A hearing date will be set this week on the involuntary Chapter 7 bankruptcy petition filed against MGM/Pathe Communications.
Last week, the company asked U.S. Bankruptcy Judge Arthur Greenwald to expedite the proceeding before $365 million in bonds become due May 28 if the bankruptcy is not dismissed.
The bond agreements require MGM/Pathe to pay off the notes in full if the petition isn’t dropped 60 days after the March 29 filing date – a demand that MGM/Pathe could not currently meet.
The company has been trying to settle $12 million to $17 million in claims owed to the dozen petitioning creditors. A $145 million loan the company is waiting to receive from Credit Lyonnais Bank Nederland hangs on the claims being settled.
In documents filed with the bankruptcy court last week, MGM/Pathe pleaded: “Absent the immediate dismissal of this case, MGM/Pathe’s ability to conduct its traditional business… will be substantially if not totally eliminated.”
Also, MGM/Pathe failed to file its already delayed annual 10-K results April 19, giving no explanation for the tardiness or plans for an extension.