Senior executives at Ryan Kavanaugh’s Relativity Media have been forced to take steep pay cuts as the embattled company moves through 1 of the biggest bankruptcies in Hollywood history.
The reduction is pegged in the 20% range, according to sources.
Those impacted include Mr. Kavanaugh, President Tucker Tooley, co-COO’s Greg Shamo and Andrew Matthews, Mr. Matthews is also CFO.
On the film side, Robbie Brenner, President of film production, and Matt Alvarez, President of the multicultural division, will also see their pay cut.
Relativity declined comment.
It is unclear how many executives are impacted; one insider suggests it is only 10 to 15.
The morale at the company continues to suffer.
The move comes less than a week after Relativity, facing more than $1-B in liabilities, sacked 75 employees and filed for Chapter 11 in a New York Court.
FTI Consulting bankruptcy specialist Brian Kushner, the officer in charge of restructuring Relativity, is working out of the company’s Beverly Hills offices and is helping to guide the layoffs and reduction in pay.
Relativity Sports, Relativity EuropaCorp Distribution (the film marketing and distribution joint venture between Relativity and EuropaCorp, USA) and Relativity Education were among those not included in the bankruptcy filing. Nor were they impacted by layoffs or pay cuts.
The company’s fashion operation, M3/Relativity, was shut down last week and its employees terminates.
A day after the 28 July bankruptcy filing, lawyers for Relativity sought approval for a $45-M debtor-in-possession loan, but US Bankruptcy Court Judge Michael Wiles approved a much smaller amount, or $9.5-M, in advance of another hearing set for 14 August.
Stay tuned…
HeffX-LTN
Paul Ebeling