UPDATE 2-MGM studio’s bankruptcy plan wins judge’s OK

* “Wizard of Oz” maker may exit Chapter 11 in a few weeks

* Icahn, other creditors supported prepackaged bankruptcy

(New throughout, adds comments)

By Caroline Humer and Sue Zeidler

NEW YORK, Dec 2 (BestGrowthStock) – Metro-Goldwyn-Mayer Studios Inc
entered the final act of its reorganization when it won court
approval, clearing the way for the storied Hollywood studio to
emerge from bankruptcy with new owners.

U.S. Bankruptcy Judge Stuart Bernstein approved the
restructuring plan at a hearing on Thursday in Manhattan. Jay
Goffman, a lawyer for MGM, said the company expects to emerge from
bankruptcy in a few weeks.

Founded in 1924 and known for its roaring lion logo, MGM
produced, released or controls many of Hollywood’s best known
films, including the James Bond, Pink Panther and “Rocky” film
series, as well as “Ben-Hur” and “The Wizard of Oz.”

It filed for a prepackaged bankruptcy on Nov. 3 after agreeing
with creditors — including billionaire Carl Icahn — on a
restructuring in which it will shed about $5 billion in debt and
hand control to its secured lenders.

MGM has struggled with its debt load since 2005 when it was
sold in a $2.85 billion leveraged buyout to a group of private
equity firms.

The company will hand over its management to Hollywood
insiders Gary Barber and Roger Birnbaum who run Spyglass
Entertainment, the company behind “Bruce Almighty” and “Get Him to
the Greek.” That arrangement has been seen as key to a lucrative
deal for MGM to participate in making two movies based on J.R.R.
Tolkien’s novel “The Hobbit.”

Creditors, including Icahn, agreed on the prepackaged
bankruptcy before the company filed, enabling it to receive
judicial approval less than a month after filing for bankruptcy.

Icahn had initially fought MGM’s bankruptcy plan, arguing
that he wanted to merge the company instead with Lions Gate
Entertainment Corp (LGF.N: ), in which he also owns a stake.
Lions Gate and MGM may still pursue a merger once the studio
emerges from bankruptcy, a source close to the situation said.

MORE LIONS GATE DRAMA AHEAD

Matthew Thompson, partner in Stroock & Stroock & Lavan LLP, a
law firm with a big entertainment practice, said that cutting a
deal with Icahn ahead of the bankruptcy filing ensured the court
process was smooth sailing, but he expects more drama to unfold
after the company emerges from bankruptcy.

“Someone just hit the pause button,” he said referring to
Icahn’s large positions in both Lions Gate and MGM. “He’s got a
hefty stake in both companies and he can be a very vocal
shareholder.”

While the company’s time in court was short, it followed
long debt negotiations during which it had worked out most of
the details of the plan in which lenders including Credit Suisse
Croup AG (CSGN.VX: ) and JPMorgan Chase & Co (JPM.N: ) would swap debt
for equity in a new company.

Getting through the court process in 29 days is about as short
a time as possible these days, according to one professor. That
quick time in court can remove the stigma that bankruptcy often
carries, he said.

“You can move on with your life without the court looking
over your shoulder and return to life as business as usual,”
said Stephen Lubben, a professor at Seton Hall University
School of Law in Newark, New Jersey.

The case is In re: Metro-Goldwyn-Mayer Studios Inc, U.S.
Bankruptcy Court, Southern District of New York, No. 10-15774.
(Reporting by Caroline Humer and Sue Zeidler in New York;
writing by Jonathan Stempel and Andre Grenon; Editing by Phil
Berlowitz)

UPDATE 2-MGM studio’s bankruptcy plan wins judge’s OK