MGM planning prepackaged bankruptcy, Spyglass takeover NOT "MGM Resorts International" NOT " Sunday - October 10, 2010
by Darren Sumner
We generally tend to pass over the news on MGM‘s financial machinations, but this month there is some big news on the future of the company that owns the Stargate franchise. Since it is bound to stir questions among Stargate fans (not to mention fans of James Bond and The Hobbit, as both film franchises are waiting on MGM’s ability to pay for them), we wanted to let you know what’s up.
The historic studio is more than $4 billion in debt, and its production slate has come to a grinding halt over the past year. With its creditors granting extension after extension on MGM’s loan payments, the plan at the start of 2010 was to find another company to buy them out. So MGM solicited bids (it has Bond, Stargate, and a highly coveted 4,000+ title film library), but nothing came anywhere close to what they were hoping to get.
Rather than be forced by its creditors into a type of bankruptcy that could bring an end to the 86-year-old studio, resulting in all of its assets being sold off and creditors walking away with pennies on the dollar, they’ll vote this month on a plan to enter a prepackaged Chapter 11 bankruptcy. This means that the studio and those to whom it owes money will go before a judge with a plan for payment and reorganization in hand.