MGM Insider: Optimism Ahead of Thursday's Confirmation Hearing
MGM should advance its reorganization plan further Thursday, assuming a confirmation hearing goes well in U.S. Bankruptcy Court in New York.
But Judge Stuart Bernstein isn't expected to rule on the plan for up to two weeks afterward. For now, MGM brass and their attorneys know the period for filing objections to the plan has passed without further carping, and MGM's more than 100 lenders have already signed off on the pact.
Bernstein ruled Nov. 12 that no further lenders vote will be necessary despite some last-minute tweaking of terms before the reorganization plan being filed Nov. 3. That was necessitated after major MGM debtholder Carl Icahn objected to certain plan provisions.
Under its terms, Spyglass Entertainment's Gary Barber and Roger Birnbaum will be named co-CEOs of MGM, and the Lion's previous owners will see their stakes wiped out. Those in the latter group include Providence Equity, TPG Capital, Sony, Comcast, DLJ Merchant and Quadrangle.
An MGM insider said Wednesday there was broad optimism ahead of the confirmation hearing.
"MGM won't emerge from the bankruptcy right away after the hearing," the source said. "It's looking to be pretty much by-the-numbers, but you never know if the judge will say go back and do this or do that. And all of that will take another two weeks or so."
MGM has been searching for more than a year for a way of dealing with its crushing $4 billion debt load. The proposed reorganization plan would convert that debt to lender equity.