LOS ANGELES -- Financially beleaguered Management Company Entertainment Group Inc. said Wednesday that it is seeking to convert a pending Chapter 7 involuntary bankruptcy petition against its production unit to a Chapter 11 case.
The motion, filed with the federal bankruptcy court in Los Angeles, is designed to allow MCEG to reorganize rather than be liquidated.
Three creditors, including director Nicolas Roeg, brought the Chapter 7 petition nearly two months ago aginst MCEG Productions for their work on the unreleased MCEG film 'Cold Heaven.'
Since then, MCEG had received more than half a dozen extensions to respond until it made the Chapter 11 filing.
MCEG currently owes General Electric Capital Corp. $72.5 million and is more than $100 million in debt. Founded three years ago by Jonathan Krane, it ran into trouble after releasing a string of flops.
Raymond H. Godfrey Jr., who took over as president and acting chief executive officer last month for Crane, said, 'MCEG continues to explore financing arrangements and an overall restructuring plan.'
