A judge on Thursday confirmed Metro-Goldwyn Mayer Inc.'s plan to exit bankruptcy in the hands of its creditors, less than 30 days after the movie studio filed prepackaged Chapter 11 restructuring proposal in New York.

Judge Stuart M. Bernstein of U.S. Bankruptcy in Manhattan approved a plan that calls for creditors to forgive roughly $4 billion in debt in exchange for equity in the restructured MGM. Bernstein said the plan satisfied the elements of the bankruptcy code and should be confirmed.

Because MGM's plan had overwhelming support of creditors, the hearing was essentially a formality, combining a hearing on the adequacy of the company's disclosure statement--or plain language reading of a bankruptcy plan--with a hearing on the confirmation plan itself.

Spyglass Entertainment co-founders Gary Barber and Roger Birnbaum will run the company when it exits Chapter 11, which the company hopes will be "in a couple of weeks," according to Jay M. Goffman of Skadden Arps Slate Meagher & Flom LLP, a lawyer for MGM.

Goffman told Dow Jones after the hearing that MGM just needs to finalize its credit facility, and then will be set to exit bankruptcy.

MGM plans to raise about $500 million for new films and projects upon exiting bankruptcy, and will retain all its assets. Bernstein approved that financing, in which J.P. Morgan Chase & Co. (JPM) will act as the arranger and bookrunner, at a hearing last month.

The movie studio filed its long-awaited bankruptcy on Nov. 3 after satisfying the concerns of dissident creditor Carl Icahn, who as part of an agreement will select one of the nine members for MGM's new board of directors. Bernstein also approved the Icahn board seat last month.

Icahn had tried to buy other creditors' debt at a premium in exchange for their assurance they'd vote against the plan.

Spyglass also agreed to keep separate from MGM a collection of older films that Icahn had called overvalued. The deal, if consummated, would have given Spyglass a larger stake in MGM.

(Dow Jones Daily Bankruptcy Review covers news about distressed companies and those under bankruptcy protection.)

-By Joseph Checkler; Dow Jones Newswires; 212-416-2152; joseph.checkler@dowjones.com
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