Metro-Goldwyn-Mayer says it has begun seeking its creditors' approval on a pre-packaged bankruptcy plan in which it will exchange more than $4 billion in debt for equity in a new company that has rights to the James Bond franchise and the upcoming two-part movie series The Hobbit.
Privately held production companySpyglass Entertainment, a co-financier of such recent films as Star Trek and G.I. Joe: Rise of Cobra, will contribute some assets and merge two subsidiaries into MGM for a 4.69 per cent stake in the company, according to the plan.
Creditors would hold 95.3 per cent of the company after it exits from bankruptcy.
Only approved holders of secured debt as of October 4 will be allowed to vote. Major creditors include Anchorage Advisers LLC, Highland Capital Management LP and billionaire investor Carl Icahn.
Voting continues until October 22, when the company plans to file for bankruptcy and exit the court process in about 30 days.
The move clears the way for production to begin on The Hobbit, the two-part movie based on J.R.R. Tolkien's novel, which MGM is set to make with Time Warner Inc's Warner Bros. The release of the first instalment had been slated for December 2012 but the movie still hasn't got the official "green light" to begin shooting.
