MGM files for bankruptcy

Hollywood Studio MGM has filed for bankruptcy, rejecting takeover approach from mini-major Lionsgate. The company, which produces and distributes movies and TV series as well as operating numerous branded channels around the world, filed for Chapter 11 bankruptcy protection in a New York court yesterday.

It hopes to emerge from bankruptcy within 30 days in a new form, with major creditors exchanging about US$4 billion (€2.8 billion) in debt for major ownership stakes and the company being run by Gary Barber and Roger Birnbaum, the founders of Spyglass Entertainment. They will serve as co-CEOs post restructuring.

In a joint statement they said: “MGM is emerging from one of the most challenging periods of its storied history. We are honoured and inspired at the prospect of leading one of Hollywood’s most iconic studios into its next generation of unforgettable filmmaking, global television production and distribution, and aggressively pursuing, developing and exploiting new digital entertainment platforms.”

MGM said it had sufficient cash on hand to operate through the Chapter 11 period and that, post restructuring, it hoped to raise US$500 million in financing to fund its operations, including a new slate of TV series and movies.