So the bondhholders said to MGM, in essence, that they were going to let the studio go bankrupt and collect their money since they'd be first in line to get paid. But Cooper explained that this would be the worst possible outcome for the creditors and the company. Because if MGM were forced into bankruptcy, then it would lose James Bond and the studio doesn't think it can stay alive without 007. Also, a lot of other issues would surface that would tremendously hurt MGM.
Also, if MGM goes through bankruptcy, that's a very expensive prospect (where only the lawyers get rich), and extremely disruptive (since who would do business with MGM in the interim) and won’t get the creditors what they want which is their money back. It's more than simply MGM losing Bond. The studio could lose a lot of other franchises.
Friday, September 25, 2009
MGM On The Verge Of Bankruptcy
The THR blog deadline is reporting that MGM is struggling to to stay out of bankruptcy by the end of the year end of year. In a meeting it proposed it needs $20M in short-term cash flow to cover overhead, and an additional $150 million to stay out of bankruptcy. The studio fears it will loose the rights to the James Bond franchise and may delay The Hobbit.