Chapman will seek to replace three Entertainment Distribution directors

By Lisa Kerner

Charlotte, N.C., Aug. 9 - Entertainment Distribution Co., Inc. investor Chapman Capital rejected company chairman Clarke Bailey's offer of a conference call, calling the gesture "futile" and "redundant" in a letter to Bailey.

The Aug. 8 letter was included as part of a schedule 13D filing with the Securities and Exchange Commission.

Bailey has refused to meet with the shareholder in person, according to the letter. As a result, Chapman Capital intends to replace directors James Caparro, Cliff O. Bickell and Ramon D. Ardizzone on Entertainment Distribution's board. Caparro is also the company's president and chief executive officer.

Chapman Capital owns 8,133,312 shares of the New York-based pre-recorded multimedia company's outstanding stock.

Robert Chapman, managing member of Chapman Capital, accused Bailey of "shirking" the responsibilities of his "entrenched position as chairman."

"There is nothing 'respectful' about your refusal to meet in person with the advisor to the largest ownership block of EDCI in that advisor's home city, which happens also to be the location where you could pay respects to EDCI's largest customer, Universal Music Group," Chapman wrote.

"Without question, you have placed yourself on a collision course with EDCI's owners at the site and time of their proximate opportunity to remove you and the rest of your hand-picked board of directors, in staggered fashion of course. It is in this fashion that history shall remember 'Burn 'Em Bailey and His Traveling Circus,'" Chapman added.

In June, Chap-Cap Activist Partners Master Fund, Ltd. said it may consider a "variety of different alternatives" to achieving its goal of "maximizing shareholder value, including negotiated transactions, tender offers, proxy contests, consent solicitations, or other actions."

As previously reported, Chap-Cap has been in contact with the company several times in the past, including a May 28 letter to Bailey.

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