News

Another chapter has closed in the saga of the Dorian Group, but the story seems far from over. As we reported last month, Dorian had filed for bankruptcy and unsuccessfully attempted to auction its assets. The creditors and former owners of Reference Recordings were also nipping at Dorian's heels to get their label back.

Last week, the Dorian catalog (including copyrights and contracts) and recording equipment were sold to Virginia-based recording studio Sono Luminus for $135,000. Sono also paid $62,500 for the inventory in Dorian's Troy warehouse.

Sono Luminus was started ten years ago by a pair of Cisco Systems' founders, Len Bosack and Sandy Lerner, who believed that their high-tech backgrounds in digital signal processing, computational mathematics, and physics would enable them to "bring a new level of recording fidelity to music." Sono has also developed a recording process called "Spheric Sound."

Although Sono has stepped to the plate, issues remain. The judge presiding over the proceedings has suggested that several outstanding claims and liens against Dorian from creditors and artists still seeking rights to their recordings and contracts could complicate the deal.

Dorian's Reference Recordings LLC subsidiary was notably not included in the deal with Sono, and has been purchased by Koch Entertainment Distribution for $75,000. This deal, however, does not appear to settle the dispute with RR's former owners, who contend that Dorian never properly completed its purchase of the label, and therefore did not actually own it.

Update May 24, 2005: We've just received word that Koch has decided to back away from purchasing Reference Recordings. Also worth noting is that Koch announced earlier this month that it has entered into a definitive agreement to be purchased by the ROW Entertainment Income Fund. The companies report that ROW is buying the business for a total purchase price of approximately $80 million, including $20 million of ROW Fund Units, $55 million of cash and $5 million of assumed liabilities. The acquisition, which has been approved by the Trustees of ROW, is scheduled to close by June 1, 2005.