Relativity Bankruptcy: Paul Singer’s Affiliates Challenge Speedy Sale Plans

Two subsidiaries of Paul Singer’s Elliott Management — Heatherden Securities and Manchester Library Co. — are back on the attack against Relativity Media’s effort to persuade the U.S. Bankruptcy Court to approve a sale calendar.

In late August the creditors seemed to accept the proposed timetable that calls for bids to come in by September 25 ahead of an auction on October 1, and a sale agreement that could close on October 20.

But Heatherden says in a filing today that it now opposes a sale of Relativity’s assets “in such a rapid process.” Other creditors want to move quickly to get the studio back on its feet after filing for Chapter 11 bankruptcy protection. A group of them, known as Stalking Horse Bidders, have offered $250 million.

Heatherden says it has “an open mind,” but believes that Relativity “has substantially greater value than is likely to be achieved through the proposed sale.”

The firm adds that it’s filing an objection now “to protect its rights” if it doesn’t like the outcome. It plans to “pursue discovery, including with respect to appraisals and other valuations of [Relativity’s] assets and other alternatives available to maximize value, including through a plan of reorganization.”

Manchester Library joined the complaint “in an abundance of caution.” It has rights claims on films that have “complex underlying distribution arrangements” with exhibitors. Some of the deals mix its releases with others it doesn’t own. Manchester “has begun discussions with [Relativity] about this subject and is hopeful arrangements for the sale will be agreed. If not, Library will address this issue in a more detailed objection.”

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