Relativity CEO Says He Won’t Go Quietly

Ryan Kavanaugh, the chief executive of Beverly Hills-based Relativity Media LLC, isn’t holding back in defending his company’s business model and, by association, his reputation.

“I will stand by our business model 100 percent,” he said in a recent interview with The Hollywood Reporter. “This company should not be in bankruptcy.”

The controversial financier, who has led Relativity from its founding in 2004 through its collapse into bankruptcy last month, outlined what he says was a scheme to take over the business.

In the interview, Mr. Kavanaugh said Colbeck Capital, which holds a place on Relativity’s board of directors, tried to sabotage a recent bid to raise $200 million, and, in effect, steal the company.

“The Relativity Board and Ryan Kavanaugh fully authorized Colbeck to run this parallel process,” a representative for Colbeck said in response to the allegations that it was working behind Mr. Kavanaugh’s back.

Asked whether or not he would sue over the dispute, Mr. Kavanaugh wouldn’t say.  But he said he has a good case.

“I can tell you that people with knowledge of the situation say I have, quote, ‘the mother of all lawsuits,’” he said in the interview.

Mr. Kavanaugh said he’s still in control of Relativity, though he conceded that a ground of lenders may try to replace him if they are successful in buying the business at an upcoming bankruptcy court-supervised auction.

The lender group includes investment firms Anchorage Capital, Luxor Capital Group and Falcon Investment Advisors.

Mr. Kavanaugh isn’t part of that group, but he’s attempting to put together his own bid for Relativity, The Wall Street Journal has reported, citing a person close to him.

“I definitely won’t go quietly into the night,” Mr. Kavanaugh told The Hollywood Reporter.

Mr. Kavanaugh founded Relativity 11 years ago after a career arranging financing for Hollywood studios and has specialized in midrange budget features. He also aggressively expanded beyond film, opening divisions that included a for-profit university, sports representation and a marketing consultancy, with some success.

But, the company and its  subsidiaries filed for chapter 11 protection July 30, succumbing to a heavy debt load and a string of box-office flops.

Relativity’s  more well-known releases, such as “Immortals” and the Nicholas Sparks drama “Safe Haven,” have been outnumbered by box-office misfires. The last movie distributed by the studio to gross more than $50 million at the domestic box office was “Free Birds” in November 2013. Recent releases include the flops “3 Days to Kill” and “Black or White.”

-Patrick Fitzgerald contributed to this post.

Write to Tom Corrigan at [email protected]