Relativity’s Ryan Kavanaugh, having blasted the lawsuit against him last night, is now lashing out again in a statement just released by him today. Kavanaugh confirmed yesterday’s Deadline story that Catalyst Capital sold off their share off debt. Anchorage Capital and others will take that on now. Kavanaugh also went on the attack in the statement (see below) saying that there is a group led by Colbeck Capital and Tony Vinciquerra who are working to execute a buyout scheme and then accuses Vinciquerra of orchestrating a campaign of false rumors to help them do that.
The statement also comes after the company is looking more and more like it will have no choice but to head into a Chapter 11 bankruptcy proceeding. If Kavanaugh cannot recapitalize, that is exactly what will have to take place as part of an overall financial restructuring of the company. That has happened in the past with MGM (also in the Anchorage portfolio) and the company actually emerged stronger in the end. But all the signs are clearly there.
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Here is Kavanaugh’s statement in full:
“We’ve remained silent during the past few weeks as false, speculative, stories have run about Relativity. At this point, we’re clarifying the situation to protect the company from this malicious witch-hunt,” said the Relativity CEO.
“Relativity has been working closely with our lenders, which include our long-term lender Anchorage Capital. Our lenders have been very cooperative and have been working closely with us to ensure that Relativity continues to move forward, grow and execute our business plan. Catalyst Capital fully funded a purchase of Relativity’s entire senior debt and over $130 million was wired to the company. In addition, Catalyst committed to providing an incremental $170 million of working capital.
Relativity’s current lenders, including Anchorage, decided that it was in the company’s best interest for them and others to own all of the senior debt versus having one group own such a large stake. Therefore, they exercised their contractual right to buy out Catalyst. The lenders have been working closely with Relativity to provide the company with further capital to keep the company stable and growing.
We have been aware that false rumors are coming from a group led by Colbeck Capital and Tony Vinciquerra who are working to execute a buyout scheme. Tony came to Relativity for one meeting under the guise of being a consultant to a well-known hedge fund before we learned that his scheme was to raise money to purchase Relativity. Tony has continued to meet with as many funds as possible to raise capital while spreading false, defamatory rumors in hopes of usurping new Relativity investors. Tony’s seat on the board of STX Entertainment is also a conflict of interest.
There is no concern by our lenders about the company’s P&A spending, and in fact, our lenders are providing Relativity with further working capital to ensure growth. Neither our lenders, nor Relativity are in any way concerned with RKA’s recent attempt to extract $10 million dollars of my personal capital under the guise of litigation, and we will not be surprised by their continued efforts to file baseless litigation. This will not dissuade the company or our lenders.
We thank our lenders for their continued, unwavering support.”
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