With no buyers in sight and some $4 billion in debt weighing it down, Metro-Goldwyn-Mayer Studios Inc. -- which among other properties, has a stake in productions like "Stargate: Universe" and the upcoming Lord of the Rings prequel "The Hobbit" -- has finally decided to straighten things out in front of a bankruptcy judge.
MGM is expected to file for Chapter 11 bankruptcy reorganization by the end of the month after it receives approval to do so from more than 100 of its creditors. Under a proposed plan reported by BBC News, the creditors will own 95 percent of MGM following the restructuring, with Spyglass Entertainment -- which co-produced "Star Trek" and "G.I. Joe: Rise of Cobra" last year -- owning the remaining 5 percent.
While bankruptcy is never what anyone wants to hear, making the move could actually save the studio, and allow it to get back into the full-time production business again. Because of its heavy debt and low revenues, MGM's production schedule has been in limbo. The next James Bond film starring Daniel Craig was put on hold, while "The Hobbit" films have been swimming in filmmaking purgatory.
With a reorganization approved by a bankruptcy judge, creditors will try to recoup money either by selling off assets like James Bond and Stargate, or by allowing MGM to once again produce film and television shows, collecting the profits along the way.
Spyglass appears to be the ultimate winner in the merry-go-round of studios and companies interested in buying MGM, but later passing because the price was too high for the amount of debt they were taking on. Although its stake will only be 5 percent, it appears MGM wants that company's management team to be in charge and run the new MGM.
MGM's once dominant stable of television shows has been mostly quiet in recent years. In fact, "Stargate: Universe" -- which just started its second season on Syfy -- is virtually the only show the studio has in production, besides a Pink Panther children's series. It also is involved in the Discovery Channel series "Cash Cab."
Creditors still have to approve of the plan, and have until Oct. 22 to do so. If they are on board, MGM will file with federal bankruptcy court, and could have a plan approved quickly, possibly coming out of bankruptcy by mid next year.
In the meantime, MGM will run "business as usual," which means not much of anything. However, SGU is not expected to be affected.
To take a look at what will happen on "Stargate: Universe" next week on Syfy, take a look at this sneak peek.
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