MGM Studios, a movie studio which has been teetering on the edge of bankruptcy for months, just announced that the development of the movie BOND 23 will be put on hold indefinitely.
"Due to the continuing uncertainty surrounding the future of MGM and the failure to close a sale of the studio, we have suspended development on BOND 23 indefinitely," producers Michael Wilson and Barbara Broccoli said in a joint statement. "We do not know when development will resume and do not have a date for the release of BOND 23."
MGM, which has amassed over $3.7 billion dollars in debt, has unsuccessfully been attempting to sell itself since November 2009 and may need to file Chapter 11 bankruptcy. Could the movie studio's financial troubles and possible future bankruptcy mean a delay for other movie releases such as the "The Hobbit," a prequel to the "Lord of the Rings"? It's very possible. Because these movies are considered assets and the cash they will use to release and market the movie is also an asset, MGM was to move carefully if it is truly considering Chapter 11 bankruptcy or even a Chapter 7 bankruptcy. Could the assets be liquidated in bankruptcy? It is possible that MGM's assets could be liquidated during bankruptcy to repay creditors, if they file Chapter 7 bankruptcy. However, it is more likely, that the company will continue to search for a buyer and if they decide to file bankruptcy, they may negotiate a settlement with creditors that would include giving creditors some control over the company. One thing is for sure, filing bankruptcy has the potential to drastically reduce MGM's purported $3.7 billion in debt and if the company has a shrewd bankruptcy exit plan they could survive this financial challenge and emerge a much stronger and competitive movie studio.