MGM is short of money and may not have enough money to start production on The Hobbit, according to Deadline Hollywood.  The report recounts a conference call with bondholders last week in which MGM warned that the studio needed forbearance on interest payments (on its staggering $3.5 billion in debt) or it would be unable to continue to survive.  The company told its creditors that it needed $20 million through the end of the year to fund overhead, and $150 million to fund its productions, including The Hobbit.   

Bankruptcy would not only disrupt the start of production on The Hobbit, it would also jeopardize MGM’s hold on the James Bond property, another crown jewel, according to the report.