EXCLUSIVE: This is a twist in Relativity Media’s bankruptcy saga: In the auction that took place on Thursday and Friday the group of creditors known as Stalking Horse Bidders withdrew their offer to buy the entire company for $250 million and agreed to buy just Relativity Television — the most vibrant operation — for $125 million.

In the auction, “No single or aggregate bids were received for substantially all of [Relativity’s]  assets and thus no bids were deemed Qualified Bids,” the company told the U.S. Bankruptcy Court in a filing that you can read here. The proposal, to be brought to Judge Michael Wiles on Monday, means that Stalking Horse would own TV and Relativity would use the remaining assets “to form the basis of a plan of reorganization.”

That may leave other operations, including film, with Relativity — and under its CEO Ryan Kavanaugh. We’re told that he is working to strike a deal with the senior holders, also known as RM Bidders Holding, for an undisclosed amount of cash and debt to take care of their claims. The group includes Anchorage Capital, Falcon Investment Advisors, and Luxor Capital.

The Kavanaugh group came in with a “substantial cash offer,” says a source close to the proceedings.

But any agreement must be signed off on by Wiles, and it comes with a lot of contingencies. For instance, Kavanaugh must prove he can raise enough capital to continue to manage the assets. That would include the non-TV assets with the exception of four films including The Lazarus Effect and Woman In Black 2. He must also show that he has the financial wherewithal to manage the assests, but there is no retention clause so he would not have to honor any employment contracts moving forward.

Sources close to the Stalking Horse group said that they would be “happy with the outcome.”  TV is the comapny’s most desirable asset.

If Kavanaugh is successful, then distribution partners such as Netflix, Fox Home Entertainment and EuropaCorp would have to decide whether they want to continue to do business with him. All have reserved the right to object to a sale. Those objections will be heard in court.

The company says that the TV unit, launched in 2008, has 29 series in production including CBS’ new series Limitless, MTV’s Catfish: The TV Series, Food Network’s The Great Food Truck Race, and Lifetime’s Kim Of Queens.