Judge Confirms Metro-Goldwyn Mayer's Bankruptcy Exit Plan
03 12월 2010 - 2:42AM
Dow Jones News
A judge on Thursday confirmed Metro-Goldwyn Mayer Inc.'s plan to
exit bankruptcy in the hands of its creditors, less than 30 days
after the movie studio filed prepackaged Chapter 11 restructuring
proposal in New York.
Judge Stuart M. Bernstein of U.S. Bankruptcy in Manhattan
approved a plan that calls for creditors to forgive roughly $4
billion in debt in exchange for equity in the restructured MGM.
Bernstein said the plan satisfied the elements of the bankruptcy
code and should be confirmed.
Because MGM's plan had overwhelming support of creditors, the
hearing was essentially a formality, combining a hearing on the
adequacy of the company's disclosure statement--or plain language
reading of a bankruptcy plan--with a hearing on the confirmation
plan itself.
Spyglass Entertainment co-founders Gary Barber and Roger
Birnbaum will run the company when it exits Chapter 11, which the
company hopes will be "in a couple of weeks," according to Jay M.
Goffman of Skadden Arps Slate Meagher & Flom LLP, a lawyer for
MGM.
Goffman told Dow Jones after the hearing that MGM just needs to
finalize its credit facility, and then will be set to exit
bankruptcy.
MGM plans to raise about $500 million for new films and projects
upon exiting bankruptcy, and will retain all its assets. Bernstein
approved that financing, in which J.P. Morgan Chase & Co. (JPM)
will act as the arranger and bookrunner, at a hearing last
month.
The movie studio filed its long-awaited bankruptcy on Nov. 3
after satisfying the concerns of dissident creditor Carl Icahn, who
as part of an agreement will select one of the nine members for
MGM's new board of directors. Bernstein also approved the Icahn
board seat last month.
Icahn had tried to buy other creditors' debt at a premium in
exchange for their assurance they'd vote against the plan.
Spyglass also agreed to keep separate from MGM a collection of
older films that Icahn had called overvalued. The deal, if
consummated, would have given Spyglass a larger stake in MGM.
(Dow Jones Daily Bankruptcy Review covers news about distressed
companies and those under bankruptcy protection.)
-By Joseph Checkler; Dow Jones Newswires; 212-416-2152;
joseph.checkler@dowjones.com
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