Ryan Kavanaugh will remain CEO and chairman of his embattled entertainment company after it emerged on Monday that he had struck a deal with the Toronto-based distressed asset specialist.

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According to a well-placed industry source, Catalyst Capital has acquired Relativity’s entire $150m senior debt and will additionally invest $170m for long-term growth.

Kavanaugh retains his role as CEO and chairman. His control of the company he founded 11 years ago has come under intense scrutiny in recent weeks as he raced to pay off Relativity debt.

The 13-year-old Catalyst gets a seat on the board and is understood to have agreed to a one-year repayment extension.

According to its website the Canadian firm has $2.8bn in capital commitments and targets “control and/or influence” investments.

Despite numerous attempts by Screendaily, neither Relativity nor Catalyst returned calls.

Negotiations with Relativity’s subordinated debt holders are believed to be ongoing. They include Colbeck Capital, the New York firm with whom Kavanaugh has previously clashed.

The source said there was confidence that these creditors would also agree to a one-year repayment extension.

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