BEVERLY HILLS, Calif., Jan. 22, 2016 /PRNewswire/ -- Relativity Media has learned that RKA Film Financing intends to once again rehash the false and outrageous claims it has been making against Relativity Media for the last year. A basic review of the facts in this matter make it abundantly clear that RKA's allegations are baseless and totally without merit:
Relativity Holdings, the parent company of Relativity Media, entered into a working capital facility with a group called RKA in 2014. This facility was structured in precisely the same way as Relativity's previous two working capital facilities.
RKA Film Financing negotiated the agreement in question solely with Colbeck Capital Management, which at the time was a board member, paid advisor and agent to the debt of Relativity. In fact Ryan Kavanaugh never met, spoke with or had any other form of contact with RKA until after the facility was closed. As Colbeck was closing the transaction with RKA, Colbeck informed Mr. Kavanaugh that RKA required that Mr. Kavanaugh put $9 million of his own money at the most junior and riskiest level of the capital structure. He later invested another $1 million of his own money, bringing his total personal investment in the facility to $10 million.
RKA has used and is continuing to misuse the restructuring process to attempt to extract Mr. Kavanaugh's personal $10 million. This is evidenced by the fact RKA has brought no action against Colbeck, (or any other party other than Mr. Kavanaugh, who never met the parties or spoke to them until after Colbeck had closed the deal) the party with whom it actually negotiated the facility.
Furthermore, during the tenure of its facility, RKA always wired proceeds from the facility to Relativity's working capital account, and in emails pushed Relativity to draw down more capital from the facility even when no movies were set to release.
Finally when Steven Mnuchin joined as Co-Chairman of Relativity and made a sizable investment in the company, as part of his diligence he asked Relativity's counsel, Jones Day, to provide an opinion on all of the company's debt facilities, including the RKA facility. Jones Day provided the opinion that the facility may be used for working capital and was and had been used in accordance with all documentation.
If RKA has an issue, it is with the sole party with whom it negotiated its agreement, Colbeck Capital.
Any rehashed claims by RKA, including the irresponsible use of provocative language like 'fraud' or 'misrepresentation' are only RKA's latest transparent attempt to rile up the press and the court in hopes of extracting money from the wrong party. As the facts clearly demonstrate, this is not a matter between Relativity, Kavanaugh or any of its executives and RKA, but between RKA and Colbeck.
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/statement-by-ryan-kavanaugh-chairman-and-ceo-of-relativity-media-regarding-rka-film-financing-300208756.html
SOURCE Relativity Media LLC
