Add the Motion Picture and Television Fund’s MPTF Foundation charity to the list of entities asking the U.S. Bankruptcy Court to make sure it isn’t stiffed if Relativity Media emerges from bankruptcy by selling itself to a group of creditors offering $250 million.
The movie and TV studio agreed in 2014 to pay $600,000 be a “Presenting Sponsor” in 2014 and 2015 at MPTF’s annual “Night Before” events held before the Oscar awards. The studio filed for Chapter 11 bankruptcy protection in July, and didn’t make a scheduled $75,000 payment at the end of August with another $75,000 check due by the end of November.
MPTF fulfilled its end of the bargain, it says today in a court filing: The fundraiser is “a highly prominent and important event in the entertainment industry” that gave Relativity “important access, influence, and goodwill.” As one of six Presenting Sponsors the studio “reaps the benefit of interacting and networking with the entertainment industry’s most elite talent, actors, producers, and directors, with tickets to the VIP dinner party, VIP reception, and main event, used to promote its film and television projects.”
But the charity fears that it will be shortchanged if a group of Relativity creditors, known as Stalking Horse Bidders, succeeds in its effort to buy the studio in a bankruptcy auction. A court filing listing proposed payments following a sale has no amount owed to MPTF.
In the seven-page payment document “the first four pages are fluff unrelated to Stalking Horse,” MPTF says, and the last three indicate that it’s “walled off from liability” through a “special purpose limited liability company.” Stalking Horse says it will put up anywhere from $60 million to $80 million to pay off Relativity contracts, estimated to be require between $65 million and $90 million.
“The proposed cash infustion appears to be millions of dollars short,” and backed by a special purpose entity “with no operating history or financials,” MPTF says. As a result, Relativity and Stalking Horse have “deprived the contract counterparties of any meaningful notice of proposed cures…and no proposal for a cure timeframe.”
MPTF says it “impacts thousands of people each year who have committed their lives to a career in entertainment” by funding social services for the needy.