Alliance to File for Bankruptcy, Sources Say

Alliance Entertainment Corp., the nation’s largest independent music distribution company, is expected to file today for Chapter 11 bankruptcy protection, sources said. The long-rumored action follows Alliance’s default on a bank credit agreement requiring the company to raise $35 million of equity and make an amortization payment of $2 million before July 1. The move will probably have a devastating impact on hundreds of tiny independent record labels and will also hurt the nation’s six giant music manufacturers, to which New York-based Alliance is believed to owe more than $150 million. It’s unclear what will happen to Red Ant, the Alliance-affiliated record label launched last year by industry veteran Al Teller.