Bemoaning the “petty bickering” from both sides, U.S. Bankruptcy Court Judge Michael Wiles today ordered Relativity Media to pay 80% of the fees, and all of the expenses, owed to its former restructuring advisor — FTI Consulting — for its work through the end of September.
Relativity challenged the $4.58 million FTI wanted for its work and $251,504 for expenses. It said that the firm had exceeded its authority in making decisions that did not serve the studio — a charge that FTI rejects.
But the judge said that the initial payment agreement he authorized “says very explicitly” that FTI “shall” be paid at least 80% of the fees and all expenses it filed unless there was a timely objection.
Relativity “did not object” when the expense claims were made, Wiles said.
He added that his order shouldn’t be seen as a judgment on any objections Relativity might make on the remaining amounts owed to FTI.
Wiles was clearly fed up by what he called “petty bickering that was appearing in the papers” over “what should be minor disagreements…..I won’t tolerate it from either direction.”
Before the ruling, a lawyer for Relativity’s unsecured creditors said that the dispute with FTI “was being teed up for a big fight today” noting that “there’s animus on both sides.”
The committee urged the judge to make sure that the battle doesn’t “distract from our [February 1] confirmation hearing” for the studio’s plan to emerge from Chapter 11 bankruptcy protection.
In addition to his ruling on the fight involving FTI, Wiles also ordered Relativity and creditors to “go back to the drawing board” to resolve a technical dispute involving the terms of a debtor-in-posession (DIP) financing agreement.
Relativity said the terms require “essential, albeit modest, modifications.”
After a private meeting, Wiles extended the deadlines for parties to negotiate the DIP terms but didn’t move the February 1 date for the important confirmation hearing.
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