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Posted: Thurs., Jan. 8, 2009, 7:46am PT

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ER tussles with U.S. distributor

U.K. company claims unpaid fees

By STEVE CLARKE

Struggling U.K. tyke specialist Entertainment Rights, whose properties include 'The Lone Ranger' is taking legal action against its primary U.S. DVD distributor, Genius Products, over alleged unpaid fees.

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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.

The action was announced in a trading statement to the London Stock Exchange published Wednesday, but not the amount of coin owed. Trading over the crucial Christmas period had been “disappointing,” according to the statement.

This is another blow for Entertainment Rights, which recently pinkslipped a third of its workforce -- 50 staffers -- and slashed costs by £5 million ($7.6 million) a year as it seeks to refinance and implement a turnaround strategy.

Deborah Dugan, a former Disney executive who ran Entertainment Rights’ U.S. arm and was appointed CEO last month, confirmed that the financial performance of the outfit, which is said to have debts of $200 million, was “unsatisfactory.”

Entertainment Rights recently negotiated $20 million in extra funding to see it through Christmas.

In December, news emerged that it is in tentative talks regarding a sale. Companies kicking the tires are thought to include Hit Entertainment, Cookie Jar Entertainment and the De Agostini Group.