K-tel, the compilation specialist whose catalog includes Masters of Metal, Neon Nights and The Magic of ABBA, has closed its U.S. branch and filed for bankruptcy.
K-tel International USA, a subsidiary of music distribution giant K-tel International, ceased operations at its Maple Plain, Minnesota, headquarters on Monday and filed for Chapter 7 bankruptcy, the company said in a statement.
The company's other subsidiaries, including Dominion Entertainment, K-tel Entertainment UK and K-tel DVD, will continue operating.
The U.S. branch is the third K-tel International holding to close in recent months, following Dominion Vertriebs GmbH in Germany and K-tel Marketing in England. The three companies combined for 99 percent of the $15.7 million K-tel lost in its last fiscal year.
In its statement, K-tel blamed most of the U.S. branch's losses on one of its largest customers, music retailer Trans World Entertainment, charging that it had not been making payments. A lawsuit filed by K-tel USA against Trans World is before a federal court in St. Paul, Minnesota.
K-tel International also announced Wednesday that it plans to minimize its reliance on licensed material from major record labels by developing new products from its own Dominion catalog, which includes music by the likes of Patsy Cline and Percy Sledge.
The company formed in the late '60s and released its first album, 25 Polka Greats, in 1971. The label mostly focused on pop and classic rock, but also released compilations featuring disco, comedy and other genres.
K-tel reached its heyday in the late '70s, but by 1985, it was forced to file for bankruptcy. However, the label made a strong comeback by becoming part of the American stock exchange and launching subsidiaries, including K-tel USA and Cold Front, a dance and electronic label. K-tel has even reached out to younger listeners with the 2000 release of Gimme Indie Rock Volume One, which included tracks by the Flaming Lips, Yo La Tengo and Dinosaur Jr.