Netflix plans to stream two movies produced by Hollywood studio Relativity Media even before their theatrical debut. The studio is worried that this move will prove devastating for it and will cause it to fail in its efforts of regaining its footing in the industry after its emergence from bankruptcy protection, says The Wall Street Journal.

Netflix, Inc. Wants To Ruin Our Comeback: Relativity Media

Netflix’s move could harm the studio

Relativity Media says the two movies Netflix is planning to stream are key elements in its nascent comeback. The first is a comedy called Masterminds that stars Kristen Wiig, while the other is a thriller with Kate Beckinsale that’s called The Disappointments Room. Both movies were scheduled for release in U.S. theaters last year with a subsequent launch planned on Netflix, but their debut got suspended because Relativity collapsed into bankruptcy.

Earlier this year, Relativity won final court approval for its reorganization plan, which calls for the two movies to be released in theaters in September and December, followed by a release on streaming services. However, Netflix is threatening to upend that timeline, the company says. Relativity’s lawyers say that with the two movies getting pre-released on Netflix’s streaming service, the studio’s plans for the theatrical releases will be ruined.

One of the sources familiar with the company’s plans told The Wall Street Journal, “It would be, at a minimum, an embarrassment and make their attempts to continue to raise financing more difficult.”

Netflix unwilling to back down

Relativity filed court papers over the weekend saying the streaming giant is making an attempt to extract a “pound of flesh” with this move after facing rejection from a bankruptcy judge to the objections it was raising to the studio’s reorganization plan.

In the Saturday filing with the U.S. Bankruptcy Court in New York, the studio’s lawyers said, “Because Netflix did not receive the outcome it desired at the confirmation hearing, it is now attempting to hijack the process and to purposely destroy value critical to [Relativity’s] successful reorganization.”

Netflix shares a long-standing relationship with Relativity, and it used this to secure licenses for exclusive distribution of films on its streaming service in exchange for a fee calculated based on the films’ domestic box office revenue, the court papers show. The streaming firm filed a response on Monday saying the law is on its side.

Netflix lawyers argue in the court papers, “Relativity is now unwilling to live with those dates, because it has determined that it prefers different dates in connection with its plans for release and distribution of the films.”