Company Press Release
SOURCE: Alliance Entertainment Corp.
Alliance Entertainment Plan of Reorganization
Confirmed; Company Set to Successfully Emerge from
Chapter 11; Reports Operating Results for May
CORAL SPRINGS, Fla., July 31 /PRNewswire/ -- Alliance Entertainment Corp. (OTC Bulletin
Board: AETTQ - news), the nation's largest wholesaler of prerecorded music and related
products, announced today that the U.S. Bankruptcy Court for the Southern District of New
York confirmed the Company's Third Amended Joint Plan of Reorganization. The Court's
confirmation of Alliance's plan clears the way for the Company's emergence from its voluntary
Chapter 11 proceeding early in August.
''As the new, reorganized Alliance moves forward with a strengthened balance sheet, reduced
debt, interest and operating costs, the Company can now focus on the music distribution
business and opportunities for growth through emerging distribution channels with significant
emphasis on the Internet,'' said Eric Weisman, Alliance's president and chief executive officer.
''In just 12 months,'' Mr. Weisman continued, ''Alliance has successfully restructured not only
its balance sheet, but streamlined and improved its overall business, returning to its core markets
and renewing its core strengths.
''The Company exited areas of the business that no longer fit its strategic plan, consolidated
operations and procedures, and increased operational efficiencies; and throughout this difficult
period, we had the loyalty and cooperation of our employees, our customers and our vendors.
That has made all the difference. We are gratified by the outcome of our restructuring,'' Mr.
Weisman said, ''but we also recognize the hardship that many experienced as a consequence,
and we are truly appreciative of their continued support. I want to recognize, in particular, Al
Teller, who as chairman, worked closely with me to develop the business plan that served as the
foundation of the Company's plan of reorganization and which, ultimately enabled Alliance to
successfully emerge as a viable competitor and a dominant force in the one-stop, budget and
special products music distribution business.
''I am confident that the hard times are now behind us and that the Company will continue to
grow stronger and more profitable in the months and years ahead.''
Under the terms of the Plan, the newly reorganized Alliance Entertainment will become a private
company majority owned by a syndicate of banks. Holders of secured bank claims under the
Company's pre-petition credit facilities are expected to receive at least 86% of the shares in the
new reorganized company. Holders of general, allowed unsecured claims, including trade claims
and Senior Subordinated Notes will receive up to 6.5% of the equity of the reorganized
Company through warrants and shares of common stock, along with certain litigation rights. The remainder of the equity in the newly reorganized Alliance Entertainment is reserved for management.
The Company's existing common stock will be canceled upon the effective date of the Plan and shareholders in the old Alliance Entertainment will receive no distribution, either in
cash or common stock of the new Company.
At the same time Alliance Entertainment Corp. announced that it has filed its monthly operating
report, in which it reported a consolidated net loss of $3.4 million on net sales of $22.7 million.
The loss includes $2.4 million in interest and reorganization expenses. The June results compare
favorably with a consolidated net loss of $7.2 million on net sales of $22.9 million reported in
May.
Alliance Entertainment Corp. is the largest wholesaler of prerecorded music and related products.
The Company currently employs approximately 700 people in the United States, and Canada. It
maintains headquarters in Coral Springs, Fla. Alliance Entertainment Corp. and certain of its
subsidiaries filed to reorganize under Chapter 11 on July 14, 1997.
Forward-looking statements herein are made pursuant to the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements can generally be
identified as such because the context of the statement will include words such as the Company
''believes,'' ''expects,'' ''anticipates,'' or words of similar import. Similarly, statements that
describe the Company's future plans, objectives, estimates or goals are forward-looking
statements. There are certain important factors that could cause results to differ materially from
those anticipated by forward-looking statements made herein. Investors are cautioned that all
forward-looking statements involve risks and uncertainty. |
