Paul, Hastings, Janofsky & Walker partner Elizabeth H. Noe and associate John R. Collins in Atlanta are advising Entertainment Distribution Co. on a reorganization of the company.
The New York company last month filed its reorganization plan, which includes swapping shares of Entertainment Distribution’s common stock into a new company, to be called EDCI Holdings Inc. The reorganization is being planned in conjunction with the switch of the listing of its shares from the NASDAQ Global Market to the NASDAQ Capital Market. NASDAQ advised Entertainment Distribution in January that because of the price of the company’s shares it was in danger of being de-listed from the Global Market.
In its prospectus, Entertainment Distribution identifies as one of the company’s major assets “net operating loss carryforwards (NOLs).” The company describes the NOLs as “an important part of our overall strategy because they can be used to reduce the amount of income tax we would be required to pay in the future on earnings from our business.”
Entertainment Distribution is formerly known as Glenayre Technologies Inc. Under the Glenayre name, the company sold telecommunications messaging software and pre-recorded CDs and DVDs. Now, as Entertainment Distribution, it only makes and distributes pre-recorded CDs and DVDs, and also provides consulting on digital music downloads. One of Entertainment Distribution’s customers is Universal Music Group, whose artist roster includes Amy Winehouse and India.Arie.