• 05
  • November
    2010

Metro-Goldwyn-Mayer Studios Inc filed for Chapter 11 bankruptcy this week. According to Reuters, MGM has filed for Chapter 11 protection from creditors in order to restructure its finances. The Hollywood studio with the roaring lion logo has struggled with too much debt since they were sold in a 2005 leveraged buyout.

There had been discussion of a possible merger with Lions Gate Entertainment Corp, but the bankruptcy plan was decided on as the best option for the company to reorganize and move forward. The company will swap $4 billion of debt for equity with its secured lenders Credit Suisse Group AG and JPMorgan Chase & Co. After the swap, the secured lenders will own the majority of the company.

The studio's secured lenders were in support of the plan to swap debt for equity. One of its largest debtholders, billionaire Carl Icahn, was also in support of the swap after originally supporting the merger idea.

Founded in 1924, the studio has produced or released some of the most famous films of our time. The studio made "The Wizard of Oz." It also produced, released or controls the Rocky, Pink Panther and James Bond series of films.

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UPDATE 5-MGM studio files for bankruptcy, Icahn backs plan (Reuters)