Earlier worries that the production of "The Hobbit" may be in danger due to MGM's potential bankruptcy have been squashed. The Hollywood Reporter (THR) has come out with a story that the studio has secured a deal to retain co-ownership of the rights to the prequel to the "Lord of the Rings" trilogy by gaining support from key lenders to give the studio enough cash to move forward. The agreement has allowed the studio to skip three interest payments due on its $3.7 billion debt load. "Under the terms of the agreement, MGM's lender group has agreed not to enforce its rights or remedies arising as a result of the company's request to not currently pay interest due on Sept. 30, Oct. 31 and Nov. 30, 2009," the statement read.
MGM has a 50-50 rights partnership with Warner Bros.' New Line Cinema. THR further reported that "Warners will lead production and distribute at least domestically". It added that the Burbank studio is also covering any immediate expenses for the time being.
In late September, reports were swirling that MGM is on the verge of bankruptcy, presenting "The Hobbit" with the possibility of getting delayed indefinitely. At the time, it was mentioned that the studio had held a very long conference call with bondholders in a desperate plea for money because the studio was going to be out of funds very soon.
"The Hobbit" is taken from J.R.R. Tolkien's novel of the same title and is planned to be made into two-part movies. The movies will re-create the scenes of the novel, with additional events that make an impact to "The Lords of the Rings", such as the expulsion of Sauron from Mirkwood by The White Council.
Shooting is expected to start in March 2010 and go on for about 370 days. Ian McKellen, Hugo Weaving and Andy Serkis are said to reprise their "The Lord of the Rings" roles as Gandalf, Lord Elrond and Gollum respectively. The first of the adventure fantasy movie is scheduled for December 2011 U.S. release, while the second one is expected to hit theaters a year later.
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