ENTERTAINMENT companies including EMI and Microsoft are preparing legal action against the administrators of Woolworths to claw back millions of pounds of stock.

Although the shelves in its stores are emptying fast, Woolies’ distribution arm, Entertainment UK (EUK), still has CDs, DVDs and computer games worth tens of millions of pounds in its warehouses.

Under “retention of title” rules, suppliers can claim back their own stock if it has not been paid for but, more broadly, they can can claim stock that has been paid for in lieu of debts.

That gives them the chance to resell the merchandise and prevent the administrator, Deloitte, offloading it cheaply.

Deloitte said it was in “constructive talks” with suppliers to realise value from EUK’s inventory. Music labels and book publishers scrambled to set up new distribution deals when EUK collapsed.

Woolworths’ final 200 stores will close on Tuesday after the company was put into administration in November with debts of £385m.

BBC Worldwide will this week resume talks to buy out Woolworths from their DVD joint venture, 2Entertain. The BBC has held talks to create a new partnership with US TV producers including Warner Brothers and NBC Universal.

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