Hollywood’s legendary film studio, Metro-Goldwyn-Mayer
is in the processed of negotiating a pre-packaged bankruptcy to wipe out a cool
$4 billion in debt. The proposed plan would put the founders of Spyglass
Entertainment at the company’s helm.
MGM said Thursday that after weeks of discussion with investors and creditors alike, it is now seeking lenders’ approval for the reorganization plan to try and recover the iconic studios. MGM said that the proposed plan exchanged the $4 billion debt for a 95.3 percent share of equity in the company for secured lenders, which would become affective once the company is out of Chapter 11.
The famous studios is home to the much-loved Pink Panther and James Bond series’ but have been struggling with debt for years. If the restructuring is agreed to, it would clear the way for the two-part prequel to “Lord of the Rings”, “The Hobbit” to be made. The project, which is much anticipated by Tolkien fans, has been held up due to the financial woes of MGM, who would be making the films with Time Warner Inc.
Lenders have until October 22 to approve the package. The plan needs to be endorsed by over 50 percent of the secured lenders who hold the debt for it to pass. If the agreement is given, MGM will begin Chapter 11 proceedings immediately.
Once the studio emerges from the bankruptcy proceedings, the new chairmen of the studios plan to ramp up the production of film and television programs from the studio.
