Halmi's RHI Entertainment files for Chapter 11
In a move that underscores the dramatically changing of tastes of television viewers and the overleveraged finances of some media companies, the once-vibrant Robert Halmi Inc. production company has filed a prepackaged Chapter 11 reorganization in New York Bankruptcy Court.
In its Friday afternoon filing, RHI Entertainment listed assets of $524.7 million and liabilities of $834 million. The company plans to keep operating.
RHI Entertainment specializes in made-for-TV movies and miniseries, a genre that has slipped in popularity as younger viewers have warmed more to reality and competition shows such as Bravo's "The Real Housewives of Beverly Hills" and MTV's "Jersey Shore."
The filing had been expected. The company has spent the last few months securing creditors' approval for its prepackaged bankruptcy. Its largest creditors are JPMorgan Chase and Bank of America.
"Today's action is the next step in the process to reduce our debt and formulate a new capital structure that will better enable us to invest in our businesses and continue to provide one of a kind content to our customers," the company's chief executive, Robert Halmi Jr., said in a statement.
Major creditors have approved the company's plan for recapitalization that would reduce its debt by approximately 51%, or $309 million, while also allowing it to lower its interest costs. In its statement, New York-based RHI said it also had struck agreements that it said would eliminate, reduce or "favorably amend the payment terms associated with over $100 million in potential claims of a number of creditors, including various production partners and talent guilds."
The Screen Actors Guild has a claim against RHI valued at more than $12.73 million. The company owes the Writers Guild of America nearly $3.8 million and the Directors Guild of America $3.42 million, according to the filing.
The company's rich history could itself be the stuff of a made-for-TV movie. Founded in 1979, the company spent decades pumping out programming, including the miniseries "Lonesome Dove," with Robert Duvall and Tommy Lee Jones, and the TV movie "Gulliver's Travels," with Ted Danson and Mary Steenburgen. In recent years, RHI claimed at least half the market for TV miniseries and movies, many produced for the Hallmark Channel.
RHI was a public company until 1994, when Hallmark Cards bought out the Halmi family. Twelve years later, in 2006, Robert Halmi Jr. and other investors bought it back from Hallmark, which left the production company burdened with debt of more than $600 million. Two years later, RHI mounted a public offering which raised $189 million -- not as much as the company had hoped. Then the recession hit and its primary buyer, Hallmark Channel, pulled back, triggering a cascade of financial misfortune. Its stock was delisted earlier this year.
-- Meg James