New Money

Is Merrill Trying to Bail on Tom Cruise's Movie Studio?

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Posted: August 25, 2008

Struggling investment bank Merrill Lynch (MER) is examining its contract with United Artists—Tom Cruise's production company—to determine whether it can revise the deal on better terms, reports the New York Post . Last year, United Artists secured $500 million in financing from Merrill to fund 15 to 18 movies over the next five years. The firm "is looking for any event that might trigger a default on the loan and open the door to renegotiations," according to the Post . (A potential loophole is the recent departure of United Artists' co-owner and CEO Paula Wagner.) To guard against any Merrill moves, United Artists has hired Goldman Sachs (GS) as a strategic adviser, the paper said.