MGM lion (photo courtesy of MGM Studios)

Who will buy them? And who can afford to take on the massive debt of over $4 billion?

In the meantime, fans have been left to chew their nails, waiting to learn the fate of a number of film projects.

The studio’s plight put a halt to a new installment of James Bond 007 with Daniel Craig, and up until recently also Peter Jackson’s "The Hobbit," which is being co-produced with Warner Bros.

"The Hobbit" faces numerous other issues; Jackson is fighting the Screen Actors Guild in his native New Zealand over taking non-union actors.

In September 2009, Stephen Cooper took over as CEO of MGM to save it from financial ruin. He is a financial rescue specialist whose credits include a tenure as CEO of Krispy Creme Donuts.

His first action was to tell MGM’s 40 plus equity and bondholders to raise $130 million to keep the company afloat. If they didn’t do so, their investment would be worth nothing.

Cooper negotiated with the company’s more than 100 credit holders to delay bank loan repayments while MGM looked for a buyer.

The prolonged vetting procedure could be reaching its conclusion with a Spyglass Entertainment deal, which involves Spyglass merging with MGM and taking a 4 to 5 percent equity stake, and a bankruptcy plan that would leave Spyglass management heading the new company.

The diverse number of companies that bid for MGM and their debt included Time Warner; their bid was rejected for being less than $2 billion.

A $2 billion joint offer from the Bond film producers, Barbara Broccoli, and major Bollywood player Sahara India Pariwar was also rejected last month.

The Spyglass deal was meant to have reached a conclusion next week, but Carl Icahn, a major shareholder in Lions Gate, launched a rival bid. Lions Gate was one of the first names in the hat before the bidding process during the time when Cooper took charge.

The two film companies, Spyglass and Lions Gate, are now most likely to do a deal for control of MGM Studios. Both are keen to take on MGM’s 4,000 plus film titles, and run alongside major Hollywood studios like 20th Century Fox and Walt Disney.

Lions Gate’s three largest shareholders support the proposal: Carl Icahn, Mark Rachesky’s MHR Fund Management and Gordon Crawford’s Capital Research Global Investors. With Lions Gate’s share prices rising 21 cents to $7.65 upon the news, it looks like Wall Street supports the deal too.

The proposal will see Lions Gate combine with MGM and gain 45 percent of the new company and give MGM debtholders a 55 percent stake, in exchange for $1.8 billion.

The new date set for a decision is in three weeks. The saga is, however, far from over; news of "The Hobbit" greenlight has emboldened MGM debtholders.

"The Hobbit" is expected to gain high box-office returns, and has increased the debtholders asking price.

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