8 October 2010 Last updated at 05:44 ET

James Bond film studio MGM announces bankruptcy plan

MGM has struggled under heavy debts in recent years

Hollywood film studio Metro Goldwyn Mayer has begun plans to file for bankruptcy protection in an effort to rid itself of $4bn (£2.5bn) of debts.

The company behind the James Bond films wants more than 100 of its creditors to agree plans to enter chapter 11 bankruptcy while it restructures.

Creditors will get a 95% stake in the company as part of the deal.

Chapter 11 allows MGM to operate as normal, but money troubles have held up production of new 007 and Hobbit films.

The bankruptcy plans follow months of speculation over the future of MGM, which has struggled with large debts, a lack of blockbuster film releases, and a downturn in DVD sales.

Earlier this year, the studio put itself up for sale, but failed to find suitable bidders.

As part of the plans, the privately-owned production company Spyglass Entertainment will merge two of its subsidiary businesses into a subsidiary of MGM to create the new MGM company.

Spyglass will then own the remaining 5% of the new business, with its senior management taking charge.

Creditors have until 22 October to approve the plan.