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Musicland owes anime companies $8.7 million

posted on 2006-01-23 11:30 EST
Unsecured debt for Funimation, ADV, Media Blasters, Geneon

Funimation is owed over $3 million in unsecured debt, according to a filing in U.S. Bankruptcy Court by Musicland's lawyer, James Stempel.

A list of the company's 30 largest unsecured creditors also includes ADV Films at $2.3 million, Media Blasters at $1.8 million, and Geneon at $1.6 million.

Ventura Distribution, which handles Viz Media, Tokyopop, and Urban Vision anime, is owed $5.8 million, also unsecured.

Ingram Book Company, Musicland's sole manga supplier, is owed $10.5 million. However, this debt is secured, meaning Ingram may use a foreclosure or repossession to satisfy the debt if Musicland defaults.

Unsecured debt is more difficult to recover. Funimation, ADV, Media Blasters, and Geneon will not be paid until after Musicland exits bankruptcy, and even then, it may require a lawsuit and court order for the anime companies to be paid any of the money they are owed.

In the meantime, the anime companies will be paid in full by both Ingram and Ventura, who are responsible for paying publishers regardless of Musicland's status.

ADV, Media Blasters, and Geneon may be owed more than is listed in the Musicland court filing. Navarre Corporation, which owns Funimation, is listed as being owed $6.7 million, but last week they issued a press release stating they were actually due $12.8 million because Musicland did not make November or December payments to the company.

Other anime companies have also confirmed that Musicland stopped payment in November and December after the checks were issued.

Musicland reports an overall negative net worth of $114 million, with $371 million in assets and about $485 million in debts.

follow-up of Musicland Updates
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