ERI Notifies Staff of Impending Closure7 Aug, 2006 By: Erik Gruenwedel
National distributor Entertainment Resources Inc. has informed its staff that it plans to shutter operations in less than 60 days.
The 14-year-old Dania, Fla.-based distributor of home entertainment DVD and music CDs is expected to enter into a state alternative to federal bankruptcy protection known as “assignment for the benefit of creditors.”
ERI's retail clientele primarily includes drug retailers, electronic and discounts retailers, mass merchandisers and department stores.
The distributor blamed the closure on a variety of undisclosed negative business issues, including the ability to return product to vendors, according to an Aug. 3 letter to employees.
ERI said it was informing employees of the impending closure in accordance with the federal Worker Adjustment and Retraining Notification Act of 1988 that mandates companies intending to cease operations must notify employees at least 60 days prior to doing so.
In the letter, ERI management said the company was unable to secure improved credit terms with its major vendors (i.e. studios) with several notifying ERI customers about the problems.
“[This] has greatly hampered the company's ability to continue as a going concern,” said the letter. “It is with regret that the company … [has] concluded that it must in the very near future permanently close down operations, permanently lay-off all employees and wind up the affairs of the company.”
It remains to be seen what impact discontinued operations at ERI would have on home entertainment studios, including Buena Vista Home Entertainment, Universal Studios Home Entertainment, Genius Products, Warner Home Video, Sony Pictures Home Entertainment, Twentieth Century Home Entertainment and Lionsgate.
A source close to the company indicated that Buena Vista, Warner and Universal might be impacted the most.
Representatives at the three studios were not immediately available for comment. A spokesperson at Vivendi Visual Entertainment, which distributes DVDs through Universal Music Group, declined comment.
Calls to ERI president and CEO Randy Parker, CFO Brian Miller and Jim Pollan, SVP of sales were not returned.
Bill Burton, executive director of the National Association of Video Distributors, hoped the news wasn't true because he had been in contact with company executives over the summer about ERI joining the trade organization.
“I hope it isn't true for Jim's [Pollen] sake because he is a nice man,” said Burton.