Unintentionally ironic scene from unreleased movie.
Here’s the thing about making loans to movie studios, especially movie studios called Relativity, as Paul Singer has long since ruefully learned: You only get your money back if they actually release the thing. And it’s apparently really hard to release movies when you’re bankrupt, even if it is a buddy comedy about a bank heist bankrolled by a bank loan.
CIT is trying to recover the $38.5 million it is owed related to “Masterminds” and other projects, according to securities and court filings….
Loans for a movie’s production are considered to be relatively safe, as this money is often loaned against expected streams of income from foreign and television distributors and tax credits. But Relativity filed for bankruptcy last July after the highly leveraged company suffered a string of box-office flops that more than outweighed its few hits, such as the movie “Act of Valor” and TV show “Catfish.” That cast the domestic release of “Masterminds,” and the other revenue typically contingent upon a film playing in U.S. theaters, into question.