SPV In Final Negotiations With SONY MUSIC ENTERTAINMENT GMBH

August 17, 2009

The interim board of creditors of the Hannover, Germany-based record company SPV (Schallplatten Produktion und Vertrieb GmbH) in insolvency, have assigned insolvency administrator, attorney Manuel Sack, to go into final negotiations about future cooperation with Sony Music Entertainment Germany GmbH.

On July 31, 2009, the local court in Hannover, Germany had ruled for administration of insolvency of SPV Schallplatten Produktion und Vertrieb GmbH.

Founded in 1983, the company had developed to one of the biggest independent music distributors worldwide. The insolvency of one of the SPV shareholders, followed by a compensation of millions of euros in 2007, parallel to a serious narrow market had forced founder and managing director Manfred Schütz, to file for insolvency at the local court Hannover at the end of May 2009.

Together with the credit institutions being involved, the insolvency administrator has managed to sustain the daily business in all areas of operation and is now able to ensure to all business partners a long lasting solution for SPV's future business.

After a multistage bidding procedure, the insolvency administrator has presented four binding offers to the board of creditors, all coming from well-known investors from the music and entertainment business.

Focusing on the concept presented by Sony Music Entertainment Germany GmbH, the creditors are hoping to establish a forward-looking and substantial structure that guarantees a safe and effective satisfaction for all creditors involved.

The new partner also vows to keep various headcounts within an ongoing operating company SPV Schallplatten Produktion und Vertrieb GmbH, though in an obviously restructured setup.

All parties involved are looking forward to speed up in finalizing their ongoing negotiations and to announce more details by the end of next week.

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