Pinnacle Entertainment, one of the key distribution companies for independent record labels, has gone into administration.
The company's 94 staff are understood to have been been made redundant yesterday (December 3rd).
Pinnacle's clients include One Little Indian and Rough Trade records, as well as DVD and other software companies.
BDO Stoy Hayward has been brought in to handle the administration.
"Unfortunately the company has been affected by the sudden and steep downturn in the UK economy,” the administrator said in a statement.
It added it would be working to find a “favourable outcome” for the company.
Meanwhile, the Independent labels trade body AIM has called an emergency meeting for today (December 4th) to discuss how the problem will affect other independent labels.