MGM creditors have decided to put the company into Chapter 11 as opposed to selling its debt to investor Carl Icahn, Forbes reports.
According to the article, "The vote came after Icahn had made two separate offers to buy up MGM debt in order to merge the company with Lionsagte, a studio where he is the majority shareholders. Icahn’s offers would have given him a 51% share of MGM and the heft to force the merger.
"But yesterday [October 28, 2010] Lionsgate sued Icahn in New York Federal Court claiming he had been playing a “double game” with Lionsgate and MGM. Icahn had initially resisted Lionsgate’s efforts to merge with the company. He later came out in full support."
The article also says, "Under the bankruptcy plan, MGM will have about a month to get its house in order and all of the $4 billion in debt will be turned into equity. The company will then come under the management of Spyglass Entertainment heads Gary Barber and Roger Birnbaum."