[Update, 3:35 p.m.: MGM announced that under the proposed plan, its approximtaely 100 lenders will exchange their more than $4 billion in debt for 95.3% of the reorganized studio following its exit from bankruptcy.

Spyglass Entertainment and two of its subsidiary companies, Cypress Entertainment Group Inc. and Garoge, Inc., will merge into MGM and together control the remaining 4.7%. The subsidiaries own the first 15 films produced by Spyglass, including "Seabiscuit," "The Sixth Sense," and "Bruce Almighty," all of which will added to MGM's existing library of about 4,000 titles. Those 15 Spyglass movies are valued at about $85 million.

MGM's previous owners, such as private equity firms Providence Equity Partners, TPG Capital, Sony Corp. and Comcast will see their stakes wiped out.

MGM's secured lenders as of Oct. 4 must vote on the play by Oct. 22. If it is approved, the studio will immediately file a pre-packaged Chapter 11. The bankruptcy process is expected to last about 30 days, according to a person familiar with the matter.

The beginning of the solicitation of votes on Thursday means that MGM is no longer open to other offers. Companies that previously made acquisition or merger offers and have remained interested, including Warner Bros. and Lions Gate, may not make another bid unless the Spyglass plan is rejected by the debt holders.

Once MGM emerges from bankruptcy, it is expected to ramp up production after several years of very little activity. It will release about six films per year, including new James Bond Pictures and two films based on "The Hobbit" that it will co-finance with Warner Bros.

Current executives such as motion picture group chairman Mary Parent are expected to leave with severance packages. A number of Spyglass' 30 employees will likely join Barber and Birnbaum at MGM.]

The approximately 100 debt holders that control the fate of troubled Metro-Goldwyn-Mayer heard a presentation Wednesday from the chief executives of Spyglass Entertainment about their plans to restructure the company following a prepackaged bankruptcy.

Spyglass chiefs Gary Barber and Roger Birnbaum have signed a non-binding letter of intent to take over of MGM as co-CEOs and -chairmen under a deal negotiated with a group of MGM's leading creditors. However, the entire group of creditors, who would swap their $4 billion debt for most of the studio's equity, have yet to sign off on the plan. They are expected to vote on it by the end of the month.

More than 50% of MGM's creditors -- who together own at least two-thirds of its debt -- must endorse the plan for it to pass. The studio would then enter a prepackaged bankruptcy during which the debt would be converted to equity.

After more than a year of uncertainty as debtors debated the studio's future, people close to the situation say MGM's leadership faces intense pressure to reach a resolution by the time a seventh debt forbearance expires Oct. 29.

-- Claudia Eller and Ben Fritz

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