Metro-Goldwyn-Mayer, the fabled studio whose origins go back to Hollywood’s earliest days, filed for bankruptcy protection, sagging under a mountain of debt.
The filing, made Wednesday morning in New York, came after MGM’s leading creditors struck a deal with corporate raider Carl Icahn, who had amassed about 15% of the company’s debt and was previously pushing for a merger between MGM and rival studio Lions Gate Entertainment.
Instead, Icahn agreed to support a plan under which the chief executives of film production and finance company Spyglass Entertainment will run MGM when it exits Chapter 11, which could occur as quickly as next month.
Under the prepackaged bankruptcy plan, MGM’s $4 billion in debt will be swapped for more than 99% of the equity in the reorganized company. Spyglass principals Gary Barber and Roger Birnbaum will become co-chief executives and co-chairmen, managing a smaller studio with lower overhead and producing fewer movies.