Was Carl Icahn looking out for the best interests of those holding $4 billion in Metro Goldwyn Mayer debt? Or was he looking out for his own?
MGM claims it's the latter, and is now suing the investor for pushing a last-minute plan to take over the studio, delaying the agreement MGM had already made with its creditors that would give them ownership stakes in a new MGM emerged from bankruptcy, with the people from Spyglass Entertainment.
The move is set to help get MGM back on the right foot. The studio, responsible for the "Stargate: Universe" series on Syfy as well as the on-hold direct-to-DVD movies from the "Stargate SG-1" and "Stargate: Atlantis" series, has been saddled with so much debt it can barely produce new products for the silver screen and television sets.
SGU, which is now in its second season on Syfy, has remained in production through the studio's unsuccessful efforts to find a buyer and eliminate its mounting debt, but other projects like the next James Bond film and even "The Hobbit" movies have had production schedules grind to a halt. (That is, until all the production companies announced in October that filming on "The Hobbit" would indeed begin early next year).
Creditors approved MGM's deal with Spyglass to give those who are owed money ownership in MGM in lieu of the debt they hold, and allow Spyglass to run the show. It would virtually erase all of MGM's debt, and allow it to once again put money toward television and movie production, and help move some of its existing library.
That means MGM will have to enter Chapter 11 bankruptcy reorganization, which will allow a judge to approve the plan and help MGM create the new ownership structure with little trouble, which should be complete by mid next year.
In the meantime, MGM wants to slap Icahn's wrists after he attempted to take over MGM himself. However, the studio says he never really intended to snatch up the network, and instead claim in a new lawsuit that Icahn was simply looking to buy more time so that he could acquire more of the debt MGM carried -- thus increasing his own ownership stake in the company, according to the Wall Street Journal. In fact, Icahn now owns about $500 million of MGM's debt, which would give him a sizable stake in the new company.
The financial issues plaguing MGM had taken a toll on shows such as SGU, which feared it could be an asset traded to another company in order to pay off MGM's debt. However, with the new deal, the Stargate franchise looks to be remaining with MGM, and its fate will be decided by ratings on Syfy and not MGM's financial position.
"Stargate: Universe" airs Tuesdays at 9 p.m. ET on Syfy.
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