Post by The Ultimate Nullifier on Jul 16, 2015 19:32:59 GMT -6
www.hollywoodreporter.com/news/relativitys-ryan-kavanaugh-accuses-colbeck-809270
Relativity's Ryan Kavanaugh Accuses Colbeck Capital of "Buyout Scheme"
Saying he is the victim of a "malicious witch hunt," Relativity's embattled CEO says Catalyst Capital, which had taken over senior debt, has been bought out by subordinated debt-holders.
Claiming he is the victim of a “malicious witch hunt," Relativity Media chairman and CEO Ryan Kavanaugh issued a lengthy public statement on Thursday, laying out his efforts to solve his company’s current financial crisis and accusing Colbeck Capital and Tony Vinciquerra of taking part in a “buyout scheme” to purchase Relativity.
According to Kavanaugh, Relativity reached an agreement with the Toronto-based Catalyst Capital to purchase all of Relativity’s senior debt for $130 million and to provide an additional $170 million in working capital. However, after Catalyst wired the $130 million to Relativity, Kavanaugh said, the subordinated debt-holders, lead by Anchorage Capital, exercised an option to buy out Catalyst’s stake.
However, Newton Glassman, managing partner at Catalyst, told Bloomberg Business that the private equity group still owns some of Relativity's senior and junior debt, remains supportive of Relativity, and is participating in efforts to restructure the company.
Said Kavanaugh of the studio's current prospects, “The lenders have been working closely with Relativity to provide the company with further capital to keep the company stable and growing."
At the same time, he charged, “a group led by Colbeck Capital and Tony Vinciquerra” have been spreading “false rumors” in an attempt to put together a buy-out scheme. He alleged that “Tony has continued to meet with as many funds as possible to raise capital while spreading false, defamatory rumors in hopes of usurping new Relativity investors.” He also charged that Vinciquerra, who is on the board of STX Entertainment, has a conflict of interest. Colbeck had no comment on the matter, while Vinciquerra could not be immediately reached for comment.
Kavanaugh also dismissed a suit filed by RKA Film Financing, claiming it is owed $7.5 million it loaned to Relativity for the P&A costs of releasing several films. “Neither our lenders, nor Relativity are in any way concerned with RKA’s recent attempt to extract $10 million dollars of my personal capital under the guise of litigation, and we will not be surprised by their continued efforts to file baseless litigation. This will not dissuade the company or our lenders.”
Kavanaugh’s full statement follows:
“We’ve remained silent during the past few weeks as false, speculative, stories have run about Relativity. At this point, we’re clarifying the situation to protect the company from this malicious witch-hunt.
Relativity has been working closely with our lenders, which include our long-term lender Anchorage Capital. Our lenders have been very cooperative and have been working closely with us to ensure that Relativity continues to move forward, grow and execute our business plan. Catalyst Capital fully funded a purchase of Relativity’s entire senior debt and over $130 million was wired to the company. In addition, Catalyst committed to providing an incremental $170 million of working capital. Relativity’s current lenders, including Anchorage, decided that it was in the company’s best interest for them and others to own all of the senior debt versus having one group own such a large stake. Therefore, they exercised their contractual right to buy out Catalyst. The lenders have been working closely with Relativity to provide the company with further capital to keep the company stable and growing.
We have been aware that false rumors are coming from a group led by Colbeck Capital and Tony Vinciquerra who are working to execute a buyout scheme. Tony came to Relativity for one meeting under the guise of being a consultant to a well-known hedge fund before we learned that his scheme was to raise money to purchase Relativity. Tony has continued to meet with as many funds as possible to raise capital while spreading false, defamatory rumors in hopes of usurping new Relativity investors. Tony’s seat on the board of STX Entertainment is also a conflict of interest.
There is no concern by our lenders about the company’s P&A spending, and in fact, our lenders are providing Relativity with further working capital to ensure growth. Neither our lenders, nor Relativity are in any way concerned with RKA’s recent attempt to extract $10 million dollars of my personal capital under the guise of litigation, and we will not be surprised by their continued efforts to file baseless litigation. This will not dissuade the company or our lenders.
We thank our lenders for their continued, unwavering support.”
Relativity's Ryan Kavanaugh Accuses Colbeck Capital of "Buyout Scheme"
Saying he is the victim of a "malicious witch hunt," Relativity's embattled CEO says Catalyst Capital, which had taken over senior debt, has been bought out by subordinated debt-holders.
Claiming he is the victim of a “malicious witch hunt," Relativity Media chairman and CEO Ryan Kavanaugh issued a lengthy public statement on Thursday, laying out his efforts to solve his company’s current financial crisis and accusing Colbeck Capital and Tony Vinciquerra of taking part in a “buyout scheme” to purchase Relativity.
According to Kavanaugh, Relativity reached an agreement with the Toronto-based Catalyst Capital to purchase all of Relativity’s senior debt for $130 million and to provide an additional $170 million in working capital. However, after Catalyst wired the $130 million to Relativity, Kavanaugh said, the subordinated debt-holders, lead by Anchorage Capital, exercised an option to buy out Catalyst’s stake.
However, Newton Glassman, managing partner at Catalyst, told Bloomberg Business that the private equity group still owns some of Relativity's senior and junior debt, remains supportive of Relativity, and is participating in efforts to restructure the company.
Said Kavanaugh of the studio's current prospects, “The lenders have been working closely with Relativity to provide the company with further capital to keep the company stable and growing."
At the same time, he charged, “a group led by Colbeck Capital and Tony Vinciquerra” have been spreading “false rumors” in an attempt to put together a buy-out scheme. He alleged that “Tony has continued to meet with as many funds as possible to raise capital while spreading false, defamatory rumors in hopes of usurping new Relativity investors.” He also charged that Vinciquerra, who is on the board of STX Entertainment, has a conflict of interest. Colbeck had no comment on the matter, while Vinciquerra could not be immediately reached for comment.
Kavanaugh also dismissed a suit filed by RKA Film Financing, claiming it is owed $7.5 million it loaned to Relativity for the P&A costs of releasing several films. “Neither our lenders, nor Relativity are in any way concerned with RKA’s recent attempt to extract $10 million dollars of my personal capital under the guise of litigation, and we will not be surprised by their continued efforts to file baseless litigation. This will not dissuade the company or our lenders.”
Kavanaugh’s full statement follows:
“We’ve remained silent during the past few weeks as false, speculative, stories have run about Relativity. At this point, we’re clarifying the situation to protect the company from this malicious witch-hunt.
Relativity has been working closely with our lenders, which include our long-term lender Anchorage Capital. Our lenders have been very cooperative and have been working closely with us to ensure that Relativity continues to move forward, grow and execute our business plan. Catalyst Capital fully funded a purchase of Relativity’s entire senior debt and over $130 million was wired to the company. In addition, Catalyst committed to providing an incremental $170 million of working capital. Relativity’s current lenders, including Anchorage, decided that it was in the company’s best interest for them and others to own all of the senior debt versus having one group own such a large stake. Therefore, they exercised their contractual right to buy out Catalyst. The lenders have been working closely with Relativity to provide the company with further capital to keep the company stable and growing.
We have been aware that false rumors are coming from a group led by Colbeck Capital and Tony Vinciquerra who are working to execute a buyout scheme. Tony came to Relativity for one meeting under the guise of being a consultant to a well-known hedge fund before we learned that his scheme was to raise money to purchase Relativity. Tony has continued to meet with as many funds as possible to raise capital while spreading false, defamatory rumors in hopes of usurping new Relativity investors. Tony’s seat on the board of STX Entertainment is also a conflict of interest.
There is no concern by our lenders about the company’s P&A spending, and in fact, our lenders are providing Relativity with further working capital to ensure growth. Neither our lenders, nor Relativity are in any way concerned with RKA’s recent attempt to extract $10 million dollars of my personal capital under the guise of litigation, and we will not be surprised by their continued efforts to file baseless litigation. This will not dissuade the company or our lenders.
We thank our lenders for their continued, unwavering support.”