MGM files for bankruptcy

By Julianne Pepitone, staff reporter


NEW YORK (CNNMoney.com) -- MGM has filed for Chapter 11 bankruptcy protection as part of a "pre-packaged" plan with creditors, the movie studio said Wednesday.

In court papers filed in New York, the movie studio behind "Rocky:" and the James Bond movies said its bankruptcy should last only about 30 days.

Under the terms of the deal, major lenders Credit Suisse and JPMorgan (JPM, Fortune 500) will exchange $4 billion in outstanding debt for most of MGM's equity when it emerges from Chapter 11 protection.

MGM will then be transferred to the control of Gary Barber and Roger Birnbaum, who run the movie company Spyglass Entertainment.

MGM has also agreed to a deal with Carl Icahn, one of its largest shareholders, in exchange for the billionaire investor's support in its restructuring. Icahn had previously pushed for MGM to merge with another studio, Lions Gate Entertainment.

In a prepared statement, MGM executives said the studio "is emerging from one of the most challenging periods of its storied history."

The company said it expects to raise $500 million after emerging from bankruptcy to finance projects including the production of films and TV series. To top of page

Just the hot list include
Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 25,669.32 110.59 0.43%
Nasdaq 7,816.33 9.81 0.13%
S&P 500 2,850.13 9.44 0.33%
Treasuries 2.87 0.00 0.07%
Data as of 10:22am ET
Company Price Change % Change
Advanced Micro Devic... 19.77 0.44 2.28%
Applied Materials In... 43.77 -3.66 -7.72%
General Electric Co 12.30 0.00 0.00%
Bank of America Corp... 30.74 0.02 0.07%
Apple Inc 217.58 4.26 2.00%
Data as of Aug 17
Sponsors

Sections

The median pay for chief executives of the 100 most valuable companies on the London Stock Exchange increased 11% last year to £3.9 million ($5 million). Workers got a 2% hike. More