Metro-Goldwyn-Mayer Inc. signed a non-binding letter of intent to hand over management of the film studio to Spyglass Entertainment Group’s Gary Barber and Roger Birnbaum, a person with knowledge of the situation said.
Lenders to MGM, which owes more than $3.7 billion, have endorsed the plan, said the person, who asked not to be identified because the agreement isn’t public.
Spyglass, a Los Angeles-based film production company, presented its restructuring proposal to more than 100 lenders on a conference call last month. The plan, endorsed by MGM’s biggest creditors, involves a bankruptcy filing to convert most of the debt into equity, a person said at the time.
Spyglass, producer of “The Sixth Sense” and “G.I. Joe: The Rise of Cobra,” is to examine MGM’s books as part of due diligence, the person said today. The Los Angeles-based studio shares film rights to the James Bond movies and J.R.R. Tolkien’s “The Hobbit.”
The Los Angeles Times reported the agreement with Spyglass earlier today. Barber and Birnbaum would be co-chairmen and co- chief executives, the newspaper said.
Qualia Capital’s Ken Schapiro is in talks to become chief operating officer of MGM, the Times said. New York-based Qualia made a restructuring proposal for MGM this year that included a $500 million equity infusion.
Spyglass executives and a spokesman for New York-based Qualia didn’t immediately respond to requests for comment.