MGM studio prepares for pre-packaged bankruptcy

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LOS ANGELES (AP) - Metro-Goldwyn-Mayer Inc. says it has begun sending out ballots to its more than 100 creditors seeking approval of a pre-packaged bankruptcy that would have them exchange more than $4 billion in debt for equity in most of the new company.

Privately held production company Spyglass Entertainment will contribute some assets and merge two subsidiaries into MGM for a 4.69 percent stake in the company.

Creditors would hold 95.3 percent of the company after it exits from Chapter 11.

After exiting bankruptcy, Spyglass co-founders Gary Barber and Roger Birnbaum will serve as co-chairmen and CEOs of the company.

The move caps a process that began late last year as the company struggled to right itself from a dearth of hit movies, the decline of DVD sales and an overwhelming debt burden.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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