The US Bankruptcy Court For The Southern District Of New York has approved MGM’s pre-packaged plan of reorganisation, paving the way for the company and its subsidiaries to emerge from Chapter 11 in short order. 

Judge Stuart M Bernstein found that the plan satisfied the various requirements of the US Bankruptcy Code.

MGM expects the plan to become effective by mid-December once the conditions of effectiveness have been met. Upon its emergence, the company’s secured lenders will exchange approximately $5bn, including accrued interest and fees, for most of the equity in MGM.

Gary Barber and Roger Birnbaum will lead MGM as co-chairmen and CEOs. MGM previously received approval from the court on its motion to retain JPMorgan Chase to arrange $500m in exit financing to fund operations, including production on a new slate of films and television series, and expects to have that exit financing funded by mid-December.

“Today’s ruling is an important milestone for MGM,” co-CEO Stephen Cooper said.  “Thanks to the support of our lenders and the hard work of our employees, we have moved through the restructuring process quickly.

“By dramatically reducing MGM’s debt load and providing MGM with access to new capital, the reorganisation plan the court confirmed today will enable MGM to emerge from this process with a solid financial foundation and will position MGM to be a successful studio going forward.”

The company’s restructuring counsel are Skadden, Arps, Slate, Meagher & Flom LLP and Klee, Tuchin, Bogdanoff & Stern LLP. Its restructuring advisor is Zolfo Cooper and its financial advisor is Moelis & Company.