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MGM Studio Files for Bankruptcy, Icahn Backs Plan

By (Breaking Legal News)

Metro-Goldwyn-Mayer Studios Inc filed for bankruptcy on Wednesday, under a plan that would put one of Hollywood's most storied film studios under the control of its lenders.

The Chapter 11 filing follows a vote by MGM creditors last week to endorse a "prepackaged" bankruptcy that would put MGM under the control of Hollywood executives Gary Barber and Roger Birnbaum, who control the Spyglass Entertainment film company.

MGM also agreed to concessions to Carl Icahn, one of its largest debtholders, to win the billionaire's support for its restructuring.

Icahn had previously supported a rival bid to merge MGM with another studio, Lions Gate Entertainment Corp.

Founded in 1924 and known for its roaring lion logo, MGM controls the James Bond franchise, and has also produced or released many of Hollywood's best-known films, including "The Wizard of Oz" and "Ben-Hur."

Its reorganization would allow secured lenders including Credit Suisse Group AG and JPMorgan Chase & Co to swap more than $4 billion of MGM debt for most of the equity in a reorganized company.

Full post as published by Breaking Legal News on November 03, 2010 (boomark / email).