Bankruptcy reorganization is another possible path for Relativity, although the lenders are said to have hopes for bringing in new investors in order to be made whole that much faster.
Sources emphasized that any outside investment would come from a group of funds, not TPG on its own, and that any investment would come only if Kavanaugh is no longer CEO.
Tony Vinciquerra, a former top Fox TV executive who is a senior adviser to TPG, has been doing due diligence on the Relativity assets. That has sparked speculation that Vinciquerra might be tapped to run the company post-Kavanaugh if TPG were to take a stake. But sources close to the situation downplay that scenario.
Kavanaugh faces a number of issues as he scrambles to find fresh capital. Insiders say that Relativity’s film library is fully pledged out and has already been used as collateral in previous refinancing agreements. The company’s film division has not been successful, and has suffered a series of disappointments such as “The Best of Me” and “Out of the Furnace,” and is said to be overextended in its financial commitments. But the larger entity has some attractive businesses, including the Relativity Television banner, its sports representation arm and music division.
TPG has become an active Hollywood investor in the past few years. It owns a majority stake in CAA and has funded the startup STX Entertainment film and TV studio.
Article Appeared @http://variety.com/2015/biz/news/relativity-media-debt-crisis-colbeck-tpg-1201523030/