Relativity Media filed for Chapter 11 bankruptcy on Thursday following weeks of financial trouble. CEO and Chairman Ryan Kavanaugh was forced to lay off more than 50 employees as the studio tried to make up the $320 million debt it accumulated, The Los Angeles Times reported.
Chapter 11 requires the company to gain approval of a bankruptcy judge for most major financial decisions, according to TheWrap. Relativity's largest secured lender, Anchorage, had a much bigger say in its operations.
The company has been the subject of wide speculation in Hollywood for weeks, having to push back the release dates of some of its biggest movies, including "Masterminds" starring Zach Galifianakis and Kristin Wiig, as it dealt with financial problems.
"Relativity continues to pursue its mission as a next-generation global media company, and we remain firmly committed to our film and television businesses. The actions we are announcing today will protect our valuable franchise and allow us to emerge as a stronger, more focused company," Kavanaugh said in a statement. "Our board and management team explored a variety of options to refinance Relativity's debt, and we ultimately determined that the protection afforded by a court-supervised reorganization process will provide additional time and structure to achieve our financial and strategic objectives."
Relativity Media was founded in 2004, according to The New York Times. Its dealings with Universal Pictures yielded high-profile films like "The Fast and the Furious: Tokyo Drift" and "Evan Almighty," while an alliance with Sony Pictures brought "Talladega Nights: The Ballad of Ricky Bobby," "Ghost Rider" and "Hancock," among others.
