MGM on the verge of bankruptcy
It’s hard out there for an 85 year old studio. MGM, one of the most iconic Hollywood studios is nearing bankruptcy and is asking for help. The struggling studio has asked its bondholders for about $20 million in short term cash for overhead costs and another $150 million to see them through the year and to begin production on THE HOBBIT.
First Showing reports that bondholders are planning to let the failing studio, which has over $3.5 billion dollars in debt, go bankrupt. The leadership of Harry Sloan is on of the reasons cited as one of the reasons for the decline of the studio.
“They’re not happy that [Harry] Sloan let the company go in this direction but they understand what’s going on. It’s unfortunate, but they get it that the company is in a distressed situation, and they have to figure out an action plan moving forward,” a source explains to me.
If MGM does go bankrupt, it would lose the rights to highly sought after properties like James Bond. Stephen F. Cooper, a restructuring specialist says, “the studio doesn’t think it can stay alive without 007.” Bankruptcy could also pose a threat to the production of THE HOBBIT, whose primary funding source is the studio.
MGM released THE PINK PANTHER 2 earlier this year, and this weekend sees the release of FAME. We’ll keep you posted as this story develops.
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