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ER Tussles with U.S. Distributor

From VARIETY: Struggling U.K. tyke specialist Entertainment Rights, whose properties include POSTMAN PAT and THE LONE RANGER, is taking legal action against its primary U.S. DVD distributor, Genius Products, over alleged unpaid fees.

In a trading statement to the London Stock Exchange published Wednesday, the company said it was "pursuing all available legal remedies" to obtain the unspecified amount of coin owed.

The non-payment of fees is another blow for Entertainment Rights, which has slashed costs to the tune of GBP 5 million ($7.6 million) a year as it seeks to refinance itself and fully implement a turnaround strategy.

Trading over the crucial Christmas period had been "disappointing," said the statement.

Deborah Dugan, a former Disney executive who previously ran Entertainment Rights' U.S. arm and was appointed CEO last month, confirmed that the recent financial performance of the outfit, which is reputed to carry debts close to $200 million, was "unsatisfactory."

She added: "We continue to implement organizational changes that are expected to contribute not only to a stronger budgeting and forecasting culture but also a robust turnaround plan for the future.

"We remain in constructive talks with our bankers regarding new, longer term, funding arrangements to support the group past the company's financial year end of Feb. 28."

Entertainment Rights recently pink slipped a third of its workforce -- some 50 staff -- and negotiated extra funding worth $20 million to see it over the Christmas period.

In December, it emerged that the company was in tentative talks regarding a potential sale.

Those companies that might be interested in acquiring Entertainment Rights are thought to include Hit Entertainment, Cookie Jar Entertainment and the De Agostini Group.