‘The Hobbit’ films in trouble (again) as MGM mulls bankruptcy

09.30.09 | Kunochan | 2 Comments

The MGM logo. Rawr.Originally posted on JRR Tolkien Examiner on 9/25/09.

The Peter Jackson-produced two-part The Hobbit adaptation, scheduled to begin principal photography early next year, has dodged a lawsuit that might have derailed the entire project. But now the films are in danger again, as motion picture studio Metro-Goldwyn-Mayer considers declaring bankruptcy.

LA Weekly media business columnist Nikki Finke has posted details from an over six-hour conference call between MGM management and the studio’s bondholders this past Wednesday:

MGM made a desperate plea for money because the studio had missed its numbers and was going to be out of funds very soon. “The implication was that it’s teetering on bankruptcy,” one source told me. MGM said it needed $20M in short-term cash flow to cover overhead, and an additional $150 million to get through the end of year and continue funding its projects, and to start Peter Jackson’s [The] Hobbit.

The bondholders (non-stockholder entities that have lent the company money) want MGM to declare bankruptcy, since they would be the first to be paid from the studio’s existing assets. But the studio insists a bankruptcy would not only imperil the Hobbit films, but would cause MGM to lose the lucrative James Bond franchise. MGM has distributed or co-distributed every Bond film since 1983’s Octopussy.

Right now, MGM and 20th Century Fox are slated to distribute the Hobbit films internationally. New Line Cinema and Warner Bros. will handle US distribution.

For more info: Via Deadline Hollywood via ComingSoon.net.
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