As Relativity Media LLC presses forward with its second bankruptcy in as many years, a government watchdog has asked a judge to bring the Hollywood studio’s first chaotic chapter 11 case to a close, WSJ Pro Bankruptcy reported. During a hearing yesterday at the U.S. Bankruptcy Court in New York, Relativity won continued access to financing critical to advancing its latest bankruptcy, but future hearings are likely to present the company with a long list of challenges. In an objection filed on Friday, a lawyer for U.S. Trustee William Harrington, the government watchdog, asked Judge Michael Wiles either to convert Relativity’s first bankruptcy to a chapter 7 liquidation or to dismiss the case entirely. Relativity has “materially defaulted” on the terms of its first chapter 11 plan and “unequivocally repudiated their commitment to pay claims,” the lawyer, Greg Zipes, said in court papers. A hearing on the matter is set for June 28.
