Metro-Goldwyn-Mayer, the beleaguered film studio, filed for bankruptcy protection on Wednesday as part of a reorganization plan that would help it shed more than $4 billion in debt and hand control over to a group of hedge fund creditors.
MGM, which filed in the Southern District of New York, is planning a prepackaged bankruptcy case, meant to shorten its stay in Chapter 11 protection. The film studio expects to win confirmation of its reorganization plan in about 30 days.
MGM added that it and its largest creditors had reached a settlement with the investor Carl C. Icahn, in which the company would limit the role of the executives from Spyglass Entertainment who will run the studio. Mr. Icahn will have one seat on the board of a reorganized MGM, bankruptcy certification.
Mr. Icahn had mounted a challenge to MGM’s reorganization, offering to buy out smaller creditors in an attempt to thwart the vote on the plan. The company needed the support of investors representing about two-thirds of its debt and more than half of its individual creditors to approve the prepackaged bankruptcy plan.
The company said last week that it had the overwhelming support of its creditors, who were being led by JPMorgan Chase and two hedge funds, Anchorage Advisors and Highland Capital Management.
The bankruptcy plan will wipe out the studio’s current owners, a group of investors that includes the buyout firms Providence Equity Partners, TPG Capital and the Quadrangle Group, as well as Sony and Comcast. The consortium took MGM private in 2005 in a deal that saddled the studio with an overwhelming debt burden.
MGM said it had enough cash on hand to support itself throughout its bankruptcy case, and that it planned to borrow about $500 million to finance its operations once it emerged from Chapter 11.
The firm is being advised by Moelis & Company, the law firms Skadden, Arps, Slate, Meagher & Flom and Klee, Tuchin, Bogdanoff & Stern, and the consulting firm Zolfo Cooper. Stephen Cooper, the restructuring veteran, has been a member of MGM’s top management team for months.
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