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Following Paula Wagner’s coerced exit at United Artists two weeks ago, Merrill Lynch is “examining its contract with United Artists as the beleaguered bank looks to revise the deal on more favorable terms,” according to the Post today. Specifically, the bank is looking to see if UA’s parent company, MGM, violated any of the terms of its original agreement by ousting Wagner as CEO, which left the studio staffed by just Tom Cruise, some interns, and one of those plastic birds that dips its beak in a glass of water. According to a spokesperson for MGM, UA’s $500 million credit line is “completely safe,” though sources claim MGM head Harry Sloan is retaining Goldman Sachs for advice on alternative financing and Merrill Lynch is “looking for any event that might trigger a default on the loan and open the door to renegotiations.” The Post says it’s unlikely that MGM has done anything to violate the terms of its loan so far, which we guess means the original contract didn’t include the standard clause allowing Merrill to walk away if UA decided to make a movie about a one-eyed Nazi. Whoops!
MERRILL IS AIMING TO RETOOL ITS MGM FILM FINANCING WITH TOM CRUISE [NYP]
Earlier: Paula Wagner’s Departure Endangers United Artists’ Status As World’s Best Movie Studio