Metro Goldwyn Mayer has begun plans to file for bankruptcy protection in an effort to rid itself of $US4 billion of debts.
The Hollywood film studio is asking more than 100 creditors to approve a plan that will see it enter Chapter 11 bankruptcy while it restructures.
Creditors will get a 95% stake in the company as part of the deal.
MGM said it would continue to operate as normal during the bankruptcy procedures.
The BBC reports the plan follows months of speculation over the future of MGM, which has large debts, a lack of blockbuster film releases, and a downturn in DVD sales.
Earlier this year, the studio put itself up for sale, but failed to find suitable bidders.
As part of the plans, Spyglass Entertainment will merge two of its subsidiary businesses into a subsidiary of MGM to create the new MGM company.
Spyglass will then own the remaining 5% of the new business, with its senior management taking charge.
Creditors have until 22 October to approve the plan.