Having just fought off a long-running lawsuit, The Hobbit now faces another peril not born of Middle Earth. Deadline Hollywood is reporting that the financial situation at MGM has become so dire that bondholders are considering the idea of just letting the studio go bankrupt.
At issue is a $3.5 billion dollar debt. Not exactly small change, and the studio is having trouble making the interest payments. Without some form of relief, the company says there won't be enough cash to keep funding current projects or to start production on Guillermo del Toro's adaptation of The Hobbit. At least one other big-name franchise is in danger as well. The studio owns the rights to James Bond, which is supposed to be heading toward its 23rd and, as yet, untitled installment.
No word yet from the creditors as to which way this is going to turn out. Still, the gold in The Hobbit is not limited to what can be picked up in Smaug's cave, and it is hard to believe that, even if the studio were to go bankrupt, so much potential profit would just be left lying around for too long with no one to claim it.