MGM files for bankruptcy protection

The studio that canceled the latest James Bond film last summer due to financial trouble, but along with along with Warner Bros and New Line Cinema recently gave the green light to start production on Peter Jackson’s two part epic The Hobbit has filed for bankruptcy.

Under the bankruptcy plan filed in New York, Spyglass Entertainment will get less than 1% equity stake in MGM (originally slated for 5%). Gary Barber and Roger Birnbaum, founders of Spyglass, will serve on the MGM board along with major MGM debtholder Carl Icahn.

In the plan, MGM lenders will receive 95% of the company in exchange for close to $4 billion in debt holdings. Icahn, whose last minute demands held up the filing, will be allowed to select MGM’s director of the board once the company emerges from bankruptcy.

“Having received approval through our recently completed solicitation process, we are pleased that the lenders support MGM’s approach. We now look forward to quickly emerging from Chapter 11,” said MGM chief Steve Cooper in a statement.

Metro-Goldwyn-Mayer has produced and distributed such films as The Wizard of Oz, Moonstruck, and The Dirty Dozen as well as the entire James Bond franchise including producing the most recent Bond film Quantum of Solace (2008).

In related news, Lions Gate Entertainment Corp. is suing major MGM debtholder Carl Icahn claiming he misled shareholders and interfered with the company’s proposal to merge with MGM.

Via Reuters & The Hollywood Reporter

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