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MGM Files for Bankruptcy

MANHATTAN (CN) - Metro-Goldwyn-Mayer Holdings and 160 affiliates filed for Chapter 11 bankruptcy protection Wednesday, listing more than $4 billion in debt. The iconic studio plans to merge with Spyglass Entertainment when it emerges from bankruptcy in about a month.

The bankruptcy filing follows an announcement last week that MGM's creditors had approved a prepackaged bankruptcy plan for MGM and its affiliates.

Under the Chapter 11 plan, MGM will trade its debt for equity in MGM once it emerges from bankruptcy. It then expects to raise about $500 million to finance film and TV projects, including "The Hobbit" and James Bond films.

Billionaire investor Carl Icahn recently tried to persuade fellow shareholders to merge MGM with Lionsgate, but lenders rejected the idea and instead embraced a merger with Spyglass.

Creditors include NBC Universal, Showtime Networks, the Screen Actors Guild and Netflix.

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