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MGM receives seventh forbearance on debt payments

September 15, 2010 |  2:00 pm

Lenders for MGM granted the financially hobbled studio its seventh forbearance on interest payments and principal due on its nearly $4-billion debt as it works on finalizing a management agreement with Spyglass Entertainment and a restructuring deal to keep the company afloat.

A week ago, MGM signed a nonbinding letter of intent with Spyglass founders Gary Barber and Roger Birnbaum to take over management of the Century City-based studio. That deal must be ratified by MGM's board of directors and more than 100 creditors, who are expected to swap their debt for equity as part of a prepackaged bankruptcy proceeding.

The studio's sixth forebearance expired Wednesday, and the latest one extends until Oct. 29.

-- Claudia Eller