC
Sanctum Films, LLC
Santa Claus
Productions, LLC
Snow White
Productions, LLC
Spy Next Door, LLC
Story Development,
LLC
Strangers II, LLC
Stretch Armstrong
Productions, LLC
Studio Merchandise,
LLC
Summer Forever
Productions, LLC
The Crow
Productions, LLC
Totally Interns, LLC
Tribes of Palos
Verdes Production,
LLC
Wright Girls Films,
LLC
Yuma, Inc.
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Marketing and Distribution Division
Relativity Foreign,
LLC
Relativity India
Holdings, LLC
Relativity Production
LLC
Relativity Senator,
LLC
Relativity Sky Land
Asia Holdings, LLC
RMLDD Financing,
LLC
RML Distribution
Domestic, LLC
RML Distribution
International, LLC
RML Films PR, LLC
RML International
Assets, LLC
(iii)
Relativity Television
30.
The Relativity television business (the âTV Businessâ) started as a television
production company in 2008 and now includes over 29 series in production and more than 46
contracted pilots and presentations, including eight upcoming scripted shows. Examples of these
series include: Catfish: The TV Show (MTV), The Great Food Truck Race (Food Network), Kim of
Queens (Lifetime Network), Young & Hungry (ABC Family), as well as the upcoming Limitless on
CBS.
31.
The Debtors in the TV Business have contractual rights with each of the networks for
the production of various shows and series. Certain Debtors in the TV Business also own real
property associated with the production of such shows and series. As of immediately prior to the
Petition Date, the TV Business had approximately 24 full- and part-time employees, and continues to
have approximately 510 Temporary Production Personnel. For the twelve months ending December
31, 2014, the Relativity TV Business generated approximately $96.6 million in revenues.
32.
All of the entities in the TV Business are Debtors. RTV and Relativity REAL LLC
are the two lead companies in the Relativity TV Business, with the following entities their
subsidiaries:
Brant Point
Productions, LLC
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English Breakfast
Media, LLC
Great Point
Productions, LLC
Hooper Farm Music,
LLC
Hooper Farm
Publishing, LLC
Hummock Pond
Properties, LLC
Long Pond Media,
LLC
Madaket Publishing,
LLC (f/k/a Broad Street
Publishing, LLC)
Madaket Road Music,
LLC (f/k/a Broad
Street Music, LLC)
Miacomet Media LLC Orange Street
Media, LLC
Pocomo Productions,
LLC
Smith Point
Productions, LLC
Straight Wharf
Productions, LLC
Tuckernuck Publishing,
LLC
Zero Point
Enterprises, LLC
Tuckernuck Music,
LLC
(iv)
Relativity Music
33.
The Relativity music business (the âMusic Businessâ) was founded in 2009 to
provide in-house music supervision and soundtrack services for films produced and/or financed by
Relativity and for other film studios, and to release the soundtracks internationally.
34.
Accordingly, the entities in the Music Business have distribution rights with respect
to the soundtracks produced by the Music Business, as well as the copyrights associated thereto. For
the twelve months ending December 31, 2014, the Relativity Music Business generated
approximately $1.5 million in revenues.
35.
The Debtors in the Music Business are:
Relativity Music Group, LLC
36.
Relative Motion Music, LLC
Relative Velocity Music, LLC
Select Music LLC, which is also part of Relativityâs Music Business, is not a Debtor
in these Cases. Select Music LLC is owned 45% by RML, with the remaining 55% being owned by
various unrelated investors.
(v)
Relativity Digital
37.
Relativityâs digital business unit (the âDigital Businessâ) develops, produces and
distributes original content and other promotional material for digital distribution. The Digital
Businessâ in-house production and graphics team produces, directs, and edits television-quality
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programming and creates high-end special effects. The Digital Business also develops branded
entertainment campaigns that connect brand partners with other Relativity businesses, such as the
Fashion Business, Music Business and TV Business.
38.
The entities in the Digital Business own and manage websites and website content,
and their assets include the intellectual property related to digital shorts and the equipment necessary
to produce such content. For the twelve months ending December 31, 2014, the Relativity Digital
Business generated approximately $242,000 in revenues.
39.
The Debtors in the Relativity Digital Business are:
Relativity Jackson,
LLC
Relativity Rogue, LLC RML Jackson, LLC
Rogue Games, LLC
Roguelife LLC d/b/a
Relativity Digital
Rogue Digital, LLC
(vi)
Relativity Branding
40.
Madvine RM, LLC (âMadvineâ) is Relativityâs branded entertainment and consumer
products company. Madvine creates and offers full product and brand integration for companies,
major brands, and other strategic partners outside of the Relativity Group. Madvine works with both
established and emerging brand partners. Its work for established brands is paid for in cash, and its
work for emerging brands is compensated through equity participations in the brandholder.
41.
Madvineâs assets include contractual rights under license agreements with various
product brands.
For the twelve months ending December 31, 2014, Madvine generated
approximately $2.2 million in revenues.
D.
Non-Debtor Subsidiaries
42.
As noted above, not all of entities in the Relativity Group filed Chapter 11 Petitions
and thus are Non-Debtor Subsidiaries in these Cases. The decisions regarding which entities would
file and which ones would not were based upon a variety of factors including, without limitation,
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whether the entities are (i) wholly-owned or otherwise controlled by RML, either directly or
indirectly; (ii) obligors on the financing facilities of RML and/or the other Debtors; and (iii) whether
there were other debt or special reasons that would require the protections of the automatic stay and
the chapter 11 process. As a general rule, entities in which RML holds only a partial or noncontrolling interest, that were not obligors on the Relativity Group credit facilities, and/or that had
had debt loads that were manageable by the specific entities on a standalone basis, remained NonDebtor Subsidiaries. There are approximately 50 Non-Debtor Subsidiaries. The following are
general descriptions of the Non-Debtor Subsidiaries and their business units.
(i)
Joint Ventures
43.
Certain entities that are in the Film Business, the Digital Business and the Music
Business are only partially owned by RML. They are all Non-Debtor Subsidiaries and are thus not
in bankruptcy. This includes RED, which is a domestic distribution and marketing joint venture
formed by RML and an unrelated company named EuropaCorp Films USA, Inc. (âEuropaCorp.â)
RED was created to support each partyâs domestic distribution for their respective film slates, and it
provides marketing and distribution services to both entities. RED has approximately 56 employees.
44.
In addition, RML is a minority owner of several other joint ventures that fall outside
the business units described above. None of these joint ventures are Debtors in these Cases.
(ii)
Relativity Sports
45.
None of the Relativity Group subsidiaries involved in the sports business (the
âRelativity Sports Groupâ) are in bankruptcy and are, therefore, Non-Debtor Subsidiaries in these
Cases. These entities include Relativity Sports Management, LLC (âSports Managementâ),
Relativity Sports, LLC (âSports LLCâ), Relativity Sports Enterprises, LLC (âSports Enterprisesâ),
and together with Sports LLC, âSports Holdingsâ), and their subsidiaries.
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On July 28, 2015, YC Athletic Holdings, LLC exercised warrants to purchase 50%
of the equity in Sports Management, and RML thus owns 50% of Sports Management. Sports
Management, in turn, owns 59.71% of Sports LLC, with the remaining 40.29% of Sports LLC
owned by certain individuals and other entities. Sports LLC owns each of Sports Enterprises and
Relativity NEXT, LLC, with Sports Enterprises owning each of the other Relativity Sports Group
entities.
47.
The Relativity Sports Group represents and manages over 300 professional athletes in
Major League Baseball, the National Basketball Association and the National Football League.
Relativity Sports Group currently has 77 employees, including over 20 agents and representatives
across the country, and provides career management for multiple players.
48.
RML provides certain overhead and support services to Sports Holdings under a
Services Agreement, dated as of August 14, 2012, as modified by a letter agreement dated as of July
31, 2014. Specifically, RML provides Sports Holdings with office space, logistics, human
resources, payroll, accounting, accounts receivable and payable, legal, and IT services. Sports
Holdings pays a fee to RML for such services.
(iii)
Relativity Education
49.
None of the Relativity Group subsidiaries involved in its education division are in
bankruptcy and are, therefore, Non-Debtor Subsidiaries in these Cases. These entities include
Relativity Education, LLC (âRelativity Educationâ) and its direct and indirect subsidiaries
(collectively, âRelativity Universityâ). Relativity Education is 36% owned by RML, with the
remaining 64% owned by a number of entities outside of the Relativity Group.
50.
Relativity University is a for-profit accredited branch campus of Hussian School of
Art. It offers an array of film, media, performing arts, and graphic arts Bachelor of Fine Arts
programs. The programs include curricula developed in collaboration with industry insiders, with
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classes taught by working professionals operating from an active Hollywood production studio.
Relativity owns a minority stake in the Relativity University subsidiaries.
51.
RML provides human resource services to Relativity Education under a Services
Agreement, dated March 26, 2013, and can from time to time provide other services. Relativity
Education pays a fee to RML for such services.
E.
Prepetition Indebtedness and Capital Structure
52.
The following is a summary of the Debtorsâ pre-petition secured indebtedness (all
terms as defined below), with further description of each debt and the terms thereof provided below:
Debt
Amount Outstanding
Cortland TLA/TLB Facility
$361,611,038 plus accrued interest
Manchester Credit Facility
$137,078,557 plus accrued interest
P&A Facility
$116,292,818 plus accrued interest
Production Loans
$37,810,909 plus accrued interest
Ultimates Facility
$27,789,945 plus accrued interest
(i)
RML Level Debt
(a)
53.
Cortland Term Loan A/Term Loan B Financing Facility
On May 30, 2012, RML and certain of its subsidiaries (the âCortland Borrowersâ)
entered into a Financing Agreement with a variety of lenders that are parties to the agreement (the
âCortland Lendersâ), Cortland Capital Market Services LLC (âCortlandâ), as collateral and
administrative agent, and CB Agency Services, LLC (âCBAâ), as origination agent (collectively
with all the related loan and other documents identified therein, the âCortland TLA/TLB
Financing Agreementâ).
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The financing extended under the Cortland TLA/TLB Financing Agreement was
divided into two tranches: (i) a tranche A term loan in the aggregate principal amount of
$125,000,000 (the âCortland Term Loan Aâ); and (ii) a tranche B term loan in the aggregate initial
principal amount of $125,000,000 (the âCortland Term Loan Bâ, and together with the Cortland
Term A Loan, the âCortland TLA/TLB Facilityâ). Prior to an Event of Default, the Cortland Term
Loan A bore interest at 10% per annum, payable quarterly in cash, while the Cortland Term Loan B
bore PIK interest at 15% per annum. Following an Event of Default, the Cortland Term Loan A
bears interest at 12% per annum, payable quarterly in cash, while the Cortland Term Loan B bears
PIK interest at 17% per annum. The Cortland TLA/TLB Facility is secured by substantially all of
the assets of the Cortland Borrowers. Under the Cortland TLA/TLB Financing Agreement,
Relativity Holdco (together with the Cortland Borrowers, the âCortland Obligorsâ) guaranteed the
obligations of the Cortland Borrowers under the Cortland TLA/TLB Financing Agreement, and has
pledged 100% of its equity interest in RML.
55.
Under the Cortland TLA/TLB Financing Agreement, prior to the occurrence of an
Event of Default, payments of principal are distributed ratably to all of the Cortland Lenders. After
the occurrence and during the continuance of an Event of Default, Cortland may (and at the direction
of certain of the Cortland Lenders shall) apply the proceeds of the collateral in an order that repays
interest and principal on the Cortland Term Loan A in full before repaying any of the interest or
principal on the Cortland Term Loan B.
56.
The Cortland TLA/TLB Facility matured on June 1, 2015 (the âCortland Maturity
Dateâ). As of the Petition Date, approximately $145,834,693 was outstanding under the Cortland
Term Loan A and approximately $215,776,345 was outstanding under the Cortland Term Loan B,
for a total of approximately $361,611,038 plus accrued interest outstanding under the Cortland
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TLA/TLB Facility. As more fully described in the section below regarding the events that have led
to the filing of the Chapter 11 Petitions, the lenders in the Cortland Term Loan A (the âTerm Loan
A Lendersâ) have traded their debt and it is currently held by lenders in the Cortland Term Loan B
(the âTerm Loan B Lendersâ).
(b)
57.
Manchester Credit Facility
On May 30, 2012, RML and each of the other Cortland Borrowers (the âManchester
Borrowersâ) entered into an additional credit facility with Manchester Securities Corporation (the
âManchesterâ) under the Second Amended and Restated Credit Agreement, as amended by
Amendment No. 1 thereto, dated September 30, 2014 (collectively with all the related loan and other
documents identified therein, the âManchester Credit Facilityâ). As of the Petition Date,
approximately $137,078,557 plus accrued interest was outstanding under the Manchester Credit
Facility.
58.
The obligations under the Manchester Credit Facility bear PIK interest at 7.5% per
annum, and mature on May 30, 2016. The Manchester Credit Facility is subordinated to the
Cortland TLA/TLB Facility and is secured by substantially all of the assets of the Manchester
Borrowers (as the same collateral securing the repayment of the Cortland TLA/TLB Facility).
Relativity Holdco (together with the Manchester Borrowers, the âManchester Obligorsâ)
guaranteed the obligations of the Manchester Borrowers under the Manchester Credit Facility.
(ii)
Debt at the Subsidiary Level
59.
As part of the Film Business, many of the Debtors enter into various agreements to
finance the production and distribution of films. Films that are in pre-production are not financed,
and the cost of that is largely paid with operating cash flow. Once in production, the films generally
go through three distinct stages of secured financing that correspond to the phase of production,
completion or distribution that the film is in at the time. The three stages are: production loans,
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prints and advertising (âP&Aâ) financing and ultimates financing, all as described below. After
entering the secured financing process, and at the completion of each phase of the filmâs evolution,
the film collateral moves from the prior financing facility to the next.
(a)
60.
Production Loans
Relativity finances the production of its films through a combination of equity (i.e.,
RML contributing funds to the production entity as equity) and individual production loans (the
âProduction Loansâ) that are secured by the respective films and their related assets, including, tax
credits and/or rebates, international sales estimates and international receivables. The Production
Loans are non-recourse to RML.
61.
As of the Petition Date, the following are the only two outstanding Production Loans:
(i)
On August 5, 2014, Armored Car Productions, LLC (a Debtor), as borrower
(âACPâ), entered into an Amended and Restated Loan and Security
Agreement with OneWest Bank N.A., as agent, and Surefire Entertainment
Capital, LLC, as lender (the âA&R Armored Car LSAâ), for loans up to
$24,090,353 (inclusive of fees and the Interest and Fee Reserve (as defined in
the A&R Armored Car LSA)) for the purpose of acquiring, producing,
completing and delivering a motion picture not yet released, and the payment
of related financing costs (the âArmored Car Loanâ).5 A portion of the
Armored Car Loan was syndicated to City National Bank. The Armored Car
Loan matures on May 31, 2016, bears interest at a rate of the Prime Rate plus
3.875% or LIBOR plus 5.875%, and is secured by all of the assets of ACP,
excluding the Excluded Collateral (as defined in the A&R Armored Car LSA.
As of the Petition Date, approximately $21,576,218 plus accrued interest was
outstanding under the Armored Car Loan.
(ii)
On September 5, 2014, DR Productions, LLC (a Debtor), as borrower
(âDRPâ), entered into a Loan and Security Agreement with OneWest Bank
N.A., as agent and lender (the âDR LSAâ), for loans up to $14,688,456
(inclusive of fees and the Interest and Fee Reserve (as defined in the DR
LSA)) for the purpose of acquiring, producing, completing and delivering a
motion picture not yet released, and the payment of related financing costs
(the âDR Loanâ). The DR Loan matures on July 29, 2016, bears interest at a
rate of the Prime Rate plus 1.00% or LIBOR plus 3.00%, and is secured by
5
The A&R Armored Car LSA amends and restates in its entirety that certain Loan and Security Agreement, dated as of
July 9, 2014, by and among the Borrower, the Agent and OneWest Bank N.A.
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all of the assets of DRP, excluding the Excluded Collateral (as defined in the
DR LSA. As of the Petition Date, approximately $12,272,477 plus accrued
interest was outstanding under the DR Loan.
62.
In addition, in connection with the production of the films 3:10 TO YUMA and THE
FORBIDDEN KINGDOM, Debtors Yuma, Inc. and J & J Project, LLC (the âVine/Verite Borrowersâ)
entered into certain loan and security agreements with Verite Capital Onshore Loan Fund LLC,
which were subsequently transferred Vine Film Finance Fund II LP (collectively, the âVine/Verite
Loansâ). Each of the Vine/Verite Loans bear interest at LIBOR plus 5.00%, are collateralized by
the assets of the respective films, and are otherwise non-recourse to the Vine/Verite Borrowers. The
Vine/Verite Loans have matured and are in default. As of the Petition Date, $3,962,215 was
outstanding under the Vine/Verite Loans.
(b)
63.
The P&A Facility
The Debtors also finance their P&A budgets. P&A comes into play as film
production finishes and the film moves into post-production. During this phase, editing occurs,
special effects and music are added, trailers are created, the release of the film is advertised, and then
it moves on to distribution.
64.
On June 30, 2014, certain of RMLâs subsidiaries (the âP&A Borrowersâ),6 together
with RMLDD and RMLDD Financing, LLC (âRMLDD Financingâ), as accommodation pledgors,
entered into their current P&A financing facility, the Second Amended and Restated Funding
Agreement with Macquarie US Trading LLC LLC (âMacquarieâ), as Agent for the Lenders,
Macquarie Bank Limited, as Post-Release Lender, and RKA Film Financing, LLC, as Pre-Release
Lender and Pre-Release Lender Agent (as all such terms are defined therein) (collectively, the âP&A
6
The P&A Borrowers are (1) 3 Days to Kill Productions, LLC; (2) Best of Me Productions, LLC; (3) Blackbird
Productions, LLC; (4) Brick Mansions Acquisitions, LLC; (5) Furnace Films, LLC; (6) RML Echo Films, LLC;
(7) RML Oculus Films, LLC; (8) RML November Films, LLC; and (9) RML Somnia Films, LLC, all of which are
Debtors.
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Lendersâ)7, as amended by the First Amendment, dated August 26, 2014 (collectively with all the
related loan and other documents identified therein, the âP&A Funding Agreementâ). The loans
under the P&A Funding Agreement are divided into two types: (i) specific loans each made in
connection with an individual film prior to its theatrical release that bear interest at 5.5% per annum
for the first 12 months and 11.5% thereafter (the âPre-Release P&A Loansâ); and (ii) specific loans
each made in connection with an individual film in the calendar week following the theatrical release
of a film that bear interest at 6.9% per annum for the first 12 months and 9.9% per annum thereafter
(the âPost-Release P&A Loans,â and together with the Pre-Release P&A Loans, the âP&A
Facilityâ). In addition, each loan under the P&A Facility is subject to an original issue discount of
6.5% for the Pre-Release P&A Loans and 3% for Post-Release P&A Loans.
65.
Each Pre-Release P&A Loan matures the earlier of December 31, 2015 or 18 months
after its respective funding date. Each Post-Release P&A Loan matures 18 months after its
respective funding date. The P&A Facility is secured by the assets of the film-specific entities,
including the domestic distribution agreements for the films financed under the P&A Facility, the
intellectual property, picture rights, and the receipts from such films. The P&A Facility is nonrecourse to RML. RMLDD and RMLDD Financing guaranteed the obligations of the P&A
Borrowers under the P&A Facility.
66.
As of the Petition Date, approximately $83,868,538 plus accrued interest was
outstanding under the Pre-Release P&A Loans and $32,424,280 plus accrued interest was
outstanding under the Post-Release P&A Loans.
7
Claren Road Credit Master Fund Ltd., an original lender under the P&A Funding Agreement, is no longer a party
thereto.
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(c)
67.
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Ultimates Loan
Following a filmâs theatrical release, the value of the future cash flows for the film in
all media (e.g., theatrical, DVD, digital and television), referred to as the âUltimatesâ, serves as
collateral for a loan facility to fund a studioâs operations. The amount available under an Ultimates
loan facility is determined by the âborrowing base,â which is a formula-based calculation based on
the portion of an Ultimateâs cash flow that has not yet been collected (called the âto comeâ portion).
Here, Relativityâs Ultimates value is calculated by Relativity itself or the producer and distributor of
the film or a major studio (if other than Relativity), and is then reviewed and validated by a thirdparty valuation firm on behalf of the Ultimates lenders.
68.
On September 25, 2012, RMLDD Financing, which is one of the Debtors, entered
into a Credit, Security, Guaranty and Pledge Agreement with OneWest Bank N.A., as
Administrative Agent, Issuing Bank, Joint Lead Arranger and Joint Bookrunner (as such terms are
defined therein) (âOneWestâ), as amended from time to time, by those certain and various
amendments thereto, including and through Amendment No. 17, dated April 29, 2015 (collectively
with all the related loan and other documents identified therein, the âUltimates Credit
Agreementâ). Following the closing date of September 25, 2012, the Ultimates facility was
syndicated to Barclays Bank PLC, City National Bank, Comerica Bank, First Republic Bank, Bank
Hapoalim B.M. and Wilshire Bank (collectively, with OneWest, the âUltimates Lendersâ).
69.
The Ultimates Credit Agreement provides RMLDD Financing with a senior secured
revolving credit facility for up to $202.5 million (the âUltimates Facilityâ). The obligations under
the Ultimates Facility incur interest at LIBOR plus 3.75% with a LIBOR floor of 0.50% or the
Alternate Base Rate (as defined in the Ultimates Credit Agreement) plus 2.75%, as well as
commitment, unused and collateral and administrative fees, which are calculated and payable
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quarterly. The obligations of RMLDD Financing under the Ultimates Facility are guaranteed by
certain of the Debtors (the âUltimates Guarantorsâ).8
70.
The Ultimates Facility matured on May 30, 2015, and is secured by the right, title,
and interest in all personal property, and tangible and intangible property of debtor RMLDD
Financing and the Ultimates Guarantors. This covers all property wherever located, currently owned
presently or later created or acquired, and should include but not be limited to, all goods, accounts,
instruments, inter-company obligations, contract rights, partnership and joint venture interests,
documents, chattel paper, general intangibles, goodwill, equipment, machinery, inventory,
investment property, copyrights, trademarks, trade names, and insurance policies.
71.
On July 17, 2015, OneWest swept the balances contained in (a) a bank account at
OneWest that serves as the operating account for RMLDD Financing, which maintained a balance of
approximately $1,700, and (b) a bank account at OneWest in RMLDD Financingâs name that is used
to pay participations and residuals to the producers, performers, writers and other individuals or
entities entitled to compensation for the exhibition of the content developed, produced, and/or
distributed by the Debtors and the Non-Debtor Subsidiaries (all as further explained in Part II
below), which maintained a balance of approximately $17.9 million. The sweeps completely
depleted the balances of those accounts and, on information and belief, the funds were applied to the
outstanding balance of the Ultimates Facility. As a result, as of the Petition Date, approximately
$27,789,945 plus accrued interest was outstanding under the Ultimates facility.
8
The Ultimates Guarantors are RML Distribution Domestic, LLC, RML Distribution International, LLC, RML
Acquisition I, LLC, RML Acquisition II, LLC, RML Acquisition III, LLC, RML Acquisition IV, LLC, RML Acquisition
V, LLC, RML Acquisition VI, LLC, RML Acquisition IX, LLC, RML Acquisition XI, LLC, Movie Productions, LLC,
Safe Haven Productions, LLC, 21 And Over Productions, LLC, Snow White Productions, LLC, Malavita Productions,
LLC, Don Jon Acquisitions, LLC, Paranoia Acquisitions, LLC, RML Turkeys Films, LLC, Furnace Films, LLC, 3 Days
to Kill Productions, LLC, RML Oculus Films, LLC, Brick Mansions Acquisitions, LLC, RML November Films, LLC,
RML Echo Films, LLC, RML Hector Films, LLC, Best of Me Productions, LLC, RML Solace Films, LLC, Blackbird
Productions, LLC, RML Lazarus Films, LLC, RML WIB Films, LLC and Black Or White Films, LLC, all of which are
Debtors in these Cases.
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(iii)
Intercreditor Agreements
72.
The relationship among the Debtorâs lenders are governed by the following
intercreditor and subordination agreements:
73.
(i)
Pursuant to the Amended and Restated Subordination Agreement, dated as of
December 21, 2012, between Manchester and Manchester Library Company
LLC (âManchester Libraryâ), Relativity Holdco, RML, each of the
Cortland Borrowers, Cortland, CBA (as agent for a now fully repaid P&A
facility), and Macquarie, the security interests and payment rights of the
Manchester Credit Facility are subordinated to the Cortland TLA/TLB
Facility and the P&A Facility.
(ii)
Pursuant to the Third Amended and Restated Intercreditor and Subordination
Agreement, dated as of June 30, 2014, between Macquarie and Cortland, the
security interests and certain payment rights of the Cortland TLA/TLB
Facility are subordinated to the P&A Facility.
(iii)
Pursuant to the Subordination and Intercreditor Agreement, dated as of
September 25, 2012, among OneWest, Cortland, Manchester and Manchester
Library, the security interests and certain payment rights of the Cortland
TLA/TLB Facility and the Manchester Credit Facility are subordinated to the
Ultimates Facility.
In addition, various films are subject to individual-film intercreditor agreements
among agents or lenders for some or all of the Cortland TLA/TLB Facility, the Manchester Credit
Facility, the Ultimates Facility, the P&A Facility and the production loan for such films, among
other parties.
(iv)
Unsecured Trade Debt
74.
The Debtorsâ unsecured trade creditors include vendors providing services to the
Relativity Group for print and advertising services, production-related services and products, and
other services necessary to run a business on a day to day basis. According to the Debtorsâ books
and records, as of the Petition Date, there is approximately $89.9 million in unsecured trade vendor
debt.
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(v)
Unsecured RED Loan
75.
Pursuant to a series of agreements, RML and EuropaCorp. formed RED as a joint
venture to support each joint venture partnerâs domestic distribution and marketing needs. As part of
the formation of RED, RED made an unsecured loan to RML (the âRED Loanâ), which RML
repays through amortization payments equal to 50% of the quarterly overhead of RED. If RML
Fails to make the amortization payments, it becomes obligated to make capital contributions in an
amount equal to the corresponding amortization payment. However, as the sole holder of Class B
membership interests in RED, RML is also the sole beneficiary of the amounts repaid with respect to
the loan and has the unilateral right to forgive the balance of the loan at any time. As of the Petition
Date, $70,550,262 was outstanding under the RED Loan.
F.
Events Leading to Debtorsâ Chapter 11 Filing
76.
Prior to the Cortland Maturity Date, Relativity sought to raise additional funds for its
operations and to service existing debt. These efforts resulted in the issuance of 5,000,000 Class E
Units in Relativity Holdco, in exchange for $62,500,000 gross cash proceeds, to entities affiliated
with an individual investor and VII Peaks on or about May 11, 2015. Simultaneously with the
issuance of such equity interests, and at various times subsequent thereto, holders of the aggregate
amount of 96.5296 Class C Units exchanged such Class C Units for an aggregate of 6,695,648 Class
E Units pursuant to exchange agreements entered into concurrent with the Class E Unit issuance on
May 11, 2015.
77.
On the Cortland Maturity Date, over $320 million in debt became due and payable.
Notwithstanding the previous equity issuances, Relativity was unable to make payment on the
Cortland TLA/TLB Facility. Accordingly, on June 1, 2015, Relativity entered into a Forbearance
Agreement with a majority of Term Loan A Lenders and a majority of Term Loan B Lenders (the
âTLA/TLB Forbearance Agreementâ). On the same day, Relativity executed a Forbearance
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Agreement with the Ultimates Lenders under the Ultimates Facility (the âUltimates Forbearance
Agreementâ), and thereafter, on June 5, 2015, the Debtors entered into a Forbearance Agreement
with the P&A Lenders under the P&A Facility (the âP&A Forbearance Agreement,â and
collectively with the TLA/TLB Forbearance Agreement and the Ultimates Forbearance Agreement,
the âForbearance Agreementsâ). On June 25, 2015, the Forbearance Agreements expired in
accordance with their terms.
78.
In early July 2015, Catalyst Capital Group, a Toronto-based hedge fund (âCatalystâ)
purchased the outstanding Cortland Term Loan A debt, and became the sole lender under the
Cortland Term Loan A. Anchorage Capital Master Offshore, Ltd. and Luxor Capital LLC, as
lenders under the Cortland Term Loan B (the âPurchasing TLB Lendersâ), promptly provided
notice of their intent to exercise their right under Section 10.17 of the Cortland TLA/TLB Financing
Agreement to purchase the outstanding debt under the Cortland Term Loan A. On July 9, 2015, the
Purchasing TLB Lenders, along with Catalyst (also a lender under the Cortland Term Loan B)
purchased all of the Cortland Term Loan A debt.
79.
On July 16, 2015, the Cortland Borrowers and the Cortland Lenders entered into
Amendment No. 1 to the Cortland TLA/TLB Financing Agreement, pursuant to which certain of the
Cortland Lenders funded $15 million of additional Term Loans (as defined therein), denominated as
âTerm A-1 Loans,â of which $7.5 million was funded on July 16, 2015, and $7.5 million was
funded on July 20, 2015, all with a maturity date of July 27, 2015. Interest on the Term A-1 Loans is
payable in cash at a rate of 15% per annum. On July 27, 2015, the Term A-1 Loans matured.
80.
The Debtors experienced severe liquidity constraints and increasing limitations
imposed by the Forbearance Agreements and the new debt issuances. With over $350 million in
outstanding matured secured debt and unable to finalize any further financing, the Debtors
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determined it was in their best interests to file for bankruptcy protection. A more detailed
description of the events leading to the chapter 11 Cases is found in the Declaration of Timothy R.
Coleman in Support of Debtorsâ Motion for Entry of Interim and Final Orders (I) Authorizing the
Debtors to (A) Obtain Post-Petition Financing and (B) Use Cash Collateral; (II) Granting the
Prepetition Lenders Adequate Protection; (III) Scheduling a Final Hearing; and (IV) Granting
Related Relief, filed concurrently herewith (the âColeman Declarationâ).
II.
First Day Pleadings
81.
Contemporaneously herewith, the Debtors have filed a number of First Day
Pleadings. I believe that, among other things, the relief requested in the First Day Pleadings is
necessary to enable the Debtors to operate with minimal disruption during the pendency of these
Cases and to maintain value as a going concern, as well as support the efficient and economical
administration of these Cases. A description of the relief requested and the facts supporting each of
the First Day Pleadings is set forth below.
A.
Administrative Motions
(i)
Debtorsâ Motion for an Order Authorizing the Joint Administration of Their
Related Chapter 11 Cases (the âJoint Administration Motionâ)
82.
As stated above, there are 145 Relativity entities that filed Chapter 11 Petitions on the
Petition Date, many of which are part of the same business groups under RML and/or are otherwise
related. The Debtors estimate that, among the 145 Debtor entities, there are more than 1,000
creditors and other parties-in-interest in these Cases, whose interests may not be limited to interests
in any one particular Debtor. Many of the motions, hearings, and orders that will be filed in the
chapter 11 Cases will almost certainly affect most, if not all, of the Debtors. I believe that the
separate administration of the Debtorsâ cases will result in substantial duplication of pleadings and
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prosecution of matters, which translates into significant cost, inefficiency and, potentially, confusion
among parties-in-interest.
83.
Accordingly, in the Joint Administration Motion, the Debtors request entry of an
order authorizing the joint administration of their chapter 11 Cases for procedural purposes only.
Specifically, the Debtors request that the Court maintain one file and one docket for all of the
chapter 11 Cases under the case number and name of Relativity Fashion, such that the chapter 11
Cases be administered under one consolidated caption and that an entry be made on the docket of
each of the Debtorsâ chapter 11 Cases, other than Relativity Fashion, to indicate the joint
administration of the chapter 11 Cases thereunder. The Debtors also seek authority to file the
monthly operating reports required by the Operating Guidelines and Reporting Requirements for
Debtors in Possession and Trustees, issued by the Office of the United States Trustee for the
Southern District of New York (the âU.S. Trusteeâ) on a consolidated basis.
84.
Given the foregoing, I believe that an order directing joint administration of the
chapter 11 Cases will reduce fees and costs by avoiding duplicative filings and objections, and will
allow the U.S. Trustee and all parties in interest to monitor the chapter 11 cases with greater ease and
efficiency, which will inure to the benefit of all interested parties, and will not harm the substantive
rights of any party-in-interest.
(ii)
Debtorsâ Motion for the Entry of an Order (I) Authorizing the Debtors
to (A) Prepare a List of Creditors in Lieu of Submitting a Formatted
Mailing Matrix, (B) File a Consolidated List of the Debtorsâ 50 Largest
Unsecured Creditors, and (C) Mail Initial Notices, and (II) Approving
the Form and Manner of Notifying Creditors of the Commencement
of the Debtorsâ Chapter 11 Cases (the âCreditor Matrix Motionâ)
85.
As described below, the Debtors are not in a position to file their Schedules and
Statements as (defined below) on the Petition Date and, I have been informed by legal counsel,
without further relief, they would be required to each file a list of creditors and their addresses.
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In the Creditor Matrix Motion, the Debtors seek entry of an order (a) authorizing the
Debtors to prepare a consolidated list of creditors in lieu of submitting any required mailing matrix,
(b) authorizing the Debtors to file a consolidated list of the Debtorsâ 50 largest unsecured creditors
(the âTop 50 Creditors Listâ), (c) authorizing the Debtors to mail initial notices through their
proposed claims and noticing agent, Donlin Recano & Company, Inc. (âDonlin Recanoâ or the
âClaims and Noticing Agentâ), (d) waiving the requirement that each Debtor file a list of creditors
on the Petition Date, and (e) approving the form and manner of notifying creditors of
commencement of the Debtorsâ chapter 11 cases (the âNotice of Commencementâ).
87.
The Debtors have worked with the Claims and Noticing Agent to prepare a single,
consolidated list of the Debtorsâ creditors in electronic format, which the Debtors are prepared to
make available in electronic form to any party-in-interest who requests it. I believe that preparing a
consolidated list of creditors in lieu of individual creditor matrices will permit the Claims and
Noticing Agent to promptly provide notice to all applicable parties, maximize efficiency and
accuracy, and reduce costs. In addition, converting the Debtorsâ computerized information to a
format compatible with the matrix requirements would be a burdensome task and would greatly
increase the risk and recurrence of error with respect to information already intact on computer
systems maintained by the Debtors or their agents.
88.
The Debtors also propose that the Claims and Noticing Agent undertake all mailings
directed by the Court, the U.S. Trustee, or as required by the Bankruptcy Code or the Federal Rules
of Bankruptcy Procedure (the âBankruptcy Rulesâ). I believe that using the Claims and Noticing
Agent for this purpose will maximize efficiency in administering the chapter 11 cases and will ease
administrative burdens that otherwise fall upon the Court and the U.S. Trustee.
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Finally, because many of the Debtors have many creditors in common and, in many
cases, operate as an integrated business enterprise, the Debtors request authority to file a single,
consolidated list of their 50 largest general unsecured creditors instead of compiling separate top 20
creditor lists for each individual Debtor. I believe that preparing separate lists would consume an
excessive amount of the Debtorsâ time and resources.
(iii)
Debtorsâ Application for an Order Appointing Donlin Recano &
Company, Inc. as Claims and Noticing Agent for the Debtors
Pursuant to 28 U.S.C. § 156(C), 11 U.S.C. § 105(A) and Local
Rule 5075-1 (the âClaims and Noticing Agent Retention Applicationâ)
90.
In the Claims and Noticing Agent Retention Application, the Debtors seek entry of an
order engaging and appointing Donlin Recano as the Debtorsâ Claims and Noticing Agent in
connection with, among other things, the distribution of notices and the administration, maintenance,
processing, and docketing of proofs of claim filed in the Debtorsâ chapter 11 cases.
91.
Prior to the Petition Date, counsel for the Debtors solicited and reviewed engagement
proposals from five court-approved claims and noticing agents. Thereafter, counsel for the Debtors
requested that three of the claims and noticing agents provide their best and most competitive bids in
a multi-round process. The proposals were then compared and Donlin Recanoâs bid was selected as
the most competitive.
92.
The Debtors believe that, based on all engagement proposals obtained and reviewed,
that Donlin Recanoâs rates are competitive and reasonable given Donlin Recanoâs quality of services
and expertise. I have also been informed that Donlin Recano is equipped to handle the volume of
mailings and claims involved in these chapter 11 Cases, and that Donlin Recano has acted as the
claims and noticing agent in numerous cases of comparable size, including cases in this Court. I
have further been informed that Donlin Recano is not materially connected with any of the Debtors,
their creditors, other parties in interest, the United States Trustee, or any person employed by the
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Office of the United States Trustee, and that to the best of Donlin Recanoâs knowledge, after due
inquiry, Donlin Recano does not, by reason of any direct or indirect relationship to, connection with,
or interest in any of the Debtors, hold or represent any interest materially adverse to any of the
Debtors, their estates, or any class of creditors or equity interest holders with respect to the matter
upon which it is to be engaged.
93.
Accordingly, I believe that the employment of Donlin Recano as Claims and Noticing
Agent is necessary, appropriate, and in the best interests of the Debtorsâ estates.
(iv)
Debtorsâ Motion for an Order Authorizing the Establishment
of Certain Notice, Case Management and Administrative
Procedures (the âCase Management Motionâ)
94.
In the Case Management Motion, the Debtors seek to establish certain notice, case
management and administrative procedures in these chapter 11 cases (the âCase Management
Proceduresâ). Specifically, the Case Management Motion, among other things, seeks entry of an
order that the Debtors believe would (a) establish streamlined and less onerous requirements for
filing and serving notices, motions, applications, declarations, objections, responses, memoranda,
briefs, supporting documents and other documents filed in these chapter 11 Cases (collectively, the
âCourt Papersâ); (b) delineate less burdensome standards for notices of hearings and agenda letters;
(c) fix periodic omnibus hearing dates and articulate mandatory and uniform guidelines for the
scheduling of hearings and objection deadlines; and (d) limit matters that are required to be heard by
the Court.
95.
Given the size and scope of these cases (as described above), I believe that the Case
Management Procedures will facilitate service of Court Papers that will be less burdensome and
costly than serving such pleadings on every potentially interested party, which, in turn, will
maximize the efficiency and orderly administration of these chapter 11 cases, while at the same time
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ensuring that appropriate notice is provided, particularly to parties who have expressed an interest in
these Cases and those directly affected by a request for relief.
(v)
Debtorsâ Motion for an Order Extending the Time to File
(I)(A) Schedules of Assets and Liabilities, (B) Schedules of Current
Income and Expenditures, (C) Schedules of Executory Contracts and
Unexpired Leases and (D) Statements of Financial Affairs and (II) Reports
of Financial Information (the âSchedules and Statements Motionâ)
96.
In the Schedules and Statements Motion, the Debtors seek entry of an order extending
the deadline to file their (i)(a) schedules of assets and liabilities, (b) schedules of current income and
expenditures, (c) schedules of executory contracts and unexpired leases, and (d) statements of
financial affairs, as required by section 521 of the Bankruptcy Code and Rules 1007(b)(1) and
1007(c) of the Bankruptcy Rules (the âSchedules and Statementsâ), to that date which is 45 days
after the Petition Date; and (ii)(a) reports of financial information with respect to entities in which
the Debtorsâ estates hold a controlling or substantial interest (the â2015.3 Reportsâ) or
(b) alternatively, a motion seeking a modification of the requirements to file the 2015.3 Reports, to
that date which is 30 days after the meeting of creditors to be held pursuant to section 341 of the
Bankruptcy Code (the â341 Meetingâ), without prejudice to the Debtorsâ ability to request
additional time should it become necessary.
97.
The nature and scope of the Debtorsâ operations require them to maintain voluminous
records and intricate accounting systems. I believe that an extension of the deadline for filing the
Debtorsâ Schedules and Statements is warranted in light of the complexity and diversity of the
Debtorsâ businesses, the limited staff available to perform the required internal review of their
financial records and affairs, the numerous critical operational matters that their accounting and legal
personnel must address in the early days of these chapter 11 Cases, the pressure incident to the
commencement of these chapter 11 Cases and the fact that various prepetition invoices may not have
yet been received or entered into their accounting systems. I believe that focusing the attention of
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the Debtorsâ key accounting and legal personnel on critical operational and chapter 11 compliance
issues during the early days of these chapter 11 Cases will help the Debtors make a smoother
transition into chapter 11 and, therefore, ultimately will maximize the value of their estates for the
benefit of creditors and all parties-in-interest.
98.
Many of the Debtors hold a substantial or controlling interest in other entities within
the Relativity Group, including complex and sizeable businesses. I believe that an extension of the
time for filing the 2015.3 Reports is warranted given the size, complexity and geographic reach of
the Debtorsâ businesses, along with the substantial burdens that will be imposed on the Debtors if
they must comply with Bankruptcy Rule 2015.3 without sufficient time to gather the requisite
information, and/or seek a modification of the requirements, prior to a 341 Meeting. I also believe
that extending the deadline for the initial 2015.3 Reports will enable the Debtors to work with their
financial advisors and the U.S. Trustee to determine the appropriate nature and scope of the 2015.3
Reports and any proposed modifications to the reporting requirements established by Bankruptcy
Rule 2015.3.
B.
Operational Motions Requesting Immediate Relief
(i)
Debtorsâ Motion for Entry of Interim and Final Orders (A) Authorizing, but
not Directing, the Debtors to Continue Prepetition Insurance Coverage and
Pay Prepetition Obligations Relating Thereto and (B) Authorizing, but not
Directing, all Financial Institutions to Honor all Related Payment Requests
(the âInsurance Motionâ)
99.
In the Insurance Motion, the Debtors seek authority to continue to administer their
prepetition insurance coverage and to pay prepetition obligations, including those under their
premium financing agreements, and to authorize financial institutions to receive, process, honor and
pay all related checks and electronic payment requests, but solely to the extent the Debtors have
sufficient funds standing to their credit with such financial institutions.
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In connection with the operation of their businesses, the Debtors maintain workersâ
compensation programs and various liability, property, and other insurance programs (collectively,
the âInsurance Programsâ) through several different insurance carriers. As of the Petition Date,
the Debtors owe aggregate premiums of $12,694 to two Insurance Carriers for policy renewals that
occurred on July 28, 2015.
101.
Most of the Debtorsâ Insurance Programs require annual premium payments to be
made at the beginning of the applicable policy period. Because it is not always economically
advantageous for the Debtors to pay premiums on a lump-sum basis, the Debtors finance certain of
their premiums, including, without limitation, the premium payments pertaining to the Insurance
Program covering directors and officers, employment practices, fiduciary duties, and criminal
activity. The Debtors finance such premiums pursuant to two separate commercial premium
financing agreements entered into with Bank Direct Capital Finance (collectively, the âPremium
Financing Agreementsâ).
102.
Under Premium Financing Agreements, the Debtors finance premium payments owed
on account of the Insurance Programs totaling approximately $1.1 million. The financed premium
payments were paid by Bank Direct Capital Finance to the Debtorsâ respective insurance carriers at
the beginning of the applicable policy period. In exchange, the Debtors repay Bank Direct Capital
Finance monthly installments under each of the Premium Financing Arrangements. As part of the
Premium Financing Agreements, the Debtors granted Bank Direct Capital Finance a security interest
in, among other things, any and all unearned premiums or dividends which may become payable for
any reason under the Liability and Property Insurance Programs financed.
103.
I have been informed by counsel that, under state law, the Debtors are required to
maintain a workersâ compensation program. Further, counsel has informed me that operating
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businesses in chapter 11 without liability or property coverage may be a violation of bankruptcy law
as well as a breach of certain contracts. Without insurance, I believe the Debtors would be at risk for
significant losses if accidents, casualties, natural disaster or other unforeseen events were to occur.
Further, if the Debtors were not permitted to continue the insurance policies, the Debtors would be
forced to replace the necessary coverage, which could likely only be obtained at higher than current
prices.
104.
Accordingly, I believe that maintaining the existing Insurance Programs is in the best
interests of the estate and its creditors
(ii)
Debtorsâ Motion for Entry of Interim and Final Orders (A) Authorizing, but
not Directing, the Debtors to Pay Certain Prepetition Claims of Critical
Vendors, (B) Approving Related Procedures and (C) Authorizing, but not
Directing, all Financial Institutions to Honor all Related Payment Requests
(the âCritical Vendor Motionâ)
105.
In the Critical Vendor Motion, the Debtors seek authority to pay the prepetition
obligations owed to certain vendors, suppliers, service providers, and other similar entities that are
essential to maintaining the going concern value of the Debtorsâ enterprise (the âCritical Vendorsâ).
106.
In the ordinary course of business, the Debtors do business with many of these
vendors pursuant to short term, or âspot,â purchase orders without a long-term agreement. As is
typical in distressed situations, vendors have been increasingly unwilling to extend trade credit to
the Debtors. In the months immediately preceding the Petition Date, a number of the Debtorsâ film
production and distribution suppliers have contacted management and demanded changes in
payment and credit terms or full payment of past due balances. Some of these film production and
distribution suppliers have already stopped providing goods or services to the Debtors unless the
Debtors comply with their restricted terms or pay all past due amounts in full. With regard to
television production and distribution, the Debtors currently enjoy favorable trade terms with many
of the Critical Vendors.
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Many of these vendors, which in many cases are small or independent service
providers, may be unfamiliar with the chapter 11 process and unwilling to do business on existing
terms â even assuming such parties will continue to supply the Debtors.
108.
With the assistance of my staff at FTI, the Debtors have spent significant time
reviewing and analyzing their books and records, consulting operations management and purchasing
personnel, reviewing contracts and supply agreements, and analyzing applicable laws, regulations,
and historical practice to identify certain critical business relationships and/or suppliers of goods and
servicesâthe loss of which could materially harm the Debtorsâ remaining businesses, shrink their
market share, reduce their enterprise value, and/or impair going-concern viability of their film and
television production businesses.
109.
As a result of significant analysis and review, the Debtors have identified certain
categories of Critical Vendors including: corporate technology providers, equipment providers, film
element providers, memberships in trade organizations, production staffing agencies, television
production service providers, and production location vendors. These Critical Vendors cannot be
timely and/or efficiently replaced given the highly-specialized nature of the services that they
provide.
110.
Pursuant to the Critical Vendor Motion, the Debtors therefore request authority to
condition payment to a Critical Vendor upon such partyâs written agreement to continue supplying
goods or services to the Debtors in accordance with trade terms at least as favorable to the Debtors
as those practices and programs (including credit limits, pricing, timing of payments, availability,
and other terms) in place in the 120 days prior to the Petition Date. If, however, the Debtors are
unable to reach such an agreement with a particular Critical Vendor to continue business on
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customary trade terms, the Debtors seek authority to pay, in their sole discretion, all or a portion of
such Critical Vendorâs prepetition obligations.
111.
The Debtors are requesting authority to pay $4.0 million to Critical Vendors on an
interim basis and an amount not to exceed $6.4 million prior to the final hearing on the Critical
Vendor Motion. I estimate that the $6.4 million request represents less than ten percent of the total
projected unsecured claims that may be asserted against the Debtors during these chapter 11 Cases.
112.
I have been informed by legal counsel that in order to pay the Critical Vendor claims,
the Debtors must demonstrate some business justification or necessity in favor of paying these
claims at this time. Based on the analysis conducted by FTI and the Debtors, I believe that the
Debtorsâ inability to maintain relationships with their most critical suppliers and service providers
during the pendency of these chapter 11 Cases would irreparably harm the Debtorsâ businesses,
causing catastrophic damage to their going-concern value. If given the flexibility to pay prepetition
claims to certain Critical Vendors in an amount not to exceed $6.4 million, I believe that Debtors can
maintain the going-concern value and ultimately maximize value for the benefit of their creditors.
(iii)
Debtorsâ Motion for Entry of Interim and Final Orders
Authorizing, But Not Directing, Debtors to (A) Pay Certain
Prepetition Wages and Reimbursable Employee Expenses,
(B) Pay and Honor Employee Medical and Other Benefits and
(C) Continue Employee Benefits Programs (the âWage Motionâ)
113.
In the Wage Motion, the Debtors seek authority to pay prepetition wages, salaries,
commissions and other compensation, including associated taxes, withholdings and other costs, and
certain reimbursable pre-petition employee and independent contractor expenses, as well as to
continue the Debtorsâ employee medical, insurance and other benefits programs on a post-petition
basis, including the payment and honoring of obligations relating thereto.
114.
As of the Petition Date, the Debtors, collectively, employed approximately 89 people
(the âEmployeesâ). None of the Employees are unionized. The Debtors also employ 54
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independent contractors (the âIndependent Contractors,â and together with the Employees, the
âWorkforceâ). In order to retain the Workforce, the Debtors pay and incur a number of obligations
such as compensation, deductions and payroll taxes, expense reimbursement, and depending on the
status of such member of the Workforce, health benefits, workersâ compensation benefits, paid leave
and time off, life insurance, accidental death and disability benefits, retirement and savings benefits
and other benefits that the Debtors have historically provided in the ordinary course of business
(collectively, the âEmployee Obligationsâ).
115.
In the ordinary course of business, the Debtors also contract with the Production
Staffing Agencies that provide the Debtors with various essential production-related services
including, among others, supplying and paying the Temporary Production Personnel that provide
cast and crew services and support on the productions. In the ordinary course of business, the
Debtors pay Temporary Production Personnel (the âProduction Personnel Obligationsâ) through
the Production Staffing Agencies on a bi-weekly basis, in arrears, every other Friday. As of the
Petition Date, approximately 760 Temporary Production Personnel provide services to the Debtors.
By the Wage Motion, the Debtors do not seek to pay the Production Personnel Obligations. Rather,
the Debtors seek to pay the Production Personnel Obligations in the Critical Vendor Motion
discussed below.
116.
By the Wage Motion, the Debtors seek the authority, but not the direction, to pay
certain prepetition Employee Obligations, and to continue to pay such post Employee Obligations in
the Debtors business judgement. The Employee Obligations include; wages, salaries and, with
respect to non-exempt Employees, overtime compensation when earned (the âCompensationâ);
expenses incurred by the Workforce and the Temporary Production Personnel in the scope of their
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service and on behalf of the Debtors (collectively, the âReimbursable Expensesâ); and employee
benefit plans and policies (the âEmployee Benefit Programsâ).
117.
The Debtors are seeking the authority, but not the direction, to pay prepetition
Compensation to the Workforce, provided that the amount paid to any individual Workforce member
for wages, salary or other compensation does not exceed the $12,475 priority cap under section
507(a)(4) of the Bankruptcy Code (the âPriority Capâ). The Debtors are further seeking to pay
Reimbursable Expenses that were incurred prepetition, but which have not yet been submitted and
processed by the Debtors for reimbursement. For the most part, the Debtors do not believe that they
owe outstanding amounts for the prepetition costs of the Employee Benefit Programs.
118.
In my opinion, payment of the outstanding Employee Obligations is essential to the
Debtorsâ reorganization strategy and will result in enhanced creditor recoveries through the
preservation of the going-concern value of the Debtorsâ estates. Delay or disruption in the
satisfaction of these claims could irreparably harm the Debtorsâ relationships with their Workforce
and workplace morale at a time when such morale is most critical. The amounts requested herein
represent amounts necessary for the Workforce to meet their own personal obligations. If such
payments are not made, the Workforce necessary to maintain the Debtorsâ operations, productions
and other operations may seek alternative employment, putting these operations, businesses and
productions, and therefore the value of the Debtors, at risk. The Employees and their knowledge
specific to the Debtorsâ operations, relationships with customers, vendors and third parties are
necessary to maximizing the value in connection with any restructuring plans. The loss of valuable
Workforce members at this critical stage would undoubtedly affect the Debtorsâ ability to focus on
stabilizing their business operations.
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Accordingly, I believe that the payment of the Employee Obligations, in the amount
and manner described herein, represents the Debtorsâ sound business judgment and is in the best
interest of the Debtorsâ estates and creditors. In my opinion, prompt payment of the Employee
Obligations is critical to prevent the immediate and irreparable harm to Employee morale and the
Debtorsâ ability to continue its operations without interruption.
(iv)
Debtorsâ Motion for Entry of Interim and Final Orders
Authorizing Payment of Prepetition Residuals and
Participations in the Ordinary Course of Business (the âP&R Motionâ)
120.
In the P&R Motion, the Debtors request authority to make certain residuals and
participations payments incurred in the ordinary course of business. The primary driver of the
Debtorsâ film and television library is the exploitation of the library through a variety of platforms,
including television, home video and new media. The Debtors also generate revenue from the
theatrical release of new major motion pictures and the production and licensing of programing for
television and digital exploitation (âNew Productionâ). New Production is an essential component
of the Debtorsâ business model because New Production refreshes and replenishes the library,
expands interest in library product and otherwise preserves the inherent value of the library.
121.
Pursuant to industry-wide collective bargaining agreements (âCollective Bargaining
Agreementsâ), the Debtorsâ film and television programs are produced using writers, directors,
performers and other similar persons (collectively, the âTalentâ) who are members of various guilds
and unions (collectively, the âGuilds and Unionsâ). Certain of the Debtors, as producers and
distributors of film and television programs, are signatories to such Collective Bargaining
Agreements.
122.
As part of Talentâs gross compensation package, the Collective Bargaining
Agreements require the payment of residuals, which is compensation due to the Talent represented
by their respective Guilds and Unions, or their members, for the Debtorsâ reuse of library product.
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For example, following the initial release of most film or television programs contained in the
Debtorsâ library, the Debtors must pay residuals for any subsequent exploitation of the library.
123.
Pursuant to certain of the Collective Bargaining Agreements, certain of the Debtorsâ
are contractually obligated to remit some or all of Talentâs residual compensation to a designated
employee benefit plan. Further, as is common in the film industry for certain production studios,
pursuant to these Collective Bargaining Agreements, the obligation to remit the residuals to Guilds,
in certain instances, is secured through perfected liens on all rights, title, interests and proceeds for
each film from which residuals obligation arise.
124.
In addition, the Debtors, and other studios in the United States, offer certain parties
bonuses based upon box office performance, deferments based upon gross or net proceeds, or a share
â or âparticipationâ â in a film or television programâs revenue stream through individual profit
participation or license agreements. The Debtors use participations to attract and retain name brand
producers and other Talent. In these instances, Talentâs right to receive participations is generally
independent of their right to receive residuals. Similarly, the Debtors may offer participations in
connection with obtaining intellectual property, such as the assignment of rights to a screenplay, an
exclusive license to create a film based on a book, or the use of a brand or work of art within a film
or television program. Furthermore, third party distributors of the Debtorsâ films may be entitled to
a percentage of the filmâs receipts (as well as recoupment of distribution expenses). Like residuals,
the Debtors are contractually required to pay participations.
125.
As of the Petition Date, the Debtors may owe residuals and participations up to an
aggregate amount of $28 million.
126.
I have been informed by legal counsel that the payment of prepetition residuals and
participations must be based on an articulated and valid business judgment. I believe that the ability
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of the Debtors to preserve and enhance the value of the library is directly tied to the Debtorsâ ability
to maintain a minimum level of New Production. To this end, I believe it is essential that the
Debtors honor the residual and participation obligations because the failure to make such payments
would greatly jeopardize the Debtorsâ ability to continue to develop New Production. Furthermore,
I believe that the failure to honor the residual and participation obligations would negatively impact
the Debtorsâ relationship with its Talent and other key stakeholders, including the Guilds and
Unions.
(v)
Debtorsâ Motion for Interim and Final Orders Authorizing the
Debtors to Honor Prize Obligations under Existing Production
Agreements (the âPrize Obligations Motionâ)
127.
In the Prize Obligations Motion, the Debtors seek authority to perform and honor
their obligations under RTVâs agreements to develop and produce television programing (the
âProduction Agreementsâ). Under the Production Agreements, RTV is obligated to advance
certain costs and expenses in connection with producing television programing. These costs and
expenses include prizes that are awarded to participants in the television programs produced by the
Debtors (the âPrize Obligationsâ). The participants who receive the Prize Obligations are third
party contestants and are not affiliated with the Debtors, or the Debtorsâ counterparties under the
Production Agreements.
128.
The value of the Prize Obligations is approximately $2,500,000. If the Debtors fail to
perform the Prize Obligations it would likely cause the Debtors to default under certain of the
Production Agreements, and would result in serious harm to the Debtorsâ estate. Additionally, it
would harm the participants in the television programs, who are innocent third parties, if the Debtors
failed to honor the Prize Obligations. Moreover, the negative publicity associated with the Debtorsâ
failure to honor the Prize Obligations would diminish the value and appeal of the television
programing that the Debtors have developed and sold.
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In order to capitalize on the value of the Production Agreements, the Debtors must
honor their Prize Obligations. I understand that the failure to do so would likely constitute a default
under the Production Agreements, and would likely subject the Debtors to claims by the
counterparties to the Production Agreements and other third parties, including the participants in the
television programs produced pursuant to the Production Agreements. The Debtorsâ inability to
honor their Prize Obligations would irreparably harm the Debtorsâ relationship the counterparties to
the Production Agreements, and thereby irreparably harm the Debtorsâ businesses, causing
catastrophic damage to its going-concern value.
130.
I believe that the Debtorsâ continued compliance with the Production Agreements is
critical to the success of these chapter 11 Cases. The Debtorsâ business relies on the Production
Agreements, and the ability of the Debtors to receive the value of the Production Agreements is
contingent on the Debtorsâ satisfaction of their Prize Obligations. The disruption and damage to the
Debtorsâ business that will ensue if the Debtors do not comply with their Prize Obligations far
exceed the costs associated with honoring the Prize Obligations.
(vi)
Debtorsâ Motion for Entry of Interim and Final Orders (A) Authorizing
Continued Use of Existing Cash Management System, Bank Accounts and
Business Forms, and Payment of Related Prepetition Obligations,
(B) Waiving Certain Investment and Deposit Requirements on a Limited
Basis, (C) Authorizing Continued Engagement in Intercompany
Transactions, and (D) According Administrative Expense Priority Status to
All Postpetition Intercompany Claims (the âCash Management Motionâ).
131.
In the Cash Management Motion, the Debtors seek authority to continue to use their
existing cash management system (the âCash Management Systemâ), bank accounts (âBank
Accountsâ) and business forms, and to pay related prepetition obligations, as well as the waiver of
certain investment and deposit requirements. In addition, the Debtors seek authority to continue to
engage in intercompany transactions in the ordinary course of business, and to grant administrative
expense priority status to such postpetition intercompany claims.
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In the ordinary course of their businesses, the Debtors have historically used their
Cash Management System to fund their operations as well as the operations of certain of their nonDebtor affiliates. By use of the Cash Management System, the Debtors collect, concentrate and
disburse funds generated by their business. The Cash Management System allows the Debtors to
efficiently collect and transfer the cash generated by their business and pay their financial
obligations. Further, the Cash Management System enables the Debtors to facilitate their cash
forecasting and reporting, monitor the global collection and disbursement of funds, and maintain
control over the administration of the Debtorsâ Bank Accounts. In my experience, the Debtorsâ Cash
Management System is similar to the cash management systems used by other major corporate
enterprises.
133.
The Cash Management System for the Debtorsâ film business is centered primarily on
bank accounts held by RMLDD Financing. Under that system, the Debtors collect money from
exhibiting film content developed, produced, distributed and/or owned by the Debtors and
concentrate the collected cash in a Theatrical Concentration Account and a Primary Concentration
Account (collectively, the âConcentration Accountsâ). The funds in the Concentration Accounts
are used first to pay participations and residuals, then to pay down certain credit facilities, then any
remainder is deposited in operating accounts.
134.
The Cash Management System for the Debtorsâ television and general production
business is centered primarily on bank accounts held by RML and RTV. RML and RTV maintain
operating accounts (the âOperating Accountsâ) to fund production, payroll, distribution and other
aspects of the Debtorsâ television business. RTV also maintains dozens of bank accounts used for
producing television programs (the âTV Production Accountsâ). Cash is paid into the TV
Production Accounts, generally from the Operating Accounts, on an as needed basis to pay for the
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costs and expenses incurred by the TV Production Debtors in producing television content for the
Debtorsâ television business.
135.
The Debtors also maintain several consolidated accounts that cover both the film and
television operations of the Debtorsâ businesses. These accounts are generally funded from the
Operating Accounts and are used to pay the Debtorsâ employees, as well as the Debtorâs marketing
and other miscellaneous costs. This includes the Debtorsâ Payroll Accounts , the Debtors Marketing
Account, and others.
136.
The Debtors also maintain production and collection accounts under the names of
certain of the SPVs. The Debtor SPVs were established to produce a specific film or project as part
of the Debtorsâ overall business. The Debtor SPVs maintain production accounts to pay the
expenses and costs associated with a specific film or project, and collection accounts which pool
receipts or other revenues generated by the specific production for the benefit of the lenders
affiliated with those productions.
137.
As discussed above, the Cash Management System and applicable procedures
employed by the Debtors constitute ordinary, usual, and essential business practices. In my opinion,
the Cash Management System affords the Debtors significant benefits, including, among other
things, the ability to (a) control corporate funds centrally, (b) ensure the availability of funds when
necessary, and (c) reduce costs and minimize administrative expenses by facilitating the movement
of funds and the development of more timely and accurate account balance information. Based upon
these facts, it would be unduly difficult and expensive for the Debtors to establish a new cash
management system, and forcing the Debtors to do so would unnecessarily deprive them of the
efficiencies they enjoy under the existing Cash Management System. The Debtors therefore believe
that continuing to use the existing Cash Management System is in the best interests of the estates.
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I also believe that allowing the existing Cash Management System to continue will
facilitate a smoother transition into chapter 11 and will aid the Debtorsâ restructuring efforts.
Notably, the Cash Management System includes the necessary accounting controls to enable the
Debtors, as well as creditors and the Court, if necessary, to trace amounts through the system and
ensure that all transactions are adequately documented and readily ascertainable.
139.
Based on these facts, I believe that maintenance of the existing Cash Management
System is critical to the Debtorsâ continuing business operations and is therefore in the best interests
of the Debtorsâ estates and all parties in interest, and request that the Court authorize the Debtors to
continue the maintenance of their Cash Management System during these chapter 11 Cases.
C.
Debtor-in-Possession Financing
(i)
Debtorsâ Motion for Entry of Interim and Final Orders (I) Authorizing the
Debtors to (A) Obtain Post-Petition Financing and (B) Use Cash Collateral;
(II) Granting the Prepetition Lenders Adequate Protection; (III) Scheduling
a Final Hearing; and (IV) Granting Related Relief (the âDIP Motionâ).
140.
The Debtors have obtained postpetition financing (âDIP Financingâ) from certain of
the Debtors prepetition secured lenders (the âDIP Lendersâ). The factual background and
circumstances underlying the DIP Motion are provided in the Coleman Declaration.
D.
Sale-Related Motion
(i)
Debtorsâ Motion to Shorten Time for Notice of the Hearing to Consider the
Debtorsâ Motion for (I) an Order (A) Establishing Bid Procedures for the
Sale of Substantially All of the Debtorsâ Assets, (B) Approving Stalking
Horse APA and Bidding Protections, and (C) Granting Certain Related
Relief, and (II) an Order (A) Approving the Sale of a Substantial Portion of
the Debtorsâ Assets Free and Clear of Liens, Claims, Encumbrances and
Other Interest, (B) Approving the Assumption and Assignment of Certain
Executors Contracts and Unexpired Leases Related Thereto, and
(C) Granting Certain Related Relief (the âMotion to Shorten Timeâ)
141.
Concurrently herewith, the Debtors have filed a motion (the âSale Motionâ) for an
order establishing bid procedures for the sale of substantially all of their assets (the âBid
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Proceduresâ), including the approval of the Stalking Horse APA and Bidding Protections (both as
defined therein), (the âBid Procedures Orderâ), and an order approving the sale of a substantial
portion of their assets free and clear of liens, claims, encumbrances and other interests, and
approving the assumption and assignment of certain executory contracts and unexpired leases (the
âSale Orderâ).
142.
The Sale Motion seeks to effectuate a sale of a substantial portion of the Debtorsâ
assets on a going concern basis. The Debtors believe the proposed bid procedures and sale represent
the best strategy to maximize value for the Debtorsâ various stakeholders.
143.
In addition, the DIP Lenders under the DIP Financing (and the Stalking Horse Bidder,
as defined in the Sale Motion) require that the Bid Procedures provide a streamlined and expeditious
auction and sale process. The time periods set forth in the Bid Procedures were negotiated by the
Stalking Horse Bidder and the DIP Lenders, and failure to adhere to such time periods could
jeopardize the closing of the sale of the Debtorsâ assets. It is my opinion that the continued presence
of the Stalking Horse Bidder will set a floor for the value of the Debtorsâ assets and attract other
potential buyers to bid for them, thereby maximizing the realizable value of the assets for the benefit
of the Debtors, the Debtorsâ estates, the Debtorsâ creditors, and all other parties-in-interest. If the
Debtors are not able to adhere to such negotiated time periods, the Debtors are in danger of losing
the only parties currently bound to consummate the sale of their assets.
144.
Accordingly, I believe that completing the bid process in an expeditious manner is
critical to maintaining and maximizing the value of the Debtorsâ assets. As such, and because of the
requirements of the Stalking Horse Bidder and the DIP Lenders, the Debtors believe that it is
imperative that they undertake the process contemplated by the Bid Procedures with the goal of
closing the highest and best sale transaction available to the Debtorsâ estates, as soon as possible.
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Accordingly, in the Motion to Shorten Time, the Debtors seek to shorten the time for notice of the
hearing to consider that portion of the Sale Motion that seeks entry of the Bid Procedures Order.
III.
Local Rule 1007 Disclosures
145.
Pursuant to and in accordance with Bankruptcy Rule 1007(d) and Local Rule 1007-2,
the following information is attached hereto and incorporated by reference herein:
146.
Schedule 1. Pursuant to Local Rule 1007-2(a)(3), Schedule 1 sets forth a list of the
committees formed prior to the filing of the Debtorsâ chapter 11 petitions.
147.
Schedule 2. Pursuant to Local Rule 1007-2(a)(4), Schedule 2 sets forth a list of the
names and addresses of the creditors holding the 50 largest unsecured claims against the Debtors (on
a consolidated basis), excluding insiders. This list also includes the amount of each claim, and, if
appropriate, an indication whether such claim is contingent, unliquidated, disputed or partially
secured, subject to the Debtorsâ rights to dispute the validity of any claims.
148.
Schedule 3. Pursuant to Local Rule 1007-2(a)(5), Schedule 3 sets forth a list of the
names and addresses of the creditors holding the five largest secured claims against the Debtors (on
a consolidated basis). This list also includes the amount of each claim, a brief description of the type
of collateral securing the claim, and whether the claim or lien is disputed, subject to the Debtorsâ
rights to dispute the validity of any claims. The value of the collateral securing these claims remains
undetermined.
149.
Schedule 4. Pursuant to Local Rule 1007-2(a)(6), Schedule 4 sets forth a summary of
the assets and liabilities of the Debtors on a consolidated basis, as of December 31, 2014, which has
not been audited and is subject to change.
150.
Schedule 5. Pursuant to Local Rule 1007-2(a)(7), Schedule 5 lists the number and
classes of shares of stock, debentures, and other securities of the Debtors that are held and the
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number of holders thereof, as well as a list of those held by each of the debtorâs officers and
directors and the amounts so held.
151.
Schedule 6. Pursuant to Local Rule 1007-2(a)(8), Schedule 6 sets forth a list of the
Debtorsâ property that is in the possession or custody of any custodian, public officer, mortgagee,
pledgee, assignee of rents or secured creditor (other than bank accounts which may be subject to
claims or setoff), or agent for any such entity.
152.
Schedule 7. Pursuant to Local Rule 1007-2(a)(9), Schedule 7 sets forth a list of the
premises owned, leased or held under other arrangement from which the Debtors operate their
business.
153.
Schedule 8. Pursuant to Local Rule 1007-2(a)(10), Schedule 8 sets forth a list of the
locations of the Debtorsâ substantial assets and books and records, and the nature, location and value
of any assets held by the Debtors outside the territorial limits of the United States.
154.
Schedule 9. Pursuant to Local Rule 1007-2(a)(11), Schedule 9 sets forth a list
identifying the nature and present status of each action or proceeding, pending or threatened, against
the Debtors or their property, where a judgment against the Debtors or a seizure of their property
may be imminent.
155.
Schedule 10. Pursuant to Local Rule 1007-2(a)(12), Schedule 10 sets forth a list of
the names of the individuals who comprise the Debtorsâ existing senior management, their tenure
with the Debtors and a brief summary of their relevant responsibilities and experience.
156.
Schedule 11. Pursuant to Local Rule 1007-2(b)(1)-(2)(A), Schedule 11 sets forth a
list identifying the estimated amount of the gross weekly payroll to employees (exclusive of officers
and directors) and the estimated amount to be paid to officers, directors, stockholders, and financial
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and business consultants retained by the Debtors, for the thirty-day period following the filing of the
Debtorsâ Chapter 11 Petitions.
157.
Schedule 12. Pursuant to Local Rule 1007-2(b)(3), Schedule 12 sets forth a list of the
estimated cash receipts and disbursements, net cash gain or loss, and unpaid obligations and
receivables expected to accrue but remaining unpaid (other than professional fees), for the thirty-day
period following the filing of the Debtorsâ Chapter 11 Petitions.
158.
Notwithstanding anything in this Declaration or on any of the exhibits attached hereto
to the contrary, nothing contained in this Declaration or on any of the exhibits or schedules attached
hereto is intended to be, or should be deemed or construed as, an admission with respect to: (a) the
liability for, the amount of, the enforceability of or the validity of any claim; (b) the existence,
validity, enforceability or perfection of any lien, mortgage, charge, pledge or other grant of security
for any claim; (c) the proper characterization of any transaction or financing as a sale or financing; or
(d) any interest, or lack of interest, of the Debtors in property The Debtors specifically reserve the
right to challenge any claim or any transaction or any alleged security for any claim on any and all
bases, and to seek turnover of any property to the full extent permitted under the Code.
IV.
Conclusion
159.
To minimize any loss of value to their business, the Debtorsâ immediate objective is
to engage in business as usual following the commencement of these chapter 11 Cases with as little
interruption to the Debtorsâ operations as possible. If this Court grants the relief requested in the
First Day Pleadings, I believe the prospect of achieving these objectivesâto the maximum benefit of
the Debtorsâ estates, creditors and parties in interestâwill be substantially enhanced.
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I declare under penalty of perjury that, to the best of my knowledge and after reasonable
inquiry, the foregoing is true and correct.
_/s/ Brian G. Kushner __________________
Brian G. Kushner
Chief Restructuring Officer
Relativity Holdings LLC
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Exhibit A
Debtor Lists
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CORPORATE
Relativity Holdings LLC
Relativity Media, LLC
FASHION DIVISION
Relativity Fashion, LLC
FILM DIVISION
Acquisitions Division
RML Acquisitions I, LLC
RML Acquisitions II, LLC
RML Acquisitions III, LLC
RML Acquisitions IV, LLC
RML Acquisitions V, LLC
RML Acquisitions VI, LLC
RML Acquisitions VII, LLC
RML Acquisitions VIII, LLC
RML Acquisitions IX, LLC
RML Acquisitions X, LLC
RML Acquisitions XI, LLC
RML Acquisitions XII, LLC
RML Acquisitions XIII, LLC
RML Acquisitions XIV, LLC
RML Acquisitions XV, LLC
Single Picture Division
21 & Over Productions, LLC
3 Days to Kill Productions, LLC
A Perfect Getaway, LLC
A Perfect Getaway P.R., LLC
Armored Car Productions, LLC
Best of Me Productions, LLC
Black Or White Films, LLC
Blackbird Productions, LLC
Brick Mansions Acquisitions, LLC
Brilliant Films, LLC
Brothers Servicing, LLC
Brothers Productions, LLC
Catfish Productions, LLC
CinePost, LLC
Cine Productions, LLC
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Den of Thieves Films, LLC
Don Jon Acquisitions, LLC
DR Productions, LLC
Furnace Films, LLC
Gotti Acquisitions, LLC
Guido Contini Films, LLC
Hunter Killer Productions, LLC
Hunter Killer La Productions, LLC
In The Hat Productions, LLC
J & J Project, LLC
JGAG Acquisitions, LLC
Left Behind Acquisitions, LLC
Malavita Productions, LLC
Merchant of Shanghai Productions, LLC
MB Productions, LLC
Miracle Shot Productions, LLC
Most Wonderful Time Productions, LLC
Movie Productions, LLC
One Life Acquisitions, LLC
Out Of This World Productions, LLC
Paranoia Acquisitions, LLC
Phantom Acquisitions, LLC
Relativity Films, LLC
Relativity Development, LLC
Relativity Film Finance, LLC
Relativity Film Finance II, LLC
Relativity Film Finance III, LLC
Relativity Media Distribution, LLC
Relativity Media Films, LLC
Reveler Productions, LLC
RML Bronze Films, LLC
RML Damascus Films, LLC
RML Desert Films, LLC
RML Documentaries, LLC
RML DR Films, LLC
RML Echo Films, LLC
RML Escobar Films LLC
RML Film Development, LLC
RML Hector Films, LLC
RML Hillsong Films, LLC
RML IFWT Films, LLC
RML Kidnap Films, LLC
RML Lazarus Films, LLC
RML Nina Films, LLC
RML November Films, LLC
RML Oculus Films, LLC
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RML Our Father Films, LLC
RML Romeo and Juliet Films, LLC
RML Scripture Films, LLC
RML Solace Films, LLC
RML Somnia Films, LLC
RML Timeless Productions, LLC
RML Turkeys Films, LLC
RML Very Good Girls Films, LLC
RML WIB Films, LLC
Safe Haven Productions, LLC
Sanctum Films, LLC
Santa Claus Productions, LLC
Snow White Productions, LLC
Spy Next Door, LLC
Story Development, LLC
Strangers II, LLC
Stretch Armstrong Productions, LLC
Studio Merchandise, LLC
Summer Forever Productions, LLC
The Crow Productions, LLC
Totally Interns, LLC
Tribes of Palos Verdes Production, LLC
Wright Girls Films, LLC
Yuma, Inc.
Marketing and Distribution Division
Relativity Foreign, LLC
Relativity India Holdings, LLC
Relativity Production LLC
Relativity Senator, LLC
Relativity Sky Land Asia Holdings, LLC
RML Distribution Domestic, LLC
RML Distribution International, LLC
RML Films PR, LLC
RML International Assets, LLC
RMLDD Financing, LLC
TV DIVISION
Brant Point Productions, LLC
Cisco Beach Media, LLC
Cliff Road Media, LLC
Einstein Rentals, LLC
English Breakfast Media, LLC
Great Point Productions, LLC
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Hooper Farm Music, LLC
Hooper Farm Publishing, LLC
Hummock Pond Properties, LLC
Long Pond Media, LLC
Madaket Publishing, LLC
Madaket Road Music, LLC
Miacomet Media LLC
Orange Street Media, LLC
Pocomo Productions, LLC
Relativity REAL, LLC
Relativity TV, LLC
Smith Point Productions, LLC
Straight Wharf Productions, LLC
Tuckernuck Music, LLC
Tuckernuck Publishing, LLC
Zero Point Enterprises, LLC
MUSIC DIVISION
Relativity Music Group, LLC
Relative Motion Music, LLC
Relative Velocity Music, LLC
DIGITAL
Relativity Jackson, LLC
Relativity Rogue, LLC
RML Jackson, LLC
Rogue Digital, LLC
Rogue Games, LLC
Roguelife LLC
BRANDING
Madvine RM LLC
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Alphabetical List of Debtors
21 & Over Productions, LLC
3 Days to Kill Productions, LLC
A Perfect Getaway P.R., LLC
A Perfect Getaway, LLC
Armored Car Productions, LLC
Best of Me Productions, LLC
Black Or White Films, LLC
Blackbird Productions, LLC
Brant Point Productions, LLC
Brick Mansions Acquisitions, LLC
Brilliant Films, LLC
Brothers Productions, LLC
Brothers Servicing, LLC
Catfish Productions, LLC
Cine Productions, LLC
CinePost, LLC
Cisco Beach Media, LLC
Cliff Road Media, LLC
Den of Thieves Films, LLC
Don Jon Acquisitions, LLC
DR Productions, LLC
Einstein Rentals, LLC
English Breakfast Media, LLC
Furnace Films, LLC
Gotti Acquisitions, LLC
Great Point Productions, LLC
Guido Contini Films, LLC
Hooper Farm Music, LLC
Hooper Farm Publishing, LLC
Hummock Pond Properties, LLC
Hunter Killer La Productions, LLC
Hunter Killer Productions, LLC
In The Hat Productions, LLC
J & J Project, LLC
JGAG Acquisitions, LLC
Left Behind Acquisitions, LLC
Long Pond Media, LLC
Madaket Publishing, LLC
Madaket Road Music, LLC
Madvine RM, LLC
Malavita Productions, LLC
MB Productions, LLC
Merchant of Shanghai Productions, LLC
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Miacomet Media LLC
Miracle Shot Productions, LLC
Most Wonderful Time Productions, LLC
Movie Productions, LLC
One Life Acquisitions, LLC
Orange Street Media, LLC
Out Of This World Productions, LLC
Paranoia Acquisitions, LLC
Phantom Acquisitions, LLC
Pocomo Productions, LLC
Relative Motion Music, LLC
Relative Velocity Music, LLC
Relativity Development, LLC
Relativity Fashion, LLC
Relativity Film Finance II, LLC
Relativity Film Finance III, LLC
Relativity Film Finance, LLC
Relativity Films, LLC
Relativity Foreign, LLC
Relativity Holdings LLC
Relativity India Holdings, LLC
Relativity Jackson, LLC
Relativity Media Distribution, LLC
Relativity Media Films, LLC
Relativity Media, LLC
Relativity Music Group, LLC
Relativity Production LLC
Relativity REAL, LLC
Relativity Rogue, LLC
Relativity Senator, LLC
Relativity Sky Land Asia Holdings, LLC
Relativity TV, LLC
Reveler Productions, LLC
RMLDD Financing, LLC
RML Acquisitions I, LLC
RML Acquisitions II, LLC
RML Acquisitions III, LLC
RML Acquisitions IV, LLC
RML Acquisitions IX, LLC
RML Acquisitions V, LLC
RML Acquisitions VI, LLC
RML Acquisitions VII, LLC
RML Acquisitions VIII, LLC
RML Acquisitions X, LLC
RML Acquisitions XI, LLC
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RML Acquisitions XII, LLC
RML Acquisitions XIII, LLC
RML Acquisitions XIV, LLC
RML Acquisitions XV, LLC
RML Bronze Films, LLC
RML Damascus Films, LLC
RML Desert Films, LLC
RML Distribution Domestic, LLC
RML Distribution International, LLC
RML Documentaries, LLC
RML DR Films, LLC
RML Echo Films, LLC
RML Escobar Films LLC
RML Film Development, LLC
RML Films PR, LLC
RML Hector Films, LLC
RML Hillsong Films, LLC
RML IFWT Films, LLC
RML International Assets, LLC
RML Jackson, LLC
RML Kidnap Films, LLC
RML Lazarus Films, LLC
RML Nina Films, LLC
RML November Films, LLC
RML Oculus Films, LLC
RML Our Father Films, LLC
RML Romeo and Juliet Films, LLC
RML Scripture Films, LLC
RML Solace Films, LLC
RML Somnia Films, LLC
RML Timeless Productions, LLC
RML Turkeys Films, LLC
RML Very Good Girls Films, LLC
RML WIB Films, LLC
Rogue Digital, LLC
Rogue Games, LLC
Roguelife LLC
Safe Haven Productions, LLC
Sanctum Films, LLC
Santa Claus Productions, LLC
Smith Point Productions, LLC
Snow White Productions, LLC
Spy Next Door, LLC
Story Development, LLC
Straight Wharf Productions, LLC
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Strangers II, LLC
Stretch Armstrong Productions, LLC
Studio Merchandise, LLC
Summer Forever Productions, LLC
The Crow Productions, LLC
Totally Interns, LLC
Tribes of Palos Verdes Production, LLC
Tuckernuck Music, LLC
Tuckernuck Publishing, LLC
Wright Girls Films, LLC
Yuma, Inc.
Zero Point Enterprises, LLC
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Exhibit B
Organizational Chart
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Main Document
Relativity Holdings LLC
(DE)
Relativity Media,
LLC (âRMLâ)
(CA)
Music Division
Various
Investors
Distribution and Marketing
Division
Digital Division
Various
Investors
[45%]
Relativity Music
Group, LLC
(CA)
Relative
Motion
Music, LLC
(CA)
Relative
Velocity
Music, LLC
(f/k/a RM
Velocity
Music, LLC)
(CA)
[45.9%]
[55%]
RML
Roguelife
Jackson, LLC d/b/a
LLC
Relativity
(CA)
Digital
(DE)
Relativity
Rogue,
LLC
(CA)
Debtor
Acquisitions
Relativity
Jackson,
LLC
(CA)
[10%]
[50%]
Rogue
Games,
LLC (CA)
[90%]
Sky Land
Entertainment
Ltd. (BVI)
[51%] [49%]
Rogue
Movie
Network,
LLC
(CA)
Rogue
Digital,
LLC
(CA)
Distribution and Marketing
[5%]
Various
Investors
Relativity
Sky Land
Asia
Holdings,
LLC (CA)
[50%]
Relativity
EuropaCorp
Distribution, LLC
(DE)
RML DD
Licensing I,
LLC (DE)
Sky Land
(Beijing) FilmTelevision
Culture
Development
Ltd.
[95%]
Realta
Entertainment
Group, Inc.
(DE)
Relativity
India
Holdings,
LLC (DE)
LMB Holdings
Limited
[50%]
Relativity
Senator,
LLC (CA)
RML Distribution
International,
LLC
(CA)
RML
Distribution
Domestic,
LLC (CA)
RMLDD
Financing,
LLC (CA)
Relativity
Foreign,
LLC
(CA)
Virgin
Produced,
LLC
(DE)
RML
International
Assets, LLC
(CA)
RML Films
PR, LLC
(Puerto
Rico)
[50%]
Relativity
B4U Limited
(Mauritius)
TV Division
Relativity
Production
LLC
(DE)
Single Picture Division
Single Picture Division
[52%]
[2.1%]
Sky Land
Management
EuropaCorp
Films USA, Inc
Select
Music
LLC
(NY)
Virgin
Management
USA, Inc.
Relativity
Distribution
LLC
(DE)
Digital Division
Music Division
Subject to Separation Agreement
*
In Process of Dissolution
Story Development,
LLC (CA)
CinePost,
LLC
(CA)
Relativity
Films, LLC
(f/k/a Relativity
Productions,
LLC)
(CA)
Relativity
Development,
LLC
(CA)
Relativity
Media
Films, LLC
(f/k/a Relativity
Directors, LLC
(f/k/a Relativity
DGA, LLC))
(CA)
Relativity
Film
Finance,
LLC
(DE)
Relativity Film
Finance II,
LLC
(CA)
Relativity Film
Finance III,
LLC
(CA)
Relativity
Media
Distribution,
LLC
(CA)
RML Film
Development,
LLC
(CA)
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Main Document
Single Picture SPVs
21& Over
Productions,
LLC
(CA)
Best of Me
Productions,
LLC (CA)
American
Kids, LLC
(CA)
Armored Car
Productions,
LLC
f/ka/ Loomis
Fargo
Productions,
LLC (CA)
3 Days to Kill
Productions,
LLC
(CA)
A Perfect
Getaway,
LLC (CA)
A Perfect
Getaway
P.R.,
LLC (CA)
Brothers
Servicing,
LLC (CA)
Black Or
White Films,
LLC
Brothers
Productions,
LLC (CA)
Blackbird
Productions,
LLC (CA)
Catfish
Productions,
LLC
(CA)
[50%]
Atlas
Entertain
ment
[25%] [25%]
Baker Street
Investors, LLC
(CA)
Cine
Productions,
LLC
(LA)
Den of
Thieves
Films, LLC
(CA)
Dark Fields
Productions,
LLC
(CA)
Five
Continents
Imports, LLC
(f/k/a
Knockout
Films, LLC)
(CA)
Don Jon
Acquisitions,
LLC
(CA)
Dear John,
LLC
(CA)
DR
Productions,
LLC (CA)
Fighter,
LLC
(CA)
[50%]
Furnace
Films,
LLC
(CA)
Hunter Killer
Productions,
LLC
(CA)
RML
Acquisitions
II, LLC
(CA)
RML
Acquisitions
XV, LLC
(CA)
Hunter Killer
La
Productions,
LLC (LA)
1
*
Acquisitions
RML
Acquisitions
I, LLC
(CA)
J&J
Project LA,
Inc (CA
corp)*
Habory
Pictures,
LLC
(CA)
Gotti
Acquisitions,
LLC (f/k/a
RML Jobs,
LLC) (CA)
Brilliant
Films, LLC
(CA)*
RML
Acquisitions
III, LLC
(CA)
RML
Acquisitions
IV, LLC
(CA)
RML
Acquisitions
V, LLC (CA)
RML
Acquisitions
VI, LLC
(CA)
RML
Acquisitions
VII, LLC
(CA)
RML
Acquisitions
VIII, LLC
(CA)
RML
Acquisitions
IX, LLC
(CA)
RML
Acquisitions
X, LLC (CA)
JGAG
Acquisitions,
LLC (CA)
The
Weinstein
Co
[50%]
Current
Entertainm
ent
Brick
Mansions
Acquisitions,
LLC (CA)
In The Hat
Productions,
LLC (CA)
Guido Contini
Films, LLC
(CA)
RML
Acquisitions
XI, LLC
(CA)
RML
Acquisitions
XII, LLC
(CA)
J&J
Project,
LLC
(f/k/a J&J
Profects, LLC
(f/k/a Monkey
King, LLC))
(CA)
Articles Indicate J&J LA, Inc. is parent.
In Process of Dissolution
RML
Acquisitions
XIII, LLC
(CA)
RML
Acquisitions
XIV, LLC
(CA)
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Single Picture SPVs
Left Behind
Acquisitons,
LLC (CA)
Malavita
Productions,
LLC
(CA)
MacGruber,
LLC
(CA)
Merchant of
Shanghai
Productions,
LLC (CA)
MB
Productions,
LLC (CA)
Miracle Shot
Productions,
LLC (CA)
Most
Wonderful
Time
Productions,
LLC (CA)
Movie
Productions,
LLC (CA)
My Soul to
Take, LLC
(CA)
One Life
Acquisitions,
LLC
(CA)
Out Of This
World
Productions,
LLC (CA)
Paranoia
Acquisitions,
LLC
(CA)
Reveler
Productions,
LLC
(CA)
Phantom
Acquisitions,
LLC
(CA)
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Single Picture SPVs
RML Echo
Films, LLC
(CA)
RML Bronze
Films, LLC
(CA)
RML
Escobar
Films LLC
(CA)
RML
Documentaries,
LLC (CA)
RML Hector
Films, LLC
(CA)
RML DR
Films, LLC
(CA)
RML
Damascus
Films, LLC
(CA)
RML Desert
Films, LLC
(CA)
RML
Hillsong
Films, LLC
(CA)
RML IFWT
Films, LLC
(CA)
RML
Kidnap
Films, LLC
(CA)
RML
Lazarus
Films, LLC
(CA)
RML
Somnia
Films,
LLC
(CA)
RML
November
Films, LLC
(CA)
RML
Timeless
Productions,
LLC (CA)
RML Oculus
Films, LLC
(CA)
RML Turkeys
Films, LLC (f/
k/a RML
Turkeys
Acquisitions,
LLC)
(CA)
RML Our
Father Films,
LLC
(CA)
RML Very
Good Girls
Films, LLC
(CA)
RML Romeo
and Juliet
Films, LLC
(CA)
RML Nina
Films, LLC
(CA)
Season of
the Witch,
LLC
(CA)
Season of
the Witch
Productions,
LLC (CA)
Santa Claus
Productions,
LLC (CA)
RML WIB
Films, LLC
(CA)
RML Scripture
Films, LLC
(CA)
RML Solace
Films, LLC
(CA)
Summer
Forever
Productions,
LLC (CA)
Season of
the Witch
Distributions,
LLC
(CA)
Safe Haven
Productions,
LLC (CA)
Spy Next
Door, LLC
(CA)
Strangers II,
LLC
(CA)
Totally Interns,
LLC
(CA)
Stretch
Armstrong
Productions,
LLC (CA)
Snow White
Productions, LLC
(CA)
Sanctum
Films, LLC
(CA)
The Crow
Productions,
LLC (CA)
Studio
Merchandise,
LLC
(CA)
Tribes of
Palos
Verdes
Production,
LLC (CA)
War of the
Gods, LLC
(CA)
War of Gods
Distributions,
LLC
(CA)
Yuma,
Inc. (NM)
Yuma
Films,
Inc. (CA)
War of Gods
Productions,
LLC
(CA)
Warrior
Way, LLC
(CA)
Wright Girls
Films, LLC
(CA)
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RML
TV Division
Relativity REAL, LLC
(CA)
d/b/a Relativity
Television
Relativity TV, LLC
(CA)
Pocomo
Productions,
LLC
(CA)
Smith Point
Productions,
LLC
(CA)
Cisco Beach
Media, LLC
(CA)
Brant Point
Productions,
LLC
(CA)
English
Breakfast
Media, LLC
(CA)
Cliff Road
Media, LLC
(CA)
Great Point
Productions,
LLC
(CA)
Einstein
Rentals,
LLC
(CA)
Hooper
Farm
Publishing,
LLC (CA)
Hooper Farm
Music, LLC
(CA)
Long Pond
Media, LLC
(CA)
Hummock
Pond
Properties,
LLC (CA)
Madaket Road
Music, LLC
(f/k/a Broad
Street Music,
LLC) (CA)
Madaket
Publishing,
LLC
(f/k/a Broad
Street
Publishing,
LLC) (CA)
Orange
Street Media,
LLC (CA)
Miacomet
Media LLC
(CA)
Tuckernuck
Music, LLC
(CA)
Straight Wharf
Productions,
LLC
(CA)
Zero Point
Enterprises,
LLC
(CA)
Tuckernuck
Publishing,
LLC
(CA)
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RML
[36%]
Sports Division
Education
Division
Fashion Division
Branding Division
[18%]
Colbeck
Partners IV,
LLC (DE)
Studio
Education
Services, LLC
(CA)
[36%]
[50%]
RS Football
Equity, LLC
(DE)
Wind Point
Sports, LLC
(IL)
RS Baseball
Equity, LLC
(DE)
[16.72%]
Relativity Sports
Management, LLC (DE)*
Rogue Sports,
LLC
(CA)*****
[70%]
Fashion
Agents
[30%]
Relativity
Education, LLC
(DE)
Relativity Fashion,
LLC
(NY)
[59.71%]
Madvine
RM, LLC
(DE)
[0.57%]
Relativity Sports, LLC
(DE)**
Relativity
Education
Filmmaking, LLC
(CA)
M3 Fashion
Accelerator GP, LLC
(DE)
[10%]
Relativity
Education
Performing Arts,
LLC (CA)
Education
Equities Fund,
LLC (DE)
Relativity
Education
Specialized
Media, LLC (CA)
[18.53%]
Daniel Fegan
[4.46%]
Relativity Sports
Enterprises, LLC
(DE)
Relativity
NEXT, LLC
(DE)
Relativity
School of
Dance, LLC
(CA)
Relativity
Media, LLC
[0.82%]
Various
Investors
Relativity
School of
EDM, LLC
(CA)
Relativity
School of
Sport
Photography,
LLC (CA)
Relativity
School of
Video
Blogging,
LLC (CA)
[99.18%]
Relativity Managers
& Broadcasters,
LLC (DE)
RS Operations,
LLC (DE)
Relativity
Basketball, LLC
(DE)
Relativity
Football, LLC
(DE)
Relativity
Media, LLC
Relativity
Baseball, LLC
(DE)
Relativity
Media, LLC
[24%]
Relativity
Sports, LLC
(DE)**
[6%]
[70%]
Above Average
Productions, Inc.
(DE)
Relativity
Media, LLC
[4.86%***]
Various
Investors
Relativity
Sports, LLC
(DE)**
[20%]
Various
Investors
[11.48%***]
[63.66%]
PureBrands,
LLC (DE)
Major League
Gaming Inc.
(DE)
Colbeck
Beverage
s LLC [40%]
Bev / Early,
LLC (DE)
Relativity
Media, LLC
[9.01%]
LA
Libations
[40%]
LLC
[90.99%]
Shoutz,
Inc. (DE)
*Relativity Media, LLCâs ownership of Relativity Sports Management, LLC is subject to warrants issued to YC Athletic Holdings, LLC, granting the right to purchase 50% of the equity interests in Relativity Sports Management, LLC for a nominal amount.
**The ownership of Relativity Sports, LLC (âRSâ) indicated above is subject to warrants issued to Roosevelt Barnes, Jr., Yucaipa American Affiliate II, LLC and Colbeck Partners IV, LLC, granting the right to purchase 2.10%, 3.30% and 6.60% respectively, of the
equity interest in RS for a nominal amount.
***Ownership interest is evidenced by warrants to purchase amounts as shown
****Such percentage is not on a fully-diluted basis.
*****The ownership of Rogue Sports, LLC indicated above is subject to the terms of the grant agreement in favor of Happy Walters for 15% of the non-voting ownership interests.
Various
Investors
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Schedule 1
Committees
Pursuant to Local Rule 1007-2(a)(3), the Debtors do not believe that any committee has been
formed prior to the Petition Date.
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Schedule 2
Consolidated List of 50 Largest Unsecured Claims (Excluding Insiders)
Pursuant to Local Rule 1007-2(a)(4), the following is a list of creditors holding, as of July 29,
2015, the fifty (50) largest unsecured claims against the Debtors, on a consolidated basis, excluding
claims of insiders as defined in 11 U.S.C. § 101.1
Name of
Creditor
Complete mailing
address, and
employee, agents, or
department familiar
with claim2
Nature of
claims
Indicate if
claim if
contingent,
unliquidated,
disputed, or
subject to set
off
Disputed
Amount of
claim (if
secured, also
state value of
security)
1.
Carat USA
2700 Pennsylvania Ave, 2nd
Floor
Santa Monica, CA 90404
Fax: 310-255-1021
Trade
36,812,731
2.
Palisades Mediagroup
1620 26th Street, #200 S
Santa Monica, CA 90404
Fax: 310-828-7852
Trade
5,172,626
3.
Cinram Group, Inc.
2255 Markham Road
Toronto, Ontario
Canada M1B2W2
Fax: 416-298-0612
Loan
4,197,187
4.
Technicolor Digital
Cinema
3401 N. Centre Lake Dr., Suite
500
Ontario, CA 91761
Fax: 909-974-2005
Trade
3,437,150
5.
Technicolor, Inc.
6040 West Sunset Boulevard
Hollywood, CA 90028
Fax: 909-974-2005
Loan
3,057,047
6.
Cinedigm Digital
Cinema Corp.
902 Broadway, 9th Floor
New York, NY 10010
Fax: 212-598-4898
Trade
1,949,896
1
The information herein shall not constitute an admission of liability by, nor is it binding on, the Debtors. All claims are
subject to customary offsets, rebates, discounts, reconciliations, credits, and adjustments, which are not reflected on this
Schedule.
2
Local Rule 1007-2(a)(4) requires that the Debtors provide the telephone number of the creditors included herein.
However, in the interest of protecting the privacy of the creditors, the telephone numbers have been omitted. They will
be provided to the U.S. Trustee.
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Complete mailing
address, and
employee, agents, or
department familiar
with claim2
Nature of
claims
Main Document
Indicate if
claim if
contingent,
unliquidated,
disputed, or
subject to set
off
Amount of
claim (if
secured, also
state value of
security)
7.
Left Behind
Investments, L.L.C.
o/b/o Ollawood Prod.,
LLC
1 St. Paul Street, Suite 701
St. Catharines, Ontario
Canada L2R 7L4
Fax: 905-684-7946
Trade
1,809,434
8.
American Express
200 Vesey Street
New York, NY 10285-3106
Fax: 212-640-0404
Business
Credit Cards
1,518,450
9.
Say Media, Inc.
180 Townsend St. 1st Floor
San Francisco, CA 94107
Fax: 415-979-1586
Trade
1,487,350
10.
Kasima LLC
One International Blvd, #902
Mahwah, NJ 07495
Fax: 201-252-4215
Trade
1,049,846
11.
Deluxe Advertising
Services, LLC
2400 West Empire Ave., Suite
200
Burbank, CA 91504
Fax: 818-260-2125
Trade
861,750
12.
Allied Integrated
Marketing
55 Cambridge Parkway, Ste.
200
Cambridge, MA 02142
Fax: 617-247-8380
Trade
766,142
13.
Clarius BIGS
9100 Wilshire Blvd., Suite
520E
Beverly Hills, CA 90212
Fax: 310-360-7033
Trade
648,942
14.
Google, Inc.
1600 Amphitheatre Pkwy.
Mountain View, CA 94043
Fax: 650-963-3574
Trade
647,874
15.
Buddha Jones
910 N. Sycamore Ave.
Los Angeles, CA 90038
Fax: 323-850-3321
Trade
607,988
16.
Huddled Masses, LLC
79 Madison Ave., 2nd Floor
New York, NY 10016
Fax: 206-350-1704
Trade
579,398
17.
Identical Production
Company, LLC
6213 Charlotte Pike, Ste. 111
Nashville, TN 37209
Fax: 615-633-4773
Trade
550,000
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address, and
employee, agents, or
department familiar
with claim2
Nature of
claims
Main Document
Indicate if
claim if
contingent,
unliquidated,
disputed, or
subject to set
off
Amount of
claim (if
secured, also
state value of
security)
18.
Story Pictures, LLC
5738 Calpine Dr.
Malibu, CA 90265
Trade
500,000
19.
K&L Gates LLP
925 Fourth Ave., #2900
Seattle, WA 98104
Fax: 206-623-7022
Legal Services
489,249
20.
Workshop Creative
LLC
9006 Melrose Ave.
West Hollywood, CA 90069
Fax: 818-566-8995
Trade
478,805
21.
Major League Gaming
3 Park Ave., Floor 32
New York, NY 10016
Trade
400,000
22.
MarketCast, LLC
1801 W. Olympic Blvd.
Pasadena, CA 91199
Fax: 323-617-9537
Trade
386,000
23.
Technicolor
Entertainment
Services
3401 N. Centre Lake Dr., Suite
500
Ontario, CA 91761
Fax: 909-974-2005
Trade
342,214
24.
Panay Films, Inc.
2029 Century Park East, Ste.
1500
Los Angeles, CA 90067
Fax: 310-785-9035
Trade
331,005
25.
Ease Services, LP
8383 Wilshire Blvd., Suite 100
Beverly Hills, CA 90211
Fax: 310-469-7314
Trade
325,959
26.
Screen Engine, LLC
10635 Santa Monica Blvd.,
Suite #125
Los Angeles, CA 90025
Fax: 310-361-8499
Trade
306,155
27.
Nielsen NRG, Inc.
6255 Sunset Blvd., 19th Floor
Los Angeles, CA 90028
Fax: 201-590-6923
Trade
301,760
28.
Create Advertising
Group
6022 Washington Blvd.
Culver City, CA 90232
Fax: 310-280-2991
Trade
300,091
29.
Bad Beard
Productions
1890 S Cochran Ave., #6
Los Angeles, CA 90019
Trade
299,907
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address, and
employee, agents, or
department familiar
with claim2
Nature of
claims
Main Document
Indicate if
claim if
contingent,
unliquidated,
disputed, or
subject to set
off
Amount of
claim (if
secured, also
state value of
security)
30.
Holthouse Carlin &
Van Trigt LLP
1801 W. Olympic Blvd.,
Pasadena, CA 91199
Fax: 626-243-5101
Accountancy
& Tax
Services
298,517
31.
EuropaCorp Films
USA, Inc.
137 Rue du Faubourg
Saint-Honoré Paris 75008
France
Fax: +33-1-53-83-03-04
Trade
297,233
32.
Christie Digital
Systems USA
10650 Camden Dr.
Cypress, CA 90630
Fax: 714-503-3375
Trade
274,930
33.
Technicolor Creative
Services USA Inc.
3401 N Centre Lake Dr, Suite
500
Ontario, CA 91761
Fax: 909-974-2005
Trade
261,415
34.
Katz Media Group
12022 Collection Center Dr.
Chicago, IL 60693
Fax: 212-424-6489
Trade
251,667
35.
Fishbowl, LLC
751 Fairfax Ave.
Los Angeles, CA 90046
Fax: 310-550-8080
Trade
240,575
36.
IMG Models
304 Park Ave. South, Penthouse
North
New York, NY 10010
Fax: 212-253-0395
Trade
240,000
37.
Atlas Digital LLC
170 S. Flower Street
Burbank, CA 91502
Fax: 323-878-0020
Trade
214,691
38.
Debmar-Mercury,
LLC
225 Santa Monica Blvd., 8th
Floor
Santa Monica, CA 90401
Fax: 310-393-6110
Trade
212,500
39.
mOcean Pictures LLC
2440 S. Sepulveda Blvd., Suite
#150
Los Angeles, CA 90064
Fax: 310-481-0807
Trade
202,663
40.
Alexander Wang, Inc.
386 Broadway
New York, NY 10013
Fax: 212-532-3110
Trade
200,000
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address, and
employee, agents, or
department familiar
with claim2
Nature of
claims
Main Document
Indicate if
claim if
contingent,
unliquidated,
disputed, or
subject to set
off
Amount of
claim (if
secured, also
state value of
security)
41.
National CineMedia,
LLC
9110 East Nichols Avenue,
Suite 200 Centennial, CO
80112
Fax: 303-792-8202
Trade
199,303
42.
Ignition Creative LLC
12959 Coral Tree Place
Los Angeles, CA 90066
Fax: 310-315-6301
Trade
196,914
43.
Sony Electronics Inc.
10202 W. Washington Blvd.
Culver City, CA 90232
Fax: 201-930-6065
Trade
193,595
44.
Eclipse Marketing
Services
490 Headquarters Plaza
North Tower, 10th Floor
Morristown, NJ 07960
Fax: 973-695-0209
Trade
180,646
45.
Daniel Segal
7 Winthrop Street, PO Box 37
Essex, MA 01929-1203
Fax: 978-768-6570
Litigation
Disputed
Unknown
c/o Lowe Law, PC
11400 Olympic Blvd., Ste. 640
Los Angeles, CA 90025
Fax: 310-477â7672
46.
Patrick White
8506 1/2 S San Pedro St.
Los Angeles, CA 90003
Litigation
Disputed
Unknown
47.
Bruce Talamon
3626 Mount Vernon Drive
Los Angeles, CA 90008
Litigation
Disputed
Unknown
48.
Kenneth Heusey
190 Smithfield Street
Pittsburgh, PA 15222
Litigation
Disputed
Unknown
49.
Jeff Most; Jeff Most
Productions, Inc.
c/o Gersh Derby, LLP
15321 Ventura Boulevard, Suite
515
Encino, California 91436
Fax: 818-981-4618
Litigation
Disputed
Unknown
50.
Michael Matthew
Jarman
15234 Lakes of Delray Blvd.
Delray Beach, FL 33484
Litigation
Disputed
Unknown
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Schedule 3
Consolidated List of Holders of 5 Largest Secured Claims
Pursuant to Local Rule 1007-2(a)(5), the following chart lists the creditors holding, as of July
29, 2015, the five largest secured, non-contingent claims against the Debtors, on a consolidated
basis, excluding claims of insiders defined in 11 U.S.C. § 101.
No.
Creditor
Contact, Mailing
Address, Telephone
Number / Fax Number,
Email
Amount of
Claim (as of
7/29/15)
Type of
Collateral
1
Cortland Capital
Markets Services LLC,
as Collateral Agent and
Administrative Agent
Cortland Capital Market
Services LLC
225 W. Washington
Street, Suite 1450
Chicago, Illinois 60606
Attn: Beata Konopko
T: 312-564-5080
F: 312-376-0751
$361,611,038
plus accrued
interest
All the property
and assets and all
interests therein
and proceeds
thereof now
owned or
hereafter acquired
of RML and
certain of its
subsidiaries.
2
Manchester Securities
Corp., as Lender
Manchester Securities
Corp.
40 West 57th Street
New York, NY 10019
Attn: Johannes Weber
T: 212-478-2275
F: 212-478-2276
$137,078,557
plus accrued
interest
All the property
and assets and all
interests therein
and proceeds
thereof now
owned or
hereafter acquired
of RML and
certain of its
subsidiaries.
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Creditor
Contact, Mailing
Address, Telephone
Number / Fax Number,
Email
Amount of
Claim (as of
7/29/15)
Main Document
Type of
Collateral
3
RKA Film Financing,
LLC, as Agent
Cortland Capital Market
Services LLC
225 W. Washington
Street, 21st Floor
Chicago, Illinois 60606
F: 312-376-0751
$83,868,538
plus accrued
interest
Domestic
Distribution
Agreements, IP,
Picture Rights,
Related Picture
Assets, Gross
Receipts, Blocked
Accounts, related
Intercreditor
Agreements and
Proceeds related
to the applicable
P&A Picture.
4
Macquarie US Trading
LLC, as Agent
Macquarie US Trading
LLC
c/o Cortland Capital
Market Services LLC
225 W. Washington
Street, 21st Floor
Chicago, Illinois 60606
Attn: Agency Services â
Macquarie
F: 312-376-0751
$32,424,280
plus accrued
interest
Domestic
Distribution
Agreements, IP,
Picture Rights,
Related Picture
Assets, Gross
Receipts, Blocked
Accounts, related
Intercreditor
Agreements and
Proceeds related
to the applicable
P&A Picture.
5
OneWest Bank, FSB,
as Administrative
Agent
OneWest Bank, FSB
888 E. Walnut Street
Pasadena, CA 911101
Attn: Lauren Puliso &
Tina Dave
T: 866-518-6540
$27,789,945
plus accrued
interest
All personal
property, and
tangible and
intangible
property, of
RMLDD
Financing and the
Ultimates
Guarantors.
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Schedule 4
RELATIVITY HOLDINGS, LLC1
Consolidated Balance Sheet (unaudited)
as of December 31, 2014
(dollars in thousands)
unaudited
Assets
Cash
Restricted cash
Accounts receivable, net
Prepaids and other assets
Property and equipment, net
Film costs, net
Goodwill
Intangible assets, net
Deferred finance costs, net
Total assets
$
92,293
1,114
98,436
11,566
5,629
139,585
34,008
171,278
6,063
559,973
Liabilities and Members' Deficit
Liabilities
Accounts payable and accrued liabilities
Accrued participations and residuals
Advances and deferred revenue
Notes payable
Bank debt
Production loans
Related-party borrowings
Total liabilities
209,601
52,503
54,080
22,114
123,767
49,395
667,350
1,178,810
Membersâ deficit
(618,837)
$
Total liabilities and membersâ deficit
1
559,973
The amounts provided herein are presented on a consolidated basis for all Relativity entities reflected on Exhibit B
hereto and not just the Debtors who have filed Chapter 11 Petitions. Unless otherwise indicated, the financial
information contained in this Declaration is unaudited and subject to change.
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Schedule 5
The Debtorsâ Securities
Pursuant to Local Rule 1007-2(a)(7), the Debtors submit that they have not issued securities
that are registered with the Securities and Exchange Commission. The securities listed in the chart
below were issued by the Debtor pursuant to an exemption from registration under the Securities Act
of 1933, as amended.
Class, Units and Percentages of the Members
(as of July 7, 2015)
Total Units Issued
and Outstanding
Number of Units
Ownership
Percentage(1)
Voting Percentage
Class A(2)
120,750,089
66.3134%
83.7720%
Class B(3)
59,979,890
32.9397%
0.0000%
Class C(4)
3.4704
0.0000%
0.0000%
Class D
1,360,000
0.7469%
0.0000%
Class E(2)(4)
11,695,648
0.0000%
16.2280%(5)
1
Reflects current ownership percentage. Calculations of ownership on a fully diluted as-converted basis on file with
Relativity.
2
Indicates voting class.
3
There are 17,253,638 Class B Units that are currently vested at $12.50 per Unit.
4
Indicates Preferred Equity class.
5
Voting Percentage calculated at two times number of outstanding Class E Units.
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SHARES HELD BY DEBTORSâ OFFICERS AND DIRECTORS6
Name
Units and Class
Ownership
Percentage
Voting
Percentage
Ryan Kavanaugh
22,684,800
Class A
12.4580%
15.7379%
Carey Metz
2,897,744
Class A
1.5914%
2.0103%
15,543,800*
Class B
8.5363%
0%
Tucker Tooley
3,260,900
Class B
1.7908%
0%
Angela Courtin
160,000*
Class B
0.0879%
0%
1,360,000*
Class B
0.7469%
0%
75,000*
Class B
0.0412%
0%
4,179,760*
Class B
2.2955%
0%
Mark Canton
29,630
Class B
0.0163%
0%
Tom Forman
1,360,000
Class D
0.7469%
0%
Ryan Kavanaugh
Tom Forman
Lisa Eisenpresser
RHL Management LLC**
** Includes Class B Units for Carol Genis, Robbie Brenner, William Kyle Davies, Danny Stepper,
Greg Shamo and Ramon Wilson
6
Local Rule 1007-2(a)(7) requires that the Debtors list separately those class of shares of stock, debentures, or other
securities held by each of the Debtorâs officers and directors and the amounts so held. This list includes only those
shares of stock held directly by the Debtorsâ officers and directors. A full list of the Debtorsâ equity holders can be
found in the List of Equity Security Holders, filed contemporaneously herewith.
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Schedule 6
Debtorsâ Property Not in the Debtorsâ Possession
Local Rule 1007-2(a)(8) requires the Debtors to list property that is in the possession or
custody of any custodian, public officer, mortgagee, pledge, assignee of rents, secured creditor, or
agent for any such entity.
In the ordinary course of business, on any given day, property of the Debtors (including film
masters, masters for DVDs, production sets and production equipment, security deposits or other
collateral with counterparties to certain commercial relationships) is likely to be in the possession of
various third parties, including, shippers, common carriers, materialmen, logistics vendors, tooling
vendors, distributors, processors, expeditors, warehousemen, other related service providers, or
agents, where the Debtorsâ ownership is not affected. Because of the constant movement of this
property, providing a comprehensive list of the property that is in the possession or custody of such
persons and a list of the persons or entities in possession of such property, their addresses and
telephone numbers, and the location of any court proceeding affecting the property would be
impractical.
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Schedule 7
Pursuant to Local Rule 1007-2(a)(9), the following lists the property of premises owned,
leased or held under other arrangement from which the Debtors operate their business.1
1.
315 Park Avenue South, New York, NY 10010 pursuant to Agreement of Lease, dated of
March 20, 2014 (as amended, supplemented or otherwise modified, renewed, restated or
replaced from time to time), between 315 Holdings, LLC and Relativity Media, LLC.
2.
9242 Beverly Blvd., Beverly Hills, CA 90210 pursuant to Lease, dated as of April 25, 2011
(as amended, supplemented or otherwise modified, renewed, restated or replaced from time
to time), between Beverly Place, L.P. and Relativity Media, LLC.
3.
335-345 North Maple Drive, Beverly Hills, CA 90210 pursuant to Lease, dated as of May 1,
2012 (as amended, supplemented or otherwise modified, renewed, restated or replaced from
time to time), all licenses related thereto, between Maple Plaza, L.P. and Relativity Media,
LLC.
4.
Airplane hangar located at 3000 31st Street, North Hangar, North Bay, Santa Monica, CA
90405 pursuant to Gunnell Hangar Agreement, dated as of January 26, 2011 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Gunnell Properties and CinePost, LLC.
5.
Hollywood Center Studios, 1040 North Las Palmas Avenue, Los Angeles, CA 90038
pursuant to Office License Agreement, dated as of March 30, 2009 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Relativity REAL, LLC and Hollywood Center Studios.
6.
Hollywood Center Studios, 1040 North Las Palmas Avenue, Los Angeles, CA 90038
pursuant to Office License Agreement, dated as of January 29, 2015 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Relativity REAL, LLC and Hollywood Center Studios.
7.
Hollywood Center Studios, 1040 North Las Palmas Avenue, Los Angeles, CA 90038
pursuant to Office License Agreement, dated as of April 12, 2010 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Relativity REAL, LLC and Hollywood Center Studios.
8.
Hollywood Center Studios, 1040 North Las Palmas Avenue, Los Angeles, CA 90038
pursuant to Office License Agreement, dated as of November 5, 2010 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Relativity REAL, LLC and Hollywood Center Studios.
1
The classification of the contractual agreements listed herein as real leases or property held by other arrangements is
not binding upon the Debtors.
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9.
Hollywood Center Studios, 1040 North Las Palmas Avenue, Los Angeles, CA 90038
pursuant to Office License Agreement, dated as of March 22, 2010 (as amended,
supplemented or otherwise modified, renewed, restated or replaced from time to time),
between Long Pond Media, LLC and Hollywood Center Studios.
10.
1135 North Mansfield Avenue, Los Angeles, CA 90038 pursuant to Lease, dated as of
August 1, 2011 (as amended, supplemented or otherwise modified, renewed, restated or
replaced from time to time), between J&R Film Co., Inc. dba Moviola and Relativity REAL,
LLC.
11.
Certain small parcels of real property used for short-term production sites in Greater Atlanta,
Georgia.
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Schedule 8
Locations of Debtorsâ Assets, Books, and Records
Pursuant to Local Rule 1007-2(a)(10), the following lists the locations of the Debtorsâ
substantial assets, the location of their books and records, and the nature, location, and value of any
assets held by the Debtors outside the territorial limits if the United States.
Location of Debtorsâ Substantial Assets
The Debtors have assets of more than $560,000,000 (unaudited consolidated basis and
subject to change), with substantial assets in California, New York and Delaware.
Books and Records
The Debtorsâ books and records are located in Beverly Hills, California.
Debtorsâ Assets Outside the United States
The Debtors, in addition to their non-Debtor affiliates, have significant assets worldwide,
including significant assets held outside of the United States through direct and indirect subsidiaries
of the Debtors, including:
ï·
Sky Land (Beijing) Film-Television Culture Development Ltd. Joint Venture
Interest: Unknown value
ï·
Relativity B4U Limited Joint Venture Interest: Unknown value
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Schedule 9
Litigation
Pursuant to Local Rule 1007-2(a)(11), to the best of the Debtorsâ knowledge and belief, the following is a list of the nature and
present status of each action or proceeding, pending or threatened, against the Debtors or their properties where a judgment against the
Debtors or a seizure of their property may be imminent.
Litigations
Plaintiff(s)
1.
2.
Defendant(s)
Daniel Segal, Rogue Pictures, a division of
an individual Relativity Media LLC;
Universal Pictures Company
LLC, a subsidiary of NBC
Universal Inc.; Phantom Four
Films; David S. Goyer;
Michael Bay; Andrew Form;
Brad Fuller; Jessika
Borsiczky Goyer; William
Beasley; and DOES 1-50,
inclusively.
Daniel Segal, Rogue Pictures, a division of
an individual Relativity Media, LLC; and
DOES 1-50
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Jurisdiction
Nature of
Proceeding
Status
District
Court for the
Central
District of
California
Copyright
infringement and
breach of implied in
fact contract
relating to The
Unborn
Claim against Rogue Pictures dismissed with
prejudice on 8/19/2011; Second amended
complaint dismissed 1/24/2012.
Appellate court affirmed. Appeals exhausted
and writ of certiorari denied on October 6, 2014.
Superior
Court of the
State of
California
Breach of implied
contract relating to
The Unborn
Complaint filed January 9, 2012.
Stayed pending federal court case.
No activity since March 2015.
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Jurisdiction
Nature of
Proceeding
Main Document
Status
3.
Patrick
White
Sony Pictures; Columbia
Pictures; Media Rights
Capital; Relativity Media;
NBC Universal Media; and
Universal Pictures
District
Court for the
Central
District of
California
Copyright
Infringement claim
relating to Salt,
Charlie St. Cloud,
Battle: Los Angeles
and Safe House
Complaint filed January 7, 2013.
4.
Bruce
Talamon
Stacey Mooradian, EVP of
Publicity, Relativity Media
Equal
Opportunity
Commission,
Los Angeles
District
Office
Complaint filed February 7, 2014.
5.
Kenneth
Heusey
Sony Pictures Entertainment,
Inc.; Relativity Media, LLC
6.
Jeff Most
and Jeff
Most
Productions,
Inc.
Michael
Matthew
Jarman
Relativity Media, LLC;
Edward R. Pressman Film
Corporation; and Sammyjack
Productions
District
Court for the
Central
District of
California
Los Angeles
Superior
Court
Allegation that
decision to deny
plaintiff a still
photographer
position for Beyond
the Lights was
racially
discriminatory
Copyright claim
relating to
Anonymous
Breach of contract
and other claims
relating to The
Crow
Complaint filed on July 17, 2013.
Intellectual
property fraud,
unethical business
practices and
Complaint filed on April 14, 2015.
7.
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California
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Defendantsâ motion to dismiss is pending.
Tolling agreement entered into in April 2014
that dismissed the litigation without prejudice.
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Nature of
Proceeding
Main Document
Status
intentional
infliction of
emotional and
physical distress
relating to VII
Peaks transaction.
Guild Arbitrations
Plaintiff(s)
Defendant(s)
Jurisdiction
1.
Writers
Guild of
America,
West, Inc.
Relativity Media, LLC; J&J
Project, LLC; J&J
Productions, Ltd.; Lions Gate
Films, Inc.
Arbitration
Tribunal
2.
WGA
Relativity Films, LLC;
Relativity Development,
LLC; Spy Next Door, LLC;
Relativity Media, LLC; Lions
Gate Films, Inc.; Ryan
Kavanaugh
Arbitration
Tribunal
3.
WGA
Brothers Productions, LLC;
Relativity Media, LLC; Metro
Goldwyn Mayer Distribution
Co.; Lions Gate Films, Inc.
Arbitration
Tribunal
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Nature of
Proceeding
Status
Unpaid residual
Claim settled on March 20, 2015.
compensation in
connection with
The Forbidden
Kingdom
Unpaid residuals by Claim received June 26, 2012.
Lionsgate in
connection with
Spy Next Door
Unpaid residuals by Claim received December 5, 2012.
Lionsgate in
connection with
Brothers
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Nature of
Proceeding
Main Document
Status
4.
WGA
Baker Street Investors, LLC
Arbitration
Tribunal
Unpaid residuals by Claim received June 1, 2012.
Baker Street
Investors, LLC in
connection with
Bank Job
5.
WGA
Furnace Films, LLC;
Relativity Films, LLC;
Relativity Development,
LLC; Relativity Media, LLC;
Ryan Kavanaugh
Arbitration
Tribunal
Residuals reserves
and related
financial
assurances.
Claim settled on March 14, 2013.
6.
Directorâs
Guild of
America
Blackbird Productions, LLC
California
Grievance
regarding hiring
prohibited
production staff
prior to hiring a
UPM
Claim settled on March 4, 2015
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Threatened Claims
Plaintiff(s)
Defendant(s)
Nature of Proceeding
Status
1.
Brett Ratner
Relativity Rogue, LLC
Alleged fees related to the series
Catfish
Received notice of potential claim from
insurance company on June 3, 2013.
2.
Bland-Ricky
Roberts
Relativity Media, LLC;
Relativity Music Group; and
Paul Leonard-Morgan
Alleged unauthorized sampling in
Limitless song âHiring
Bodyguardsâ
Settled on October 15, 2013.
4.
Proctor &
Gamble
Relativity Media, LLC
Alleged copyright infringement for
unauthorized use of âTampaxâ in
Movie 43
Not reported to carrier yet (notice only)
5.
PeopleAreTh
ings (Band)
Relativity Media, LLC
Alleged Copyright Infringement in
Catfish song âHitmanâ
Waiting status update from carrier
6.
Mr. Charlie
Relativity Media, LLC
aka John Doe
Alleged Copyright Infringement in
21 & Over song âLets Touchâ
Demand letter dated March 20, 2013
7.
Joseph L.
Relativity REAL
Alleged unauthorized Use of Image
on Police Women 7
Letter received July 18, 2013
8.
Kimberly
Tucker
unclear based on email
Alleged copyright infringement
with respect to Black or White
Email received on January 30, 2015
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Plaintiff(s)
9.
Howard
Rosenberg
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Defendant(s)
Relativity Media, LLC
Main Document
Nature of Proceeding
Status
Alleged copyright infringement for
alleged unauthorized use of images
of NWA on ArtistDirect website
Received cease and desist letter from Edward C.
Greenberg, LLC on February 2, 2015
Received email from Edward C. Greenberg on
February 11, 2015 threatening litigation.
10.
LaTunya
Carr
Relativity Media, LLC
Alleged copyright infringement
with respect to The Lazarus Effect
Email received from Carr on February 19, 2015
11.
Chris
Fillmore
Relativity Media, LLC
Alleged copyright infringement
with respect to The Lazarus Effect
Email received from Fillmore on March 16,
2015
12. DGA
Armored Car Productions,
LLC
Alleged failure to pay interest due
on late employer contributions
Invoice #: 2652747-49
Notice received February 18, 2015
13.
DGA
Relativity Media, LLC
Alleged failure to provide a new
UPM deal memo on The
Disappointments Room
Notice received August 22, 2014
DGA threatened to file formal grievance on
March 25, 2015; potential settlement
14.
Kristian
House
Relativity Real, LLC d/b/a
Relativity Television
Alleged royalty and credit due on
American Jungle
Dispute is currently between House and This is
Just A Test Productions, Inc. (where she was a
partner).
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Plaintiff(s)
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Defendant(s)
Nature of Proceeding
Main Document
Status
15.
Butter &
Toast
Long Pond Media, LLC
Alleged payment issue related to
American Jungle
No response to our reply regarding their
payment request.
16.
Jerez
Coleman
Long Pond Media, LLC
Alleged defamation related to
Catfish The TV Show: Jerez
Coleman (Episode #304)
Threatened action for defamation starting in
April 2014 and most recently on February 19,
2015.
17.
Carl
Ciarfalio
Relativity Media, LLC; Cast
& Crew Payroll, Inc.
Alleged workerâs compensation
claim
Letter received from Gordon Edelstein Krepack
Grant Felton and Goldstein LLP on March 30,
2015
18.
Jody
Williams, a
viewer of â8
Minutesâ
Nancy Dubuc (A&E
Network); Tom Forman
(Relativity Media);
DominaElle; and other so
called âsex workersâ
Alleged defamation with respect to
8 Minutes
Email and letter received from Williams on May
7, 2015
19. WGA,
Matthew
Sand
Relativity Development, LLC
Alleged unpaid writing services
compensation and applicable health
and pension contributions
Demand for payment received on June 12, 2015.
WGA has threatened to proceed to arbitration if
payment is not received by June 17, 2015.
20. Don
Campbell
Relativity Media, LLC;
Relativity REAL, LLC
Alleged copyright infringement
with respect to American Bible
Challenge
Letter received from Campbell on June 7, 2015.
21.
Relativity Media
Alleged unpaid advertisements
Letter received on July 29, 2015
Viacom
International
Inc.
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Schedule 10
Senior Management
Pursuant to Local Rule 1007-2(a)(12), the following provides the name of the individuals
who comprise the Debtorsâ existing senior management, a description of their tenure with the
Debtors, and a brief summary of their relevant responsibilities and experience.
Name and Position
Responsibilities and Experience
Ryan Kavanaugh
Ryan Kavanaugh is the founder and Chief Executive Officer of
Relativity.
Chief Executive Officer
Tucker Tooley
President
Happy Walters
Co-President
Chief Executive Officer,
Relativity Sports
Andrew Matthews
Chief Financial Officer & CoChief Operating Officer
Greg Shamo
Co-Chief Operating Officer
Carol Genis
Managing Director
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Tucker Tooley is the President, overseeing the companyâs dayto-day operations, business divisions, and personnel. In
addition, Mr. Tooley oversees Relativityâs film slate, and is
responsible for marketing, theatrical distribution and the
international business operations of Relativityâs network of
foreign output partners. Mr. Tooley joined RML in 2007.
Happy Walters is the Co-President, serving alongside Tucker
Tooley overseeing the companyâs day-to-day operations,
business divisions, and personnel. Mr. Walters also serves as
the Chief Executive Officer of Relativity Sports. Mr. Walters
joined RML in 2009.
Andrew Matthews is the Chief Financial Officer and Co-Chief
Operating Officer, supervising the overall financial strategy and
planning for Relativity. Mr. Matthews joined RML in 2013.
Greg Shamo is the Co-Chief Operating Officer, overseeing the
companyâs corporate, business and legal affairs, technology,
human resources and operations departments, working
alongside Co-Chief Operating Officer Andrew Matthews to
manage the companyâs day-to-day activities. Mr. Shamo joined
RML in 2009.
Carol Genis is the Managing Director. She was former outside
litigation, and Intellectual Property counsel for RML and joined
RML in the fall of 2014 to manage legal, including business
affairs and litigation matters for all divisions, management and
supervision of outside counsel, management of personnel,
operations and to work on strategic planning as well as special
situations.
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Name and Position
Responsibilities and Experience
Brian G. Kushner
Brian G. Kushner is a senior managing director of FTI
Consulting, Inc.
Chief Restructuring Officer
Luke Schaeffer
Luke Schaeffer is a senior managing director of FTI Consulting,
Inc.
Deputy Chief Restructuring
Officer
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Schedule 11
Payroll
Pursuant to Local Rule 1007-2(b)(1)-(2)(A) and (C), the following provides the estimated
amount of weekly payroll to the Debtorsâ employees (not including officers, directors, and
stockholders) and the estimated amount to be paid to officers, stockholders, directors, and financial
and business consultants retained by the Debtors for the 30-day period following the filing of the
chapter 11 petitions.
Payments to Employees (Not Including
Officers, Directors, and Stockholders)
$1,750,0001
Payments to Officers, Stockholders, and
Directors
$450,0002
Payments to Financial and Business
Consultants
$03
1
In the ordinary course of their business, the Debtors hire independent contracts and utilize Temporary Production
Personnel in connection with the production of their films and TV programs. This amount does not include the estimated
amount to be paid to the Debtorsâ independent contractors or Temporary Production Personnel.
2
The Debtors do not anticipate making any payments to stockholders or directors in the 30-day period following the
filing of the Chapter 11 Petitions, except for the payment of ordinary course compensation to the Debtorsâ officers.
3
This does not include any payments to the Debtorsâ attorneys or auditors. Pursuant to the retention applications filed
for these professionals, the Debtors will not make any payments in the 30-day period following the filing of the Chapter
11 Petitions. In addition, this does not include the estimated amount to be paid to the Debtorsâ independent contracts.
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Schedule 12
Cash Receipts and Disbursements,
Net Cash Gain or Loss, Unpaid Obligations and Receivables
Pursuant to Local Rule 1007-2(b)(3), the following provides, for the 30-day period following
the filing of the chapter 11 petition, the estimated cash receipts and disbursements, net cash gain or
loss, and obligations and receivable expected to accrue that remain unpaid, other than professional
fees.
Cash Receipts
$16,900,000
Cash Disbursements
$21,000,000
($14,000,000)
New Cash Loss
Unpaid Obligations
$12,000,000
Uncollected Receivables
$5,000,000
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