With MGM on the verge of bankruptcy, many thought that spelled the end for The Hobbit, but according to the The Hollywood Reporter MGM has secured support from key lenders to give the studio enough cash to proceed with its participation in the Guillermo del Toro adaptation — now, you can breathe.

Two Hobbits are being developed; one for a theatrical release in 2011 and a sequel. Lord of the Rings trilogy director Peter Jackson, Fran Walsh, Philippa Boyens, and del Toro are all writing scripts for both films, and they’re expected to be turned in as early as November.

While some of you may be thrilled that The Hobbit is still in the works, you might wonder how lenders have more than $150 million to spare? Reports suggest that keeping the film in development can be a very good thing for MGM, which used to be one of the most powerful and recognizable studios in Hollywood. The Hobbit is broadly viewed as a potential moneymaker, which will keep anyone who wants to bid for MGM interested when the studio gets auctioned off — something that is very likely to happen.

What does the future hold for MGM? I don’t know. This could mean the end of the lion’s roar at the beginning of films, but it makes me happy to know that MGM has maintained some value throughout this whole thing. For a studio that made films like 2001: A Space Odyssey, The Wizard of Oz, and Gone With the Wind, they have to at least try to save it.

What do you think? Does MGM deserve to be saved?