Ryan Kavanaugh’s salesmanship, smarts and charisma help explain how the founder of a company that has regularly experienced financial strains, lawsuits and executive turnover is also widely credited with leading a revolution in which Wall Street banks became comfortable investing in the notoriously high-risk movie business, the Wall Street Journal reported today. In recent months, as debt payments were missed and cash ran short at Relativity Media, the CEO insisted that employees focus on the positive: No one was allowed to discuss “bankruptcy” in front of him. Nonetheless, on July 30 Relativity filed for chapter 11 restructuring, declaring that it had assets worth $560 million and liabilities of $1.18 billion. It laid off 75 employees without severance, leaving 89. The studio, distributor of midrange movie releases like “Act of Valor” as well as the reality show “Catfish,” is now up for sale. Interested bidders must make offers by Sept. 25. Already, there is a $250 million stalking-horse bid by creditors who are at odds with the CEO. Some of Relativity’s more successful divisions, like its TV operation, could be appealing to smaller studios, but the bankruptcy sale isn’t expected to set off a bidding war in Hollywood.
