Bankruptcy Court Approves MGM's $500M Exit Loan

Court says Spyglass chiefs get $4 million if their agreement to take over studio is breached

Metro-Goldwyn-Mayer announced that Friday that it had received permission to take out a $500 million exit loan form U.S. Bankruptcy Court.

The loan will be used to keep the studio running as it enters into a prepackaged bankruptcy. More importantly, it will allow MGM to move forward on two big ticket productions, "The Hobbit" and the next James Bond film.

MGM also received approval for ts motion to keep the fees it pays on that loan confidential.

MGM's creditors approved a plan last month that will see the studio enter Chapter 11 and will shift leadership to Spyglass chiefs Gary Barber and Roger Birnbaum. MGM has been struggling under $4 billion of debt for much of the past year.

The court also approved a motion guaranteeing a break-up fee motion that stipulates that Spyglass will receive $4 million if it agreement with MGM is breached.

A confirmation hearing on the prepackaged plan is scheduled for Dec. 2.