MGM in bankruptcy protection move

Image caption, Will MGM's lion roar back to profit?

Hollywood's MGM studio has filed for Chapter 11 bankruptcy protection in a move pre-agreed with major creditors.

It is expected that the "pre-pack" bankruptcy will last only 30 days.

Under the deal, major lenders JP Morgan and Credit Suisse will swap $4bn (£2.5bn) of loans for a majority of the company's equity.

It follows a vote last week by MGM's creditors to hand control of the company to Spyglass Entertainments once the bankruptcy is complete.

Rejected suitor

Spyglass has produced a number of films, including Get Him To The Greek, the most recent Star Trek movie, and Clint Eastwood's latest, Invictus.

MGM's creditors - who include billionaire Carl Icahn - rejected a separate takeover bid from another Hollywood firm, Lionsgate.

The losing firm is now suing Mr Icahn for allegedly misleading its shareholders and interfering in its takeover plans.

Mr Icahn had initially supported Lionsgate's bid, but last week, he gave his backing to Spyglass instead.

He said that under the deal, MGM would change its corporate governance structure - which would include giving him the right to appoint a director to MGM's board.

MGM's move follows months of financial deadlock which has left several film projects on hold.

In April, work on the 23rd film in the James Bond franchise was suspended because of uncertainty over MGM's future.

The British production company behind the project said at the time that the film was on hold "indefinitely".

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