Music distributor lays off 'dozens' of employees, keeps CDs from labels
By Natasha Rausch
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on June 09, 2016 at 5:22 PM, updated June 09, 2016 at 5:54 PM
Portland-based Allegro Media Group, a distributor for small, independent music and video labels, appears to be leaving a swath of unhappy business partners in the wake of its financial problems.
FJ Forest, owner of Waveform Records and an Allegro customer, said he talked to a former Allegro employee who said the distributor laid off "several dozen people" last Friday.
"They called employees into a conference room and gave everyone their last checks," Forest said. But, he said, company officers "didn't tell the labels."
The company kept CD inventory from dozens of independent record labels in the process, Forest said.
Forest's label sells its CDs to Allegro for distribution, but hasn't received a payment in more than a year. He said Allegro sent him another purchase order last week, but because he hasn't been paid, he didn't fill it.
Forest said Allegro is refusing to return CDs to him and the other labels, too. Because Allegro does not pay for CDs upfront, customers don't have the money or the inventory.
Forest said Allegro doesn't appear to be filing for bankruptcy but will instead "reorganize" under Somerset, one of its subsidiaries.
Mark Powell, executive director of the independent label Cappella Romana, said he also heard about the layoffs and liquidation.
Powell said Cappella Romana is owed more than $15,000 in back sales from CD and digital downloads, and the retail value of his label's seized assets is another $14,000.
In a press release, Powell said Allegro issued an email statement earlier this week.
It read: "The company has engaged, [sic] Edward Hostmann Inc., [sic] as Chief Restructuring Officer to supervise the process. EHI will be managing the liquidation of the Allegro business lines in an orderly out of court liquidation."
Edward Hostmann Inc. provides financial advisory services to companies in crises, according to its website.
Edward Hostmann was not available for comment Thursday, and Allegro did not respond to interview requests.
— Natasha Rausch