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One more step forward towards new life for MGM. Spyglass Entertainment partners Gary Barber and Roger Birnbaum have been named the new joint chairmen/CEOS, which pushes the ailing studio along the path to bankruptcy and restructuring.

Deadline says that Barber and Birnbaum won’t officially be CEOS until after MGM goes through Chapter 11 bankruptcy. MGM has a huge cadre of creditors, and the idea is to convert MGM’s debt to them into equity, which the lenders would then hold in the restuctured version of the studio.

Lenders have to vote on the debt/equity conversion plan, and have until October 22 to do so. Until then, whether MGM can actually move forward on any film project (i.e. The Hobbit) seems unlikely, but there may be a legal/financial wrinkle there that we don’t know.

Here’s MGM’s press release, for the super detail-oriented among you:

Metro-Goldwyn-Mayer Inc. (MGM) today announced that it has begun a solicitation of votes from its secured lenders for a pre-packaged plan of reorganization (the “Plan”).

MGM expects to continue normal business operations throughout the restructuring process. The Plan provides for MGM’s employees, vendors, participants, guilds, and licensees to be unimpaired.

The Plan provides for MGM’s secured lenders to exchange more than $4 billion in outstanding debt for approximately 95.3 percent of equity in MGM upon its emergence from Chapter 11. Spyglass Entertainment would contribute certain assets to the reorganized company in exchange for approximately 0.52 percent of the reorganized company. In addition, two entities owned by Spyglass affiliates – Cypress Entertainment Group, Inc. and Garoge, Inc. – will merge with and into a subsidiary of MGM, with the MGM subsidiary as the surviving entity. The stockholders of Cypress and Garoge will receive approximately 4.17 percent of the reorganized company in exchange.

Following the receipt of the requisite consents from secured lenders during the solicitation period, and in order to implement the debt restructuring, MGM intends to commence pre-packaged Chapter 11 cases under the U.S. Bankruptcy Code and seek confirmation of the Plan. Gary Barber and Roger Birnbaum, currently Co-Chairman and Chief Executive Officer of Spyglass Entertainment, would serve as the Co-Chairman and Chief Executive Officer of MGM following the company’s emergence from Chapter 11.

The deadline for the Company’s secured lenders to vote on the Plan is October 22, 2010, unless extended. Only holders of secured debt as of October 4, 2010 under MGM’s April 8, 2005 Credit Agreement will be solicited.

This press release is for informational purposes only and is not a solicitation to accept or reject the proposed Plan of reorganization referred to herein, or an offer to sell or a solicitation of an offer to buy any securities.

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