MGM slashes staff ahead of bankruptcy exit
With MGM on the verge of emergence from bankruptcy, Leo the Lion's cutting staff with about 45 slots disappearing - reports Variety
Layoffs, which had been anticipated, began Friday at MGM headquarters in Los Angeles and were mostly in distribution and marketing.
MGM disclosed in recent bankruptcy filings that it had planned to cut the staff to about 320 from more than 400 but a spokeswoman indicated Friday that the number of cuts will be significantly smaller.
MGM, which has released only one film this year, received approval on Dec. 2 from a bankruptcy court judge of its "pre-packaged" plan of reorganization. Studio plans to emerge from Chapter 11 as early as next week with $500 million in cash available, once it secures a JP-Morgan Chase loan.
With Spyglass Entertainment toppers Roger Birnbaum and Gary Barber in charge, MGM's expected to seek a separate loan of $265 million-$275 million for its share of the back-to-back "Hobbit" movies.
MGM's secured lenders will exchange about $5 billion, including accrued interest and fees, for most of the equity in MGM. Barber and Birnbaum will serve as co-chairmen and CEOs.
The plan wipes out the equity interest of MGM's current owners, the Sony-led consortium that bought it in 2005 in a $4.8 billion leveraged buyout.
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