It’s been more than a year since the once might MGM studios Inc announced it had debt problems. So far no-one has come forward to rescue this once mighty media empire especially considering a large $400 million bill comes due next moth, and there seems little hope that it will be paid without yet another delay.
That has led trade publication The Hollywood Reporter to speculate that at least one of the film studio’s 100 or so lenders could force it into bankruptcy.
If that happens, there’s no telling what could happen to some of MGM’s Bond key properties, and not just James Bond and “The Hobbit” — but also its Stargate properties like Syfy’s “Stargate: Universe.”
“It’s kind of become a joke,” one unnamed executive told The Hollywood Reporter, who is considering some sort of partnership with MGM. “There is a real fatigue among the lenders after all” the delays — six in all — to pay down $250 million from a revolving loan that is due, along with $200 million in related interested payments.
If another delay isn’t granted, or if any of the lenders get fed up with what’s happening, any of them can file an involuntary bankruptcy petition with the courts to put the fate of MGM in a judge’s hands. Typically, involuntary bankruptcies are hard to push through. But considering the amount of money and the number of lenders involved in the current MGM debacle, it might be easier than anticipated.
But there is a lot of question marks surrounding what would happen to MGM’s assets if a judge were in charge of restructuring. Typically, the best way to pay off debt is through liquidation, meaning the studio’s prized assets like James and Stargate would be auctioned off, or sold through deals with lenders.
Any such restructuring and sale of assets would almost mean certain death for MGM which was founded in 1924, and mean a messy situation would turn into a disaster with key properties like James Bond, “The Hobbit” and Stargate, suffering significantly.