Caffeinated Clint
It was announced last week that MGM were as in the red as someone that’s crossed paths with The Devil’s Rejects.
Speculation (and rightfully so) suddenly arose that two of the studio’s big tentpole franchises, the James Bond franchise and the “Hobbit” films, would now be in more trouble than a hotel that’s just rented a room to Randy Quaid.
The good news is, MGM has secured support from key lenders to allow the studio enough cash to proceed with its participation in “The Hobbit.”
According to The Hollywood Reporter, a recent proposal by MGM’s new CEO Steve Cooper to defer interest payments on its debt load for the next three months on Thursday won a crucial endorsement from J.P. Morgan.
The investment firm leads a lenders steering committee that has been agitating for a dramatic restructuring of the Lion’s operations and its ownership structure. In exchange for an agreement to limited interest forbearance, J.P. Morgan secured a few changes in existing debt terms.
The first “Hobbit” aims for theatrical release in 2011, with Guillermo del Toro on board to direct that and a sequel. Peter Jackson, Fran Walsh, Philippa Boyens and del Toro are writing scripts for both and are expected to deliver the first screenplay by the end of November.
Warners will lead production and distribute at least domestically. For now, the WB also is covering any immediate expenses.
The move to delay interest payments until Dec. 15 wasn’t motivated by any immediate fears of insolvency at MGM, as a recent company audit showed cash flow should be sufficient to keep the lights on for at least another year.
Oh, and James Bond should be safe too.
