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March 31, 2010 3:34 PM

MGM, Skadden, Get More Time in Debt Crunch

Posted by Zach Lowe

Metro-Goldwyn-Mayer, the beleaguered film studio, won an extra six weeks to renegotiate some of its most pressing debt as it contemplates several bids and a possible bankruptcy filing that could involve a plan to give control of MGM to some of its lenders, according to The New York Times.

A team from Skadden, Arps, Slate, Meagher & Flom and the Los Angeles-based bankruptcy boutique Klee, Tuchin, Bogdanoff & Stern is advising MGM.

The Skadden team reflects the number of options on the table. It includes Jay Goffman, cochair of the firm's restructuring department, private equity cochair Nick Saggese, and M&A partner Rick Madden. Goffman and Kenneth Klee, name partner at Klee Tuchin, did not immediately return calls seeking comment.

The studio has struggled since 2004, when a group led by Sony, Comcast, and three private equity firms purchased MGM for $4.8 billion in a leveraged buyout. That deal saddled MGM with huge debts. Today MGM struck a deal to extend two payments on those debts: an interest payment that had been due today and a $250 million payment on a revolving credit line, the NYT says. Those payments will now be due on May 14. 

The studio is mulling over takeover offers, including reported offers from Time Warner and Len Blavatnik, the NYT reports. 

As our colleague Brian Baxter pointed out, Skadden and Klee Tuchin have deep connections with past MGM deals through their work on behalf of billionaire Kirk Kerkorian, who has bought and sold the studio several times. Kerkorian was the controlling shareholder of MGM when the Sony-Comcast group purchased it in 2004. 

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