UPDATE 2-Citigroup, Relativity agree to dismiss litigation
* Citigroup, Relativity agree to dismiss suits
* Both firms look forward to continuing business relationship
* Sony not a party to either lawsuit
(Adds lawsuit details, byline)
By Sue Zeidler
LOS ANGELES, July 2 (Reuters) - Citigroup Inc (C.N) and film financing company Relativity Media said on Thursday they agreed to dismiss pending breach of contract lawsuits filed against each other in November 2008 related to a $550 million film funding deal involving Sony Corp's (6758.T)(SNE.N) Sony Pictures.
Relativity's lawsuit centered on Citigroup's attempts to raise the interest rate on a revolving credit facility for the $550 million, five-year film slate financing deal, called Beverly I, through which Sony and Relativity planned to fund about 45 films.
"Both companies are pleased to have this matter behind them and look forward to continuing their business relationship," the companies said in a statement.
A spokesperson for Sony Pictures, which was not a party to either lawsuit, had no immediate comment, but the company had previously said that "contractually the financing of our films is secure."
In its lawsuit, Relativity said it would incur damages of about $50 million due to Citigroup's efforts to raise the interest rate on a $375 million revolver after trying and failing to insure the loan, rather than syndicate it, to earn higher fees.
Relativity also contended the unilateral attempt to refinance was illegal and an attempt to extract lost costs.
Citigroup Global Market sued Relativity saying it had the right to change certain terms of the original deal and that Relativity breached the contract by failing to comply with the new terms.
Citigroup said that "due to a number of factors, including the unprecedented turmoil in the financial and credit markets" it was unable to syndicate the loan.
