MGM Bankruptcy news is still coming in, but at the moment we know that Metro-Goldwyn-Mayer Inc. said it has begun seeking its creditors’ approval on a prepackaged bankruptcy plan in which they will exchange more than $4 billion in debt for equity in a new company that has rights to the James Bond franchise and the upcoming two-part movie series “The Hobbit.” Creditors would hold 95.3 percent of the company after it exits from Chapter 11. Only approved holders of secured debt as of Oct. 4 will be allowed to vote.
1. Why do you think that MGM chose bankruptcy over a sale?
2. What is secured debt?
3. According to the video, what were the strategic reasons that MGM has deteriorated over the years? What are some of the risks it has faced?
Staff. (2010). MGM Bankruptcy Details: $4 Billion in MGM Studio Bankruptcy Deal, ThirdAge.com, October 8 (Retrievable online at http://www.thirdage.com/news/mgm-bankruptcy-details-4-billion-mgm-studio-bankruptcy-deal_10-8-2010).
CNN Video (2010). What Caused MGMâ€™s decline?, Oct. 8 ( Retrievable online atÂ http://www.cnn.com/video/)