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MGM Starts Pre-Packaged Chapter 11; Claims Carl Icahn Now Supports Plan

LOS ANGELES, CA, November 3, 2010 – Metro-Goldwyn-Mayer Inc. (“MGM”) today announced that it and approximately 160 of its affiliates have filed Chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of New York (the “Court”) to seek confirmation of their “pre-packaged” plan of reorganization (“Plan”). MGM has sufficient cash on hand, and the consent of its lenders to use this cash, to fund normal business operations throughout the Chapter 11 process. MGM has filed “first-day” motions seeking immediate Court approval to continue paying its employees, vendors, participants, guilds and licensors in the ordinary course of business during the entire Chapter 11 process, for both pre-petition and post-petition obligations. MGM anticipates that the Plan will be confirmed by the Court in approximately 30 days.

As previously announced on October 29, 2010, MGM’s secured lenders, voting in the Company’s solicitation process, overwhelmingly approved the proposed plan of reorganization. After considering a range of strategic alternatives over the course of the last 15 months, MGM and its secured lenders determined this plan will allow the Company to emerge as a stable enterprise with new leadership at the helm to move MGM forward.

The Plan provides for the Company’s secured lenders to exchange more than $4 billion in outstanding debt for most of the equity in MGM upon its emergence from Chapter 11.

Following the receipt of the requisite consents from its lenders for the Plan, the Company and certain significant consenting

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MGM Crowns Spyglass Partners Gary Barber And Roger Birnbaum New CEOs

Mike Fleming

2ND UPDATE: MGM has just confirmed Deadline’s report that it has formally named Spyglass partners Gary Barber and Roger Birnbaum its new chairmen/CEOs, and the studio has just issued a press release describing its reorganization effort. It appears below. What isn’t answered is whether MGM will be revived as an entity that strips off its distribution and marketing arms, and makes a distribution deal for product that will include the next installment of James Bond. Deadline was first to tell you on June 29 that the reorganization plan called for MGM to reemerge as a production facility. The advantage is saving money on manpower and other costs, but eventually some of that would be wiped out by having to pay a distribution fee to someone else. What is clear is that the recent MGM developments put Mary Parent one step closer to the exit, and already, rumors are making the rounds of where she will land a production deal. I called the offices of Birnbaum and Barber but was told they are prohibited from commenting at this point.

UPDATE: I’m told that MGM will shortly announce Gary Barber and Roger Birnbaum as its new co-chairmen/CEOs, effective once MGM emerges from Chapter 11. They don’t officially take office until MGM emerges from bankruptcy. This is part of the long expected restructuring plan, as MGM brass has begun to solicit votes from lenders to convert 100% of the … Read More »

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