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Ventura Owed $78 Million
First Look Payment Went to Bank Date: 5/8/2006 |
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Ventura Distribution, which at its peak distributed over 7,000 video titles for more than 60 labels, executed a General Assignment for the Benefit of Creditors shortly after First Look Studios acquired Ventura's assets for $16.5 million in March (see "Ventura Distribution To Be Sold"). The state of California provides the General Assignment for the Benefits of Creditors as an out-of-court alternative to filing Chapter 7 bankruptcy. In the General Assignment filing, Ventura indicated that PNC Bank, which was owed in excess of $21 million on a secured line of credit, received the entire $16.5 million purchase price, stating unequivocally in the filing: "there will be no funds available from the proceeds of the sale of the assets of Ventura to distribute to priority and unsecured creditors." In the filing Ventura listed assets of $52,842,417 and liabilities of $78,680,915 as of Dec. 31 2005. The liabilities include $25 million in accounts payable owed primarily to the companies whose video product Ventura distributed. The filing also indicates that the bankruptcy of the Musicland chain, which owed Ventura $7,083,955 at the time that it filed bankruptcy, created huge problems for Ventura and precipitated the sale of the company look. The companies that distributed their products through Ventura now have to make a choice whether to continue working through Ventura, which is now a division of First Look, with the hope of recovering some of the money that is owed to them, or to strike a deal with another video distributor. Showtime Networks has filed a $7 million lawsuit against Ventura in an attempt to recover money that it says it is owed, but other companies such as Zuffa (Ultimate Fighting Championship videos) and Viz are continuing to work with Ventura. Viz with its popular Inuyasha movies (over a million units sold) and Naruto DVDs coming on line is obviously a key supplier for Ventura. A Viz spokesperson told ICv2: "We are currently distributed through Ventura Home Entertainment, which is part of First Look Entertainment, but we are exploring our options." |
| Source: ICv2 |
