Studio emerges with $500 million in exit funding
Metro-Goldwyn-Mayer has emerged from bankruptcy protection, the studio announced on Monday.
Its exit from Chapter 11 means that Spyglass chiefs Gary Barber and Roger Birnbaum will assume leadership immediately as co-chairmen and chief executive officers.
The company has lined up $500 million in exit funding, which it will use to keep the studio running and to help fund its part of production on "The Hobbit."
JPMorgan arranged the funding.
“MGM is emerging from one of the most challenging periods of its storied history. We are honored and inspired at the opportunity 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,” Barber and Birnbaum said in a statement.
As part of its pre-approved bankruptcy plan, MGM's secured lenders exchanged approximately $5 billion, in debt and interest, for equity in the company.
Also as part of that plan, the studio implemented a round of lay-offs last Friday. MGM let go between 45 to 50 people from its theatrical marketing, distribution, and post-production departments.
MGM has been on the auction block for much of the past year, while it labored under billions of dollars in debt. Its precarious financial status put the future of such lucrative franchises as the James Bond films in jeopardy.
Last October, armed with the support of debt-holder Carl Icahn, Barber and Birnbaum were able to beat back an eleventh hour merger proposal by Lionsgate to earn creditors' support for their takeover plan.