Alliance Entertainment Parent Files for Bankruptcy Protection28 Apr, 2009 By: Erik Gruenwedel
The parent of DVD distributor Alliance Entertainment April 28 filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in Wilmington, Del.
Source Interlink Cos. said the filing is not expected to affect Alliance directly, although studio creditors cited include 20th Century Fox Home Entertainment with $11.7 million owed, Paramount Home Entertainment with $9 million, Sony Pictures Home Entertainment ($5.7 million), Walt Disney Studios Home Entertainment ($4.6 million), A&E Home Video ($3.2 million), Image Entertainment ($3.1 million), Genius Products ($2.5 million), E1 Entertainment Distribution (formerly Koch) $2.1 million, and Gaiam $1.4 million.
Alliance retail clients include Blockbuster, Walgreens, Barnes & Noble and Hastings Entertainment, among others.
Source Interlink said significant declines in print advertising and the recession prompted the filing. It said the bankruptcy is designed to eliminate $1 billion in debt and that it would re-emerge in 35 days as a privately held company.
The Bonita Springs, Fla.-based company publishes 75 magazines, including Motor Trend, Hot Rod and Street Chopper, and is owned by billionaire Ron Burkle. It listed debts of $1.9 billion and assets of $2.4 billion, according to the filing.
U.S. magazine advertising revenue in the first quarter have plummeted 20% compared to the previous year, according to the Publisher’s Information Bureau. U.S. auto sales dropped 37% in March.
Source Interlink employs about 8,000 people.