You will be redirected back to your article in seconds

Judge OKs MGM bankruptcy motions

Lion gets go-ahead to use cash to fund prod'n

MGM is on target to emerge from bankruptcy in 30 days.

At a hearing Thursday in federal bankruptcy court in Manhattan, Judge Stuart Bernstein set Dec. 2 as the date for MGM to seek final approval of its reorganization plan.

Attorney Jay Goffman, who is handling the case for MGM, told Daily Variety after the hearing, “We expect to confirm on Dec. 2. All of our first-day motions were granted today.”

MGM was also granted interim permission by Bernstein to use cash collateral of lenders as it reorganizes so that it can pay employees and continue operating during the bankruptcy.

The hearing took place a day after MGM filed for Chapter 11 bankruptcy protection with a pre-packaged plan that it said could move through the court in as few as 30 days. The plan has the support of Carl Icahn, who owns about 18% of the debt and who will receive authority to appoint one of the nine directors on the new board.

“It is a fully consensual pre-pack,” Goffman said Thursday.

Goffman said in court that the Chapter 11 plan will eliminate $5 billion in debt by converting a loan through J.P. Morgan into the new stock in the reorganized company. The plan wipes out the equity from the $5 billion acquisition of the studio in 2005 by a consortium led by Sony Corp.

The proposal leaves Spyglass Entertainment toppers Gary Barber and Roger Birnbaum in charge once MGM emerges from bankruptcy with a holding of less than 1% in the new MGM. The studio said Wednesday that it expects to raise approximately $500 million in financing to fund operations, including production of a new slate of films and television series.

Three weeks ago, Icahn had backed a rival plan to merge MGM and Lionsgate, but he agreed this week to back MGM management’s plan.

The studio was put up for sale a year ago but the bids it drew, including a $1.5 billion offer from Time Warner, weren’t high enough to satisfy the creditors. MGM’s assets include the James Bond franchise and a half interest in “The Hobbit” films, its name and logo, the United Artists operations, a library with more than 4,000 titles and a bare-bones film and TV operation.

Popular on Variety

More Film

  • Collective for Webstory

    Venice: Cinephil Takes World Sales on HBO-produced Doc 'Collective,' also in Toronto (EXCLUSIVE)

    Tel Aviv-based sales agent Cinephil has taken world sales on Emmy Award-winning director Alexander Nanau’s “Collective,” an investigation into the tragic 2015 fire in a Bucharest night club, fallout from which toppled Romania’s government. The high-profile doc is screening in Venice and Toronto. Co-produced by Nanau with HBO Europe and Romania’s Samsa Film — and [...]

  • Donald Sutherland Honorary Oscar

    Donald Sutherland to Receive San Sebastian Donostia Award

    MADRID — The San Sebastian Festival has announced the third and final recipient of this year’s Donostia career achievement awards, Canadian actor Donald Sutherland. He will accept his award before the screening of his latest film, Guiseppe Capotondi’s “The Burnt Orange Heresy.” With more than 200 credited performances over the past half-century, Sutherland stands tall, [...]

  • "Weathering With You" directed by Makoto

    'Weathering With You' Hit Anime Selected as Japan’s Oscars Contender

    “Weathering with You,” the hit animation by Makoto Shinkai, has been selected as Japan’s contender for a the International Feature Film Awards at the Oscars, the Japan Motion Picture Producers Association(Eiren) announced on Monday. As of Wednesday last week, “Weathering” had grossed more than $94 million in Japanese theaters. The film is the first animated [...]

  • (from left) Luke Hobbs (Dwayne Johnson)

    China Box Office: 'Hobbs & Shaw' Roars to Top With $101 Million Debut

    Revving up against a line-up completely devoid of serious competitors, “Fast & Furious Presents: Hobbs & Shaw” roared to the top of China’s box office with a $101 million debut, figures from consultancy Artisan Gateway show — more than four times the haul of the weekend’s second highest grossing title. China is one of the [...]

  • El Principe

    First Look: Trailer for Venice Critics' Week Prison Drama 'El Principe' (EXCLUSIVE)

    “How did you end up in here?” an older inmate asks Jaime, a young man who unexpectedly finds himself in prison. The answer: He killed his best friend. “El Principe” is Chilean director Sebastián Muñoz’s debut feature and has its world premiere in the Critics’ Week section at the Venice Film Festival. Set in Chile [...]

More From Our Brands

Access exclusive content