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article imageMetro-Goldwyn-Mayer Studio files for Chapter 11 bankruptcy

By Andrew Moran     Nov 3, 2010 in Business
New York - Golden era Metro-Goldwyn-Mayer Studios has announced that it has filed for Chapter 11 bankruptcy protection as part of a deal with creditors and will last for the next 30 days.
In 1924, entertainment entrepreneur Marcus Loew formed MGM Studios when he he gained control of Louis B. Mayer Picture and Goldwyn Pictures Corporation. From then on, they have distributed motion picture classics such as “12 Angry Men,” “1984,” “Annie Hall,” “Dr. No,” “The Garden of Allah,” “The Great Escape,” “Raging Bull” and so many other great films (of course, many terrible movies).
On Wednesday, the historic movie studio announced that it filed for Chapter 11 bankruptcy protection as part of a plan with creditors that will last for 30 days, according to the BBC News. The court papers were filed in New York.
Credit Suisse and JPMorgan – major lenders to MGM – will exchange $4 billion in outstanding debt for a majority of MGM’s equity following the 30-day Chapter 11 protection. Spyglass Entertainment’s Gary Barber and Roger Birnbaum will then take control of the studio.
It has been more than a year for MGM and its creditors to come up with a reorganization strategy. MGM was offered an acquisition of $1.5 billion by Time Warner but none of its creditors were satisfied with the offers.
In a prepared statement, MGM heads said it expects to raise approximately $500 million after the protection, which will then go into the production of motion pictures and television series, reports CNN Money.
“[The studio] is emerging from one of the most challenging periods of its storied history.”
MGM has only released one picture this year, “Hot Tub Time Machine,” which was a box office disappointment. In the mean time, MGM still has two unreleased films: “Red Dawn” and “The Cabin in the Woods.” “Zookeeper,” starring Kevin James, will be released next summer by Sony Pictures.
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