MGM Restructuring Plan Takes Effect, $500 Million in Financing in Place

Roger Birnbaum(L) and Gary Barber.
Roger Birnbaum(L) and Gary Barber.
 

UPDATED

MGM on Monday said it has emerged from bankruptcy with $500 million to run its rejuvenated business.

At the helm are Spyglass Entertainment founders Gary Barber and Roger Birnbaum, who are running things at MGM as of Monday as co-chairmen and co-CEOs. They own a combined 1% of the new MGM and remain non-operational owners of Spyglass.

The rest of MGM will be owned by a slew of entities that swapped about $5 billion in debt for various amounts of equity in the revamped company. Owning the biggest chunk is billionaire financier Carl Icahn, who also has a large stake in Lionsgate.

Stephen Cooper, the corporate turnaround specialist who has been MGM's CEO for the past 16 months, has left the company as expected.

Cooper's prepackaged reorganization plan was approved Dec. 2. It included former owners Sony, Comcast and a host of investment firms losing all equity in the 86-year-old studio.

MGM emerges from bankruptcy not only with $500 million in exit financing to spend, but also with a library of 4,100 TV and movie titles and such franchises as James Bond, Rocky, Pink Panther, Robocop and The Hobbit. It retains the iconic Leo the Lion mascot as well.

Barber and Birnbaum were unavailable Monday, but the two issued a statement that read, in part, "Beginning today, MGM is a stronger, more competitive company, with a solid financial foundation and a bright future."

Decisions as to when the two will hire a film chief and which studio they might choose as a distribution partner will be made later.

MGM intends on making as many as six films a year, with the first one -- perhaps Part 1 of The Hobbit with partner Warner Bros. -- due out in 2012.

MGM also is beginning new discussions with Danjaq and the family of Albert Broccoli concerning the next movie in the Bond series.

MGM laid off 50 employees last week, and the company is expected to shed another 30 before settling in with a staff of about 320.

"MGM is emerging from one of the most challenging periods of its storied history, " Barber and Birnbaum said in their statement. "We are honored and inspired at the opportunity of leading one of Hollywood's most iconic studios into its next generation of unforgettable filmmaking, global television production and distribution and aggressively pursuing, developing and exploiting new digital platforms."

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