If the word coming out of Hollywood this evening is correct, we are about to lose a huge piece of cinematic history. MGM, which boasts one of the best known logos in the entertainment business and a library of some 4,000 films, could be placed on the auction block due to its massive $3.7 billion debt.
What that means for the three MGM horror projects we’ve been reporting on this year — Joss Whedon’s Cabin in the Woods ( currently delayed to Feb., 2011), Vadim Perelman’s Poltergist redux (slated for Nov., 2010), and Juan Carlos Fresnadillo’s reboot of Roger Corman’s classic X: The Man With the X-ray Eyes (which we’ve heard nothing about since March) — is, of course, up in the air, as it just about everything else involving the studio right now.
Here’s what is known, per Variety:
A major, such as Time Warner, could buy the MGM-UA library while another entity might acquire the logo, and yet another deal could be made for United Artists. Sources speculated that Kirk Kerkorian, who has already bought and sold MGM twice, might buy the logo once again.
Last summer Harry Sloan was bounced as MGM’s CEO, and Stephen Cooper, a specialist in restructuring companies started meeting with bankers … There was speculation that the combined assets of MGM may now yield as little as $1.5 billion in the present market.
The various equity owners of MGM, including several private equity firms, have already written down their $5 billion acquisition, which closed in 2004.
Any sort of auction would need approval of a two-thirds majority of the bondholders, and a couple of the bondholders insist they have not been contacted as yet. Some sources believe a pre-packaged bankruptcy is an option, and there is still an expectation that Time-Warner might make a last eleventh hour bid.
Neither Cooper nor MGM would comment.
Talk about the end of an era!
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