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Why has MGM gone bankrupt?

NEW YORK (AFP) – Legendary Hollywood film studio MGM declared bankruptcy, with reorganization plans approved by billionaire investor Carl Icahn under an agreement with Spyglass Entertainment.

Metro-Goldwyn-Mayer filed for Chapter 11 bankruptcy protection in a New York court seeking approval of a "pre-packaged" plan approved by its creditors after rejecting a takeover offer from Lionsgate and its biggest shareholder, Icahn.

The plan allows the company's secured lenders to exchange more than four billion dollars in outstanding debt for most of the equity in MGM upon its emergence from bankruptcy protection, the company said in a statement.

The main difference between the plan submitted Wednesday and another approved by its major creditors on Friday is linked to Spyglass, which recently released the Clint Eastwood-directed film "Invictus" and is preparing to release "The Tourist" with Johnny Depp and Angelina Jolie.

An MGM spokeswoman told AFP that in exchange for Icahn's support of the bankruptcy reorganization plan, Spyglass's existing catalog would not part of the deal, but future films would be included.

According to media reports, Icahn thought the previous plan overvalued the Spyglass catalog.

The size of Spyglass's stake in the reorganized MGM was not disclosed in the statement. Initially, Spyglass would have taken about five percent of the shares.

In addition, Spyglass founding bosses Gary Barber and Roger Birnbaum would not head the board of the new MGM. Instead, they would serve as co-chief executives of MGM Holdings Inc. and as co-chairmen and co-CEOS of the primary operating subsidiary of MGM Holdings Inc.

Icahn said in a separate statement that he will be able to name a board member.

MGM said it hopes the modified plan will be confirmed by the court within about 30 days.

"For many months, we have been working with our lenders to explore the strategic options available to MGM to improve MGM's financial position and maximize the company's value," co-CEO Steve Cooper said.

"By sharply reducing MGM's debt load and providing access to new capital, the proposed plan of reorganization achieves these goals... We now look forward to quickly emerging from Chapter 11."

Famous for its trademark roaring lion logo, MGM has the Bond franchise as well as the "Pink Panther" and "Rocky" series.

The studio, with a 4,000-strong back catalog that also includes "The Wizard of Oz" and "Singin' in the Rain," has been struggling in recent years, and its owners put it up for sale a year ago.

Several candidates emerged, including US-Canadian studio Lionsgate, as well as America's Liberty Media, Australian-born US media tycoon Rupert Murdoch's News Corp and India's Reliance Entertainment.

Uk film council

The UK Film Council is the Government-backed lead agency for film in the UK ensuring that the economic, cultural and educational aspects of film are effectively represented at home and abroad.

Objective

To help build a more diverse and inclusive workforce and film culture.

Principle Actions

• To nurture a diverse range of UK film talent;
• To integrate equality and diversity commitments into all UK Film Council activities and monitor their impact;
• To provide practical tools and information to encourage our partners and the industry more generally to promote diversity;
• To support initiatives designed to give people from minority ethnic groups, people with disabilities and women equal opportunities to get into and succeed in the UK film industry.

Our Diversity Unit provides grant-in-aid funding for programmes that support our diversity objectives. It does not fund film productions.

Objective

To help build a more diverse and inclusive workforce and film culture.

Principle Actions

• To nurture a diverse range of UK film talent;
• To integrate equality and diversity commitments into all UK Film Council activities and monitor their impact;
• To provide practical tools and information to encourage our partners and the industry more generally to promote diversity;
• To support initiatives designed to give people from minority ethnic groups, people with disabilities and women equal opportunities to get into and succeed in the UK film industry.

Our Diversity Unit provides grant-in-aid funding for programmes that support our diversity objectives. It does not fund film productions.

• The core UK film industry now contributes approximately £4.3 billion per year to the UK economy – up by 50% since 2000, when the UK Film Council was created;
• In 2009 UK films took 7% of the global box office and 17% of the UK box office; Independent UK films took an 8.2% share of the UK box office, the highest figure of the last decade;
• UK film grossed $2 billion at the worldwide box office last year;
• UK box-office takings are at record-breaking levels, worth £944 million in the UK in 2009, up 62% from 2000;
• The overall territory box office gross for the UK and the Republic of Ireland exceeded £1 billion for the first time in 2009;
• UK Film Council investments in British films have been hugely successful – for every £1 we have invested, £5 has been generated at the box office;
• Over 173.5 million people went to the cinema in the UK in 2009 – up 31 million from 2000, the highest since 2002 and the second highest since 1971;
• The UK has more digital cinemas than any other European country – 365 and counting;
• Overall UK audiences had a far greater choice of films in 2009 – 503 films were released, 31% more than a decade ago;
• The UK film industry directly provides jobs for almost 44,000 people, with extended employment impact of 95,000 jobs;
• The film industry earns over £1.3 billion in export income from film rights and film production services;
• In 2009 alone, British films and talent scooped 36 awards.
  

The history of Sundance Institute

In 1981, Robert Redford gathered a group of his friends and colleagues in the mountains of Utah to create an environment designed to foster independence, discovery, and new voices in American film. That spring, ten emerging filmmakers were invited to the first Sundance Institute Filmmakers/Directors Lab where they worked with leading writers and directors to develop their original independent film projects. In the remote natural setting and removed from the pressures of the marketplace, each emerging artist was encouraged to take creative risks and to craft a film true to their own, unique vision. In 1984, the Institute's activities expanded to include development programs for theatre when the Utah Playwrights Conference became the Sundance Playwrights Lab.

Since those first Labs, the Institute has grown into an internationally recognized resource for thousands of independent film, theatre, and music artists. The programs of Sundance Institute include the annual Sundance Film Festival, held in and around Park City, Utah, each January. Widely considered the premier platform for American and international independent film, the Festival has introduced audiences to some of the most original stories of the last three decades including Reservoir Dogs, Hedwig and the Angry Inch, American Splendor, An Inconvenient Truth, Little Miss Sunshine, and The Cove.

Through year-round support and a series of Labs and Fellowships for screenwriters, directors, and producers, the Institute's Feature Film Program has supported more than 500 feature films, including Rob Epstein and Jeffrey Friedman's HOWL, Cherien Dabis' Amreeka, Cary Joji Fukunaga's Sin Nombre, Miranda July's Me and You and Everyone We Know, and Walter Salles's Central Station. Documentaries ranging from Tia Lessin and Carl Deal's Trouble the Water to Laura Poitras' The Oath to Ross Kaufman and Zana Briski's Born into Brothels are among the 500 films that have been supported by the Documentary Film Program, which offers grants from the Sundance Institute Documentary Fund along with a series of Labs in editing and storytelling.

With a series of Labs and retreats that provide a creative environment in which to develop new work with dramaturgs and full casts, the Theatre Program has supported the development of more than 200 plays, including Taylor Mac's The Lily's Revenge, Tracey Scott Wilson's The Good Negro, Stew and Heidi Rodewald's Passing Strange, and Steven Sater and Duncan Sheik's Spring Awakening. The Native American and Indigenous Program hosts screenings, panels, events, and workshops throughout the year designed to foster community and the exchange of ideas among Native American and Indigenous filmmakers. Connecting filmmakers with musicians, the Film Music Program's Composers Lab allows accomplished musicians to explore composing for film while introducing filmmakers to the importance of music in film. The Creative Producing Initiative encompasses a year-round series of Labs, Fellowships, and events focusing on nurturing the next generation of independent producers. Our work in the arena of Short Films recognizes the importance of this groundbreaking form in the world of cinema and has long been established as a place to discover talented directors.

Sundance Institute also continues to support film and theatre artists beyond their participation in our Artist Programs through a commitment to building audiences for their work. In order to create a record of cultural history, the Sundance Institute Archives preserves the organization's history and documents the creative processes of the artists we support. The Sundance Institute Collection at UCLA provides a ground-breaking educational archive devoted to the collection and preservation of independent cinema. The Alumni Initiative cultivates connections with our alumni to foster a continued relationship between the Institute and the artists who have developed or shown work through the Institute's programs. The Art House Project is a collaboration with art house cinemas in cities around the country to create specialized screening programs of Sundance Institute and Sundance Film Festival-supported films for local audiences and our Community Programs are a series of Utah-based activities that offer many free and open to the public events for more than 25,000 Utah residents each year.