Metro-Goldwyn-Mayer
Inc. has filed for bankruptcy-protection cementing a long fall for the iconic
Hollywood studio with the roaring-lion logo.
MGM
filed a “pre-packaged” Chapter 11 bankruptcy in New York that has
approval from nearly all its creditors. Creditors last week approved a plan to
forgive more than $4 billion in debt for ownership stakes in the restructured
studio and turn over management to Spyglass Entertainment co-founders Gary
Barber and Roger Birnbaum.
MGM
said it anticipates a bankruptcy judge approving its restructuring in about a
month, paving the way for a quick trip through bankruptcy court. The studio
plans to raise about $500 million upon exiting bankruptcy to fund new films and
television shows along with other operations.
Stephen
Cooper, a turnaround specialist and co-founder of Zolfo Cooper, will continue
to lead MGM during its bankruptcy-court restructuring, the studio said.
MGM
delayed its filing to negotiate with dissident creditor Carl Icahn. Mr. Icahn
had offered to buy out other MGM creditors at a premium to upend the vote on
the Spyglass restructuring plan but failed to get enough support to block the
deal.
Mr.
Icahn has been pushing MGM’s creditors—led by J.P. Morgan Chase & Co. and
hedge funds Anchorage Advisors and Highland Capital Management—to merge with
Lions Gate Entertainment Corp., a rival studio that the activist investor has
been trying to take over all year as its largest shareholder.
To
get its reorganization plan approved by a bankruptcy judge, MGM needed
creditors holding roughly two-thirds of the studio’s $4 billion debt load and
more than half of individual debt holders to vote for the deal. In the end, Mr.
Icahn remained among the only holdouts, the people said.
He
later agreed to support the plan after MGM altered parts of the deal.
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