Our Alchemy settles $2.38 million in distribution agreement claims

By Caroline Salls

Pittsburgh, May 4 – Our Alchemy, LLC Chapter 7 trustee George L. Miller requested court approval of a claim settlement reached with Momentum Pictures, LLC, according to a motion filed Wednesday with the U.S. Bankruptcy Court for the District of Delaware.

The trustee said Momentum and Our Alchemy entered into an exclusive distribution agreement in September 2011 under which Momentum would provide DVDs, Blue-Ray disks and/or other goods for distribution by Alchemy through Target stores throughout the United States.

As a second business relationship with Alchemy, Momentum sold products to Alchemy through the issuance of purchase orders and return invoices. The products purchased by Alchemy under this business relationship with Momentum would then be sold by Alchemy in Best Buy stores.

Meanwhile, under a third business relationship, Momentum and Alchemy entered into an exclusive distribution agreement under which Alchemy agreed to supply products to Momentum to distribute to Walmart stores throughout the United States.

The products were stored in a warehouse operated by Sony DADC US Inc.

According to the motion, the parties believe that Our Alchemy owed $825,762 to Momentum for unpaid product supplied to Target and $734,218 for unpaid products related to the Best Buy agreement.

Under the Walmart agreement, the trustee said $734,292 is on deposit in an escrow account, and Momentum owes Our Alchemy $1.07 million for the sales of Alchemy products to Walmart stores for which Momentum has yet to collect from Walmart, resulting in a $1.81 million total claim related to the Walmart agreement.

On Oct. 13, 2016, Momentum filed a $2.38 million claim against Our Alchemy, comprised of the Target claim, the Best Buy claim and related damages.

Under the proposed settlement, the agreements will be terminated, and Momentum will pay $367,145 to the Our Alchemy estate to cover half of the amount in the escrow account.

Momentum has agreed to credit $367,147 of the escrow amount against its claim.

A hearing is scheduled for June 6.

Our Alchemy is an independent film distribution company. The company filed bankruptcy on July 1, 2016 under Chapter 7 case number 16-11596.

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