MGM CREDITORS APPROVE SPYGLASS DEAL

MGM creditors on Friday approved a prepackaged bankruptcy plan under which they would become owners of the beleaguered studio, which would be run by Spyglass Entertainment partners Gary Barber and Roger Birnbaum. In doing so, they rejected an alternate plan pushed forward by activist investor Carl Icahn that would have merged MGM with Lions Gate Entertainment. However, news reports indicated that Icahn remains a force to be reckoned with as MGM comes back to life, free of the crushing debt that has paralyzed it for years. The Los Angeles Times reported on Friday that at the last minute Icahn, in an about-face, agreed to back the Spyglass deal in return for a seat on MGM’s board. Other reports indicated that Icahn also succeeded in reducing the stake that Barber and Birnbaum will wind up with when the reorganization is completed. Previous reports had indicated that they were due to receive 5 percent of the new MGM, while the lenders would receive the remaining 95 percent. It was not clear from initial reports just what percentage of the studio the pair will now own. Daily Variety reported that as part of the last-minute deal-making, Spyglass will now not have to contribute its library of films to the MGM library as it had agreed to do earlier. Still other reports indicated that Icahn has not given up his plan to merge MGM with Lions Gate, where he is the largest stockholder, and that he has simply made a tactical retreat for the time being.