Citibank, trying to bring some financial acumen to the Hollywood cesspool, is now the target of lawsuits from Ryan Kavanaugh’s Relativity Media, while Citibank is simply saying back-at-ya, according to the trades.
A legal battle has erupted between Kavanaugh’s Relativity Media and banker Citigroup Global Markets over a multi-million-dollar financing deal to invest in as man as 45 films produced or acquired by Sony Pictures, including Adam Sandler’s awful clunker “You Don’t Mess With The Zohan.”
They may have the money, but nobody says they’re critics.
Relativity filed suit Tuesday in Manhattan federal court against Citigroup, claiming breach of contract. Citigroup filed its own lawsuit in New York Supreme Court in Manhattan the same day.
More on Citibank below:
The legal fight is the latest byproduct of a worsening financial picture both globally and in Hollywood. The Dow fell for a third straight day, shedding 411 points. Citigroup is at the eye of the storm in the media and entertainment sector, which is one reason its shares dropped nearly 11% to $9.64, their lowest level in 13 years.
A massive round of layoffs — said to be several thousand — is widely rumored to be imminent at Citigroup. The bank said only that layoffs will continue “through year-end” and gave no confirmation on the exact number.
Relativity alleges Citigroup has tried to force it to change the terms of a financing deal inked in January 2007 that provided funding for projects with Sony.
Citigroup’s desire to change the terms of the loan comes after the insurance company it secured a rating and “wrap” with, Ambac Assurance Corp., took on serious financial problems in the wake of the economic collapse.
Relativity claims the amendments to the deal would it at least $50 million.
In a statement, Sony said it does not comment on pending litigation but that “contractually the financing of our films is secure.”
Citigroup claims the terms of the deal are flexible and that it has the right to amend it. Its lawsuit seeks to enforce the proposed amendments.