LOS ANGELES, Kalifornia - November 4, 2010 - Metro-Goldwyn-Mayer, the fabled studio whose origins go back to Hollywood's earliest days, filed for bankruptcy protection, sagging under a mountain of debt.

The filing, made Wednesday morning in New York, came after MGM's leading creditors struck a deal with corporate raider Carl Icahn, who had amassed about 15% of the company's debt and was previously pushing for a merger between MGM and rival studio Lions Gate Entertainment.

Instead, Icahn agreed to support a plan under which the chief executives of film production and finance company Spyglass Entertainment will run MGM when it exits Chapter 11, which could occur as soon as next month.

Under the prepackaged bankruptcy plan, MGM's $4 billion in debt will be swapped for more than 99% of the equity in the reorganized company. Spyglass principals Gary Barber and Roger Birnbaum will become co-chief executives and co-chairmen, managing a smaller studio with lower overhead and producing fewer movies.

As part of an arrangement struck late Tuesday night, Icahn agreed to swing his support behind the Spyglass plan and not challenge it in Bankruptcy Court - a possibility that could have delayed any reorganization.

MGM's leading creditors agreed to amend their reorganization plan. Most notably, 15 titles from Spyglass' library will no longer be combined with MGM's catalog. Spyglass' Barber and Birnbaum, who were to get nearly 5% equity in the company, will now get 0.5%, in exchange for bringing movie projects to MGM that they had in development.

Icahn had opposed MGM's acquiring the Spyglass library titles, which included "The Sixth Sense" and "Seabiscuit," contending they were overvalued.

In addition, Icahn will be allowed to appoint one person to MGM's nine-person board. Barber and Birnbaum will also each have a seat on the board.

Once MGM exits bankruptcy, the creditors have also agreed to negotiate "in good faith" with Lions Gate or any other interested party about a potential merger or acquisition. The creditors had previously rejected a proposal by Lions Gate that would give them 55% of the equity in a combined studio.