Relativity Media outlines sale process

Relativity Media is pursuing a sale “for all or substantially all of” its assets and under the section 363 of the Bankruptcy Code and said this typically entails a two-step procedure.

The first stage involves Relativity obtaining bankruptcy court approval for “bidding procedures” that will set the timeline and clarify rules pertaining to expressions of interests, access to the data room for due diligence, bid submissions and determination of the highest or best bid.

The second stage is the hearing before the bankruptcy court seeking approval of the sale of the assets to the highest or best bidder following the auction.

Relativity has negotiated the price and terms of the initial bid in an asset purchase agreement (APA) with an entity called RM Bidder LLC, which as previously reported comprises certain of Relativity’s prepetition lenders.

The APA is also known as a ‘Stalking Horse APA’ and Rim Bidder the “Stalking Horse’.

In the coming weeks, the company and its advisors will oversee an auction process in accordance with bidding procedures to be approved by the bankruptcy court at the hearing on August 14.

Other potential bidders may submit competing bids – for either substantially all of the company’s assets in one or more lots – in accordance with the court-approved bidding procedures.

Under guidelines that may be modified by the court on the August 14 hearing, the interested party deadline is September 3. Parties wishing to submit a bid must make themselves known to Blackstone by this date, sign a confidentiality agreement and provide financial statements to support their ability to finance the deal.

The bid submission deadline is Sept 11.

By September 14 Relativity Media’s debtors, in consultation with the lender representative and the committee of unsecured creditors, will determine which bids qualify to participate in the auction.

The auction will take place on September 16 at Jones Day’s offices in New York.

The auction will start with highest or “otherwise best offer”, which may or may not be the Stalking Horse APA. The auction will proceed in subsequent rounds with bidding increments that have been initially set at $1m or higher. This auction may, if necessary, continue to September 17 and beyond if so established at the auction.

The sale hearing at Bankruptcy Court at 1 Bowling Green will take place on September 21.