×
You will be redirected back to your article in seconds

MGM creditors approve Spyglass plan

Icahn to have strong say in revamped studio

MGM’s debtholders have overwhelmingly approved a plan to reorganize the hobbled studio through a prepackaged bankruptcy that will leave Spyglass Entertainment toppers in charge — and give Carl Icahn a strong say in the revamped Lion.

MGM issued a brief statement late Friday afternoon confirming that the lenders had backed management’s reorganization plan.

“MGM will now move expeditiously to implement that Plan, which will dramatically reduce its debt load and put the Company in a strong position to execute its business strategy,” the statement said. “MGM is appreciative of the lenders’ support.”

But the plan’s been altered significantly from what had been proposed three weeks ago, several sources close to the situation said. Icahn, who holds over 10% of MGM’s debt, backed a revised reorganization that guarantees him a seat on the MGM board, removes Spyglass library from the deal and significantly reduced the Spyglass stake from the 5% level.

It’s expected that the storied studio — now a shell of its former self with $4 billion in debt — will file for bankruptcy shortly. It will probably take about 30 days to complete that process, after which Spyglass principals Gary Barber and Roger Birnbaum will be in charge of an MGM that will produce a slim slate of films while beefing up its TV operations.

The plan wipes out the equity in the company from the 2005 buyout of MGM from Kirk Kerkorian. Lionsgate and Icahn had joined forces in offering a rival plan that would give debtholders 55% of the combined company in a deal valued at about $1.8 billion in stock and debt.

Given that Icahn’s the largest Lionsgate shareholder with 33%, speculation’s likely to emerge that the billionaire takeover artist will continue to push for an MGM-Lionsgate combination.

MGM’s seventh forebearance on debt payments was due to expire Friday but approval of the reorganization plan by the debtors eliminates that obligation.

The new MGM will be a debt-free operation that will put much greater emphasis on developing programming — scripted and reality — for cable TV, sources familiar with planning for the Lion said (Daily Variety, Sept. 9).

The studio was put up for sale a year ago but failed to draw bids that were high enough to satisfy the creditors, including a $1.5 billion offer from Time Warner. MGM’s assets include the James Bond franchise and half of “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

  • China's Phoenix Entertainment Buys Italian Comedy-Drama

    China's Phoenix Entertainment Buys Italian Body-Positivity Comedy 'Sweeties'

    Chinese distributor Phoenix Entertainment Group has bought all China rights to the Italian comedic drama “The Sweeties” from Germany-based Media Luna New Films. The movie is the second feature from director Francesco Ghiaccio and stars Valeria Solarino, Vinicio Marchioni and four young newcomers in their acting debut. It deals with issues of bullying and body-shaming [...]

  • The Upside TIFF

    'The Upside' Poised for China Theatrical Release

    “The Upside,” a 2017 American remake of the 2011 hit French drama “The Intouchables,” will get a China release on Nov. 22. The film was directed by Neil Burger and stars Nicole Kidman, Kevin Hart and Bryan Cranston. It tells the story of an unlikely friendship that forms between a rich quadriplegic and the struggling [...]

  • Editorial use only. No book cover

    Virginia Leith, Female Lead in Stanley Kubrick's First Film, Dies at 94

    Actress and model Virginia Leith, who starred in Stanley Kubrick’s first film “Fear and Desire,” which he later disavowed, has died. She was 94. According to family spokesperson Jane Chalmers, Leith died after a brief illness at her home in Palm Springs, Calif. on Nov. 4. Born on Oct. 15, 1925, Leith met Kubrick in [...]

  • Sarah Bolger's 'A Good Woman Is

    Film News Roundup: Sarah Bolger's 'A Good Woman Is Hard to Find' Bought by Film Movement

    In today’s film news roundup, “A Good Woman Is Hard to Find” and “After Parkland” find homes, Jack Johnson is honored, AGC closes deals on Neill Blomkamp’s latest and Paramount is in talks for a “Power to the People” project. ACQUISITIONS Film Movement has bought North American rights to the thriller “A Good Woman Is [...]

  • Sir Lionel Frost (left) voiced by

    Chris Butler Looks At The Magic Behind Animating 'Missing Link'

    Laika’s latest feature “Missing Link” raises the bar once again for the world of stop-motion, pushing boundaries in scope and visuals. The story of an unlikely friendship between Mr. Frost and his 8-foot yeti buddy Link is one of hope. “Missing Link” producer Arianne Sutner says the message of the film was to “leave people [...]

  • Jonah Hauer-King Prince Eric

    'Little Mermaid' Live-Action Movie Finds Its Prince Eric

    Jonah Hauer-King will soon be a part of the “Little Mermaid” world. The newcomer has been tapped to play Prince Eric in Disney’s live-action remake of the animated classic. At one point, Harry Styles was is in early talks for the role, but ended up passing. Hauer-King has had two screen tests, with the most [...]

  • Peter Caranicas

    Variety's Peter Caranicas to Receive 1st HPA Legacy Award

    Peter Caranicas Variety managing editor, features, will be honored with the first HPA Legacy Award. Caranicas joined Variety as features managing editor in 2008, and currently serves as both deputy editor and managing editor, features. He has developed the editorial franchises Dealmakers Impact Report, Hollywood’s New Leaders, Legal Impact Report and Business Managers Elite. Caranicas also [...]

More From Our Brands

Access exclusive content