MGM Creditors have overwhelmingly approved a deal put on the table by Spyglass in September. MGM will now enter Chapter 11 bankruptcy proceedings and will emerge with Spyglass heads Gary Barber and Roger Birnbaum at the helm in return for a rumored 5% share of MGM. The remaining 95% will go to the creditors who will swap almost $4 billion in debt for equity ownership in the legendary studio, estimated to now be worth just under $2 billion. The deal puts up a major road block to the plans of Carl Ichan and Lions Gate, who entered a last minute offer to merge with MGM. However, according to Reuters, experts say the activist shareholder could still challenge the deal in bankruptcy court, and an eventual partnership between MGM and Lions Gate remains possible.
Of course, the primary question we’re all interested in is: what does this mean for “The Hobbit”? In this fan’s opinion, the answer is: very little. The movie has been greenlit which means the funds necessary to move forward with production have already been committed. We may never know exactly what shuffling of money and deal-making resulted in those funds becoming available, but. available they are, and the upcoming bankruptcy proceedings shouldn’t come anywhere close to affecting a revenue-making prospect like a major film in progress. Other than that, MGM will emerge as a healthier, better run, company which can only be good news to Hobbit fans everywhere.