Relativity Slams “False” Financial Claims By Neal Moritz; Producers Of Halle Berry Pic ‘Kidnap’ Fight Proposed Sale – Update

UPDATE, 12:14 PM: Well, with all the hits they taken the past few months, Relativity aren’t letting Fast & Furious producer Neal Moritz’s claims of fraud go unanswered.“The allegations by Mr. Moritz are baseless and patently false,” said a spokesperson for the Chapter 11 Ryan Kavanaugh-led company today. “Relativity Media entered the Hunter Killer agreement in good faith, and has detailed its efforts to refinance its balance sheet in its court filings.”

In a filing late last night (see below) to stop Relativity keeping the project or shuffling it over to  new owner, Mortiz made it clear he obviously sees the situation very differently. The producer and writers on the in-development pic allege that they were “misled” on getting in bed with the company – a company that they say claimed nothing but robust financial health. As they say, death by a thousand paper cuts …

PREVIOUS, 12:12 AM, EXCLUSIVE: The producers of the Luis Prieto-directed thriller about a mother who will do anything to get back her child tonight say the Ryan Kavanaugh-run company has no right to hand over their unreleased Halle Berry-starring film to a new owner – and Relativity also owes them $176,000 for re-shoots and an on-set photographer.

“Permitting Relativity to assume and assign the Distribution Agreement to a third party would prevent KHL from obtaining the full benefit of its bargain,” says an objection filed late Thursday by Kidnap Holdings, LLC (read it here). “It would also foist upon KHL a ‘creative team’ wholly unfamiliar with KHL – potentially composed of Wall Street bankers rather than Hollywood veterans.” The producers and Relativity formally inked a distribution deal back on September 8, 2014 for the flick at that year’s Toronto Film Festival in a CAA brokered deal.

While its release date was moved around several times and then pulled from the calendar altogether after Relativity filed for Chapter 11 on July 30, Berry told fans of her CBS TV series Extant on September 9 online that the pic would be coming out early next year:

There is no release date for the film right now and this latest action looks likely to freeze Kidnap even more.

Along with Masterminds, Kidnap has become one of the jewels in the tarnished Relativity halle berry sept 11 2015crown for any stalking horse or potential new buyer. However, if Gold Star Films’ Joey Turfaro and the other producers have their way, Relativity or its new owners won’t have a chance to snatch the Berry starrer for themselves. “Prior to any assumption or assignment of the Distribution Agreement, KHL is entitled to notice of the proposed identity of the assignee and the nature of the adequate assurance of future performance that the assignee can and will provide,” says their 22-page filing Thursday in federal bankruptcy court in NYC.

“Relativity’s distribution arm had the capability to fulfill its contractual obligation to release the Film on at least 1000 screens,” notes the objection of the benefits it thought it was getting with Kavanaugh and crew, who were also given final cut privileges on the pic. “Moreover, Relativity’s output agreements, including with Netflix, redounded to KHL’s benefit by virtue of the collections waterfall provisions of the Distribution Agreement. That is, KHL’s ability to profit from the Film’s release depends in part on the guaranteed revenue that would be generated under Relativity’s output agreements, including the Netflix output agreement. All of these aspects of the Distribution Agreement render it a personal services contract.”

And it the particulars of a personal services contract under the law is why the producers say they can stop Kidnap from going to Relativity’s highest bidder. “Personal services contracts, such as the Distribution Agreement, cannot be assumed and assigned without the counterparty’s consent, pursuant to … the Bankruptcy Code.”

With bids set for September 25, midnight ET Thursday was the cutoff for companies with deals or leases with Relativity to file objections.

Among the other late-night filings that hit Relativity’s docket on Thursday were objections by Fast & Furious producer Neal Mortiz and the writers of the potential Hunter Killer film to seeing their project shifted over to new owners or stay in the company’s hands.

Set to star Kavanaugh pal Gerald Butler and based on the novel Firing Point by George Wallace and Donald Keith, the options and agreements involving Hunter Killer were “fraudulently induced” and hence not binding. Claiming they were “misled” on the true financial state of Relativity, Moritz and the writers say in their objections and declarations they never would have made any deal with the company in 2009 or extended the option with the Kavanuagh-led gang several times, including as recently as 2013.

News of the Hunter Killer filings were first reported by Variety.

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