MGM moves towards Chapter 11 exit
03 Dec 10 -

Bankrupt US studio MGM’s Chapter 11 reorganisation is set to take effect with the next two weeks following approval of its plan by a New York court.

MGM expects to arrange US$500 million (€380 million) in financing by mid-December to fund its operations after its exit from Chapter 11 in a deal that will see the group’s existing private-equity shareholders including Providence Equity lose out.

Gary Barber and Roger Birnbaum will become joint CEOs of the studio. Following an agreement last month by MGM’s creditors to exchange their debt for a collective 95% of the company’s equity, changes were demanded by 18% shareholder Carl Icahn, including the removal of the Spyglass library of films from the deal. Icahn and other creditors will now acquire a collective 99% ownership of MGM, with Spyglass retaining only 1%.