Movie studio Metro-Goldwyn-Mayer, Inc. has filed for bankruptcy protection, as part of a complex deal with its lenders that will see the company merge with Spyglass Entertainment.
The lenders, who are owed around $4 billion, will get some $2 billion in stock in the newly combined company, which will be run by Spyglass executives.
The court papers MGM filed Wednesday include a request to keep spending money in the coming months — including around $40 million to make "The Hobbit."
Here's a quote from the AP:
In the bankruptcy court filings, MGM sought approval to spend up to $125 million from its accounts on operations over the next 15 weeks.
About $40 million will go toward "The Hobbit," the two-part prequel to the "Lord of the Rings'' trilogy.
"The Hobbit'' is being directed by Peter Jackson and is half-owned by Time Warner Inc.'s Warner Bros., the person said. The two movies, being shot back-to-back, have a budget of around $500 million.
This latest hurdle might be an easy one for the film to get over — especially compared to the earlier challenges to the production.
So far, "The Hobbit" has undergone a change of directors, and labor issues in New Zealand nearly forced the studios to stop early production and film elsewhere.