A last minute problem has erupted with Relativity Media CEO Ryan Kavanaugh’s effort to buy control of the studio from its biggest creditors. He’s now battling with VII Peaks Capital, one of the firms he had touted as a financial backer. Relativity is alleging that the San Francisco based investment firm reneged on an agreement to help fund a $90 million payment to the studio’s senior creditors. It was originally going to consist of $60 million in cash. That was reduced to $30 million following the dispute with VII Peaks.

In a new financial restructuring that includes shouldering more debt than anticipated and help from an additional cash infusion from investor Joseph Nicholas, Kavanaugh and a small amount (we heard last week that it is around $4M) from billionaire Ron Burkle’s OA3, Relativity has reached an agreement without VII Peaks. “This does not affect the closing of the deal by the Kavanaugh-led investor consortium that was formally closed and announced last week,” said a spokesman for Relativity. The consortium is expected to present its new fangled financial restructuring, sans VII Peaks, tomorrow. But it doesn’t end there.

Expect a contentious hearing tomorrow in U.S. Bankruptcy Court where Judge Michael Wiles will review the matter. Relativity is expected to argue that VII Peaks knew that its commitment was binding and due on October 20. In response, it asked the Judge to freeze the amount that VII Peaks put into an escrow account as part of its agreement with Relativity, and the Court obliged.

Restraining orders and possible charges of fraud could complicate Relativity’s effort to emerge from bankruptcy in January. In fact, Relativity took the PR initiative this morning by releasing this statement predicting that VII Peaks will charge the studio with fraud:

“VII Peaks Capital is attempting to obfuscate its own failure to perform by shifting responsibility to the investors, including the CEO who worked around the clock to save the company. Since Relativity’s suit, VII Peaks has as much as admitted that they lacked the necessary funding, instead trying to broker third party capital to cover their own shortcomings. Indeed, they have requested two months to close on a transaction that they understood needed to close by October 20.

We fully expect that their next move will be to concoct some claim of fraud in an effort to disguise the simple fact that they could not close. We have also learned this is not the first time they have misrepresented their capital capabilities and oversight. The good news is that Relativity, with the support of its stakeholders, was able to preserve the enterprise as a going concern, yet again, notwithstanding these distractions. Of course, VII Peaks maneuvers were not without a cost, and the company and its stakeholders will continue to seek redress for the resulting harm in the courts.”