Hollywood icon MGM files for bankruptcy
The Chapter 11 filing follows last week's vote by creditors to support a prepackaged bankruptcy in which MGM will shed more than $4 billion of debt and hand control to its secured lenders.
Management would be assumed by Gary Barber and Roger Birnbaum, who run the Spyglass Entertainment film company.
MGM filed for protection from creditors after striking an agreement with Carl Icahn, one of its largest debtholders, to win the billionaire's support for a restructuring.
Icahn previously supported a bid to merge MGM with another studio, Lions Gate Entertainment Corp. MGM also said its secured lenders overwhelmingly support the reorganization.
MGM was founded in 1924 and is known for its roaring lion logo. It has produced, released, or controls many of Hollywood's best-known films, including "Ben-Hur" and the Pink Panther and Rocky film series.
Spyglass' involvement with MGM has also been seen as key to a lucrative arrangement with Time Warner Inc's Warner Bros Pictures and the director Peter Jackson to make two movies based on J.R.R. Tolkien's novel "The Hobbit."
The MGM reorganization calls for secured lenders including Credit Suisse Group AG and JPMorgan Chase & Co to swap more than $4 billion of debt for equity, giving them ownership of most of a reorganized company.
MGM has struggled with too much debt since 2005 when it was sold in a US$2.85 billion leveraged buyout.
The buyout group included private equity firms Providence Equity Partners, TPG Capital LP, Quadrangle Group and DLJ Merchant Banking Partners, as well as Comcast Corp and Sony Corp.
MGM said it expects a federal bankruptcy judge to approve the restructuring in about 30 days.
The Los Angeles-based company and roughly 160 affiliates sought protection from creditors with the US bankruptcy court in Manhattan. Judge Stuart Bernstein was assigned to the case.
MGM had $2.67 billion of assets and $5.77 billion of liabilities before accounting adjustments as of September 30, a court filing shows; Kazinform cites China Daily.
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