Allegro Liquidates Indie Music Distribution Division, Labels Left Empty-Handed

July 27, 2016

Portland-based Allegro Media Group has liquidated its independent music distribution division, which for the past 20 years has distributed the music of more than 100 independent New Age, classical, and children’s music labels to retailers across the country.

Allegro principle Joe Micallef revealed in an email to Billboard magazine that Umpqua Bank, Allegro’s secured lender, pulled its credit line, forcing Allegro to liquidate most of its operations, including CDs it has yet to pay the labels for.

Oregon Public Broadcasting reported that Allegro’s liquidation leaves independent labels wondering if they will be compensated for the unsold CDs still in Allegro’s possession, CDs that according to Mark Powell, executive director of classical vocal group Cappella Romana, are still available for sale through Amazon and iTunes. Powell estimates Allegro owes them $15,000 in back sales, including digital downloads. Plus, with secured creditors first in line to be compensated in an out-of-court liquidation process, indie labels may end up having to buy back their own CDs in order to reclaim their inventory.

In addition to liquidating assets, The Oregonian newspaper reported that Allegro also laid off several dozen employees, according to F.J. Forest, an Allegro customer and owner of Waveform Records. Forest claims he has not received payment for his CDs in more than a year, despite recently receiving a purchase order from Allegro for more CDs. He estimates that, like Mark Powell, he is owed more than $15,000 in back sales from CD and digital downloads, plus an additional $14,000 for the retail value of the CDs Allegro still has in inventory.

New Age music pioneer Steven Halpern is one of nearly 100 musicians and independent record labels involved in a class-action suit to reclaim unsold CD inventory still in Allegro’s possession. But, Halpern says, it’s not just his CD sales that are in jeopardy due to the liquidation; Allegro also handled his digital music distribution through an agreement with The Orchard, which distributes digital music via online outlets such as iTunes and YouTube. Although Allegro is no longer in the independent music distribution business, says Halpern, “They set up their contracts with The Orchard so that I am not automatically released to sign up with vendors like Amazon and iTunes now that I'm signed up with a new distributor.”

Halpern also stated that The Orchard will not pay Halpern directly for iTunes sales of his music until they receive a formal letter of direction from Allegro, a letter that has yet to be issued. Meanwhile, The Orchard continues to pay Allegro for Halpern’s music. “It’s aggravating the insult, because the income stream I should be having from all my digital sales will at best be tied up in an escrow account, ” says Halpern. “At least The Orchard wouldn’t be sending my money into the black hole of Allegro's creditor, but they have definitely not released my royalties yet to me.”