MGM announces plan confirmation; effectiveness expected by year-end

By Lisa Kerner

Charlotte, N.C., Dec. 2 - Metro-Goldwyn-Mayer Inc.'s amended plan of reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of New York, according to a company news release.

"By dramatically reducing MGM's debt load and providing MGM with access to new capital, the reorganization plan the court confirmed today will enable MGM to emerge from this process with a solid financial foundation and will position MGM to be a successful studio going forward," said co-chief executive officer Stephen Cooper.

MGM said it expects the plan to become effective by mid-December, once the conditions of effectiveness have been met.

Upon emergence, MGM's secured lenders will exchange about $5 billion, including accrued interest and fees, for most of the equity in MGM.

The company will be led by Gary Barber and Roger Birnbaum, who will serve as co-chairman and chief executive officers of MGM Inc.

As previously reported, treatment of creditors will include:

• Holders of administrative claims, priority tax claims and non-tax priority claims will be paid in full in cash;

• Other secured claims will either be reinstated, holders will be paid in full in cash or will receive the collateral securing the claim;

• Holders of credit agreement claims will receive a share of 99.46% of the new common stock in the reorganized company;

• P&A facility claims will be reinstated;

• Holders of general unsecured claims will be paid in full in cash;

• Interests in subsidiary debtors will be reinstated; and

• Holders of holding company interests will receive no distribution.

MGM, a Los Angeles-based motion picture, television, home video and theatrical production and distribution company, filed for bankruptcy on Nov. 3. The Chapter 11 case number is 10-15774.

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