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Credit Lyonnais group. MGM-Pathe’s weak financial condition was
well-known in the entertainment industry and made it harder to
attract film talent to MGM.
E. Facility Agreements with CLBN
On March 22, 1991, Pathe and MGM-Pathe entered into a so-
called $250 million interim revolving credit facility with CLBN
(the $250 million facility), which incorporated all of MGM-
Pathe’s borrowing from November 1, 1990.14 All borrowing under
the $250 million facility was at the absolute discretion of CLBN
and was secured by MGM-Pathe’s assets and Pathe’s interest in
MGM-Pathe stock.
On March 29, 1991, a group of MGM-Pathe’s creditors
(excluding CLBN) filed an involuntary chapter 7 bankruptcy
petition in U.S. Bankruptcy Court. To pay off its creditors
(other than CLBN) and allow it to emerge from bankruptcy, MGM-
Pathe entered into a so-called $145 million facility agreement
(the $145 million facility agreement) with CLBN dated as of April
12, 1991.15 Borrowing under the $145 million facility agreement
was secured by MGM-Pathe’s assets, as well as the stock of Pathe
and MGM-Pathe. As a result of the new financing, MGM-Pathe was
14 The name of this agreement did not necessarily control
the amount that was advanced under the agreement.
15 The name of this agreement did not necessarily control
the amount that was advanced under the agreement. Amounts
available under the $145 million facility agreement were in
addition to amounts available under the $250 million facility.
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