March 16, 2016 — Pepperdine Law professor Mark S. Scarberry is quoted in a Variety article titled “Without Kevin Spacey or New Equity, Relativity Now Must Face Judgment Day.” The article discusses Relativity Media’s reorganization plan in its bid to be released from Chapter 11 bankruptcy protection.
“Most companies owe some debts, and there’s nothing wrong with that,” said Mark S. Scarberry, a professor of law at Pepperdine University. “The question is do they owe too much debt relative to the overall value of the company and the type of industry they are in?”
He went on to note that unlike other businesses, in the film industry it can be difficult to project future revenues. Have one blockbuster and it can paper over losses, but finding the diamond in the rough is a challenge that Scarberry likened to “wildcatting for oil.”