Movie Financier Hedge Fund Files for Chapter 11 Over Increasing Litigation Costs
by Justin A. Saporito, Law Clerk
Aramid Entertainment Fund, Limited filed for Chapter 11 protection in the Bankruptcy Court for the Southern District of New York on June 13, 2014. Debtor has declared assets of $237.3 million and consolidated debt of $11.5 million. Debtor was assigned case number 1:14-bk-11802, a judge has yet to be assigned. Approximately 96 creditors were listed in the petition; among them are several other Aramid entities including Aramid Liquidating Trust, Ltd. and Aramid Entertainment, Inc. which jointly filed with the Debtor and were assigned consecutive case numbers.
Aramid Entertainment Fund, Limited is part of Aramid Capital Partners, LLP, a London based hedge fund that specializes in financing movies. According to their website, Aramid Capital has provided financing for thirty-two (32) movies including Paranormal Activity, W., and How to Lose Friends & Alienate People. Please click here for a list of their productions.
Debtor filed for Chapter 11 protection due to the cost of ongoing litigation against several of its borrowers who failed to repay loans or violated film-financing agreements. One such suit began in February 2012 and is over an alleged $44 million in losses. Debtor invested $22 million in a financing deal between Relativity Media, LLC and Sony Pictures. Debtor alleges that executives from Fortress Investment Group, LLC used Aramid’s confidential information, which was allegedly obtained during a 2010 portfolio review as part of a proposed purchase of Debtor’s assets, to make a deal with Sony that destroyed Debtor’s investments.
Posted on June 19, 2014, in Chapter 11 Debtors, entertainment industry, film industry, New Chapter 11 Filings, New York, NY chapter 11 debtors and tagged Aramid, attorney, bankruptcy, business law, chapter 11, Creditor's Rights, Entertainment, film, Financing, firm, Hedge Fund, Investment, justin saporito, kraemer, litigation, mazur, mazurkraemer, Movie, new york, New York City, New York Southern Bankruptcy Court, NJ, NY, reed, representation, restructuring, salene, smith, Sony Corp., United States bankruptcy court, weirton, WV. Bookmark the permalink. Leave a comment.