ER mulls legal action over DVD fees

Troubled UK kids firm Entertainment Rights is exploring options that may include legal action against its North American DVD distributor Genius Products, claiming it has not paid the money it owes.

ER said in a trading update to the City of London today that it was evaluating its business partnership with Genius as it had not yet paid certain trading and advance fees due in accordance with the company’s distribution agreement.

“As a result, the company is pursuing all of its available legal remedies. The board considers that some or all of amounts owed by Genius under its contract may be at risk,” it said.

Genius Products is The Weinstein Company’s home video arm, which ER signed up with in January 2007 to make its brands such as Rupert Bear and Postman Pat available in America.

The news is the latest setback for the children’s entertainment company as it tries to reduce debt of around £127m (US$191m).

The company said that the Christmas trading period had been “significantly below expectations” and performance throughout the financial year had been “unsatisfactory.”

However, the company said that the decision to slash around one third of its workforce last year, as part of a cost-cutting plan, will start to benefit the company from March.

At the end of last year, the firm put a new management team in place, consisting of Deborah Duggan as chief executive and Edward Knighton as chief financial officer. ER added that its target of achieving £5m of annualised savings had now been achieved.