MGM Rallies Support for Reorganization Plan

LOS ANGELES: MGM is soliciting support from its secured lenders for a reorganization plan that would see Spyglass Entertainment’s Gary Barber and Roger Birnbaum running the studio after it emerges from a Chapter 11 bankruptcy filing.

MGM expects to continue normal business operations throughout the restructuring process. The proposed plan calls for MGM’s more than $4 billion in outstanding debt to be swapped for approximately 95.3 percent of equity in upon its emergence from Chapter 11. Spyglass Entertainment would contribute certain assets to the reorganized company in exchange for approximately 0.52 percent. In addition, two entities owned by Spyglass affiliates, Cypress Entertainment Group and Garoge, will merge with and into a subsidiary of MGM, with the MGM subsidiary as the surviving entity. The stockholders of Cypress and Garoge will receive approximately 4.17 percent of the reorganized company. Gary Barber and Roger Birnbaum, co-chairmen and CEOs of Spyglass Entertainment, would take on the same roles at MGM.

The deadline for the company’s secured lenders to vote on the plan is October 22, 2010.