The battle between Relativity Media CEO Ryan Kavanaugh and RKA Film Financing is intensifying, with just a little more than a week before the studio hopes to persuade U.S. Bankruptcy Court Judge Michael Wiles to let it exit its Chapter 11 bankruptcy protection.
RKA is the Colbeck Capital-backed entity that in 2014 helped to finance five Relativity films; Kavanaugh also kicked in $10 million. RKA alleges that the studio inappropriately used the cash for corporate purposes.
Today, Kavanaugh says in a press release that RKA “intends to once again rehash the false and outrageous claims it has been making against Relativity Media.” He believes the financiers plan to “misuse the restructuring process to attempt to extract” his $10 million.
Colbeck declined to comment.
Kavanaugh says that in 2014 his company’s law firm, 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 a problem, the CEO says, “it is with the sole party with whom it negotiated its agreement, Colbeck Capital.”
Kavanaugh says in his press release that RKA plans to “rile up the press and the court in hopes of extracting money from the wrong party.” This is “not a matter between Relativity, Kavanaugh or any of its executives and RKA, but between RKA and Colbeck.”
This isn’t his only beef with Colbeck. Deadline reported on Thursday that Kavanaugh and his allies including Relativity’s unsecured creditors are preparing to accuse the entity of committing fraud and will seek $500 million in damages. The CEO believes that Colbeck — at a point when it was hired to advise the studio — secretly sought to take it over, and steered potential investors away.