MGM battling bondholders and bankruptcy; James Bond in limbo
The bad news continues for the debt-laden MGM Studios—home of the James Bond films.
According to new updates at Deadline Hollywood Daily, the studio has made a conference call plea with its ‘very loud and very upset’ bondholders in order to try and stave off the threat of bankruptcy.
The studio, which carries a burdening $3.7 billion in debt, is trying to work out a deal with the creditors to waive interest payments until February 2010. The company is in desperate need of $20 million in short-term cash flow to cover overhead, and an additional $150 million to get through the end of year and continue funding its projects, and to further start Peter Jackson’s The Hobbit (not having to make payments immediately provides the studio with some much-needed money to back their film production slate).
Several bondholders have threatened that they will let the studio fall into bankruptcy, since they would then be first in line to eventually get paid.
On the other hand, it is being argued by investment bankers that the immediate sale of MGM wouldn’t fetch more than $1.5 billion to $1.75 billion at auction—meaning that the bondholders would recover less than $.50 on the dollar.
Either way, bankruptcy would almost certainly mean the loss of the lucrative James Bond series, the crown jewel in MGM’s film catalogue, among many other film franchises.
Time will tell to see how things work out for the troubled studio. CommanderBond.net will keep you updated with all of the latest details.