Netflix’s bid to stream two Relativity Media films before their theatrical release suffered a major setback on Friday.
Manhattan bankruptcy Judge Michael Wiles issued an order banning Netflix from releasing the films before their run in theaters, saying the move would hurt the Hollywood studio’s reorganization efforts.
Netflix claimed the studio’s lengthy stay in Chapter 11 caused it to miss “outside” dates to deliver films “Masterminds,” a comedy starring Zach Galifianakis and Kristen Wiig, and horror flick “The Disappointments Room.”
That failure triggered contractual provisions, giving Netflix the right to stream the films to its customers even before they were shown in theaters, according to the company.
Netflix also argued that any opposition to its plan should be resolved by an arbitration panel — which Wiles also nixed in his order on Friday.
Lawyers for Netflix, led by CEO Reed Hastings, said they plan to appeal.