Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

EDCI Holdings, Inc. (the "Company" or "EDCI") has received requests from several of its shareholders for updates on activities related to the past employment by the Company of Mr. Michael W. Klinger ("Mr. Klinger"), previously the Company's Chief Financial Officer ("CFO"), and the status of related events surrounding Mr. Klinger's separation from the Company. In order to comply with Securities and Exchange Commission Regulation Fair Disclosure ("Regulation FD"), the Company hereby is responding to such inquires via SEC Form 8-K. Entertainment Distribution Company, LLC ("EDC LLC") is the Company's majority owned subsidiary that provides CD and DVD replication and logistics services.

As detailed in the background compilation below, the Company is providing the following update: a) On May 6, EDCI, EDC LLC and EDC LLC's subsidiary Entertainment Distribution Company (USA) LLC ("EDC USA") submitted a statement of position (the "EDCI EEOC Statement of Position") in rebuttal of a Notice of Charge of Discrimination received from the U.S. Equal Employment Opportunity Commission ("EEOC") on April 30, 2009 involving a Charge of Discrimination (the "MWK EEOC Discrimination Charge") by Mr. Klinger. In the MWK EEOC Discrimination Charge, Mr. Klinger makes what the Company strongly asserts are baseless, meritless allegations that he was the victim of age discrimination and retaliation; b) on April 30, 2009 and May 1, 2009, the Company received correspondence from Mr. Klinger relating to his apparent concern over the timing of the Company's completion of certain administrative activities required as a result of Mr. Klinger's separation from the Company; and c) on May 5, 2009, the Company provided correspondence to Mr. Klinger's attorney with additional analysis supporting prior evidence exhibiting significant discrepancies between Mr. Klinger's vacation days (during the 2H2008) as self reported vs. vacation days listed in his Company Microsoft Outlook calendar or E-mail or days where security records indicate Mr. Klinger's security access card was not used to enter Mr. Klinger's workplace.

On October 2, 2008, Mr. Thomas Costabile ("Mr. Costabile"), EDC LLC's and EDC USA's President-Chief Operating Officer, sent written correspondence to Michael Boldt of Ice Miller, LLP (external counsel advising EDC LLC and EDC USA on EDC USA's Severance Pay Policy (the "Severance Pay Policy")) ("Mr. Boldt"), with a copy to Mr. Klinger, stating "Mike & I will call your office at 2:00 pm today. We would like to finalize the ERISA Severance plan." See Exhibit 99.1 hereto.

On October 2, 2008, following Mr. Costabile's written correspondence to Mr. Boldt immediately above and certain additional communications, Mr. Boldt sent written correspondence to Mr. Costabile and Mr. Klinger noting "Attached is a copy of the draft with yellow highlights over the changes. Please advise if this is correct based on our earlier conversation." See Exhibit 99.2 hereto. One of the highlighted changes to the Severance Pay Policy is the title of the party who is authorized to amend the policy in accordance with Section 7.1, was modified to read "President." As a result, 7.1 states: "7.1 EDC may amend, terminate, suspend, withdraw or modify the Policy, in whole or in part, at any time, by a written instrument signed by the President of EDC."

On October 2, 2008, following Mr. Boldt's written correspondence immediately above and certain additional communications, Mr. Costabile sent written correspondence to Mr. Boldt, with copy to Mr. Klinger, stating "Thanks again. I have no additional comments. Subject to Mike's concurrence, please finalize." See Exhibit 99.3.

On October 2, 2008, in response to Mr. Costabile's written correspondence immediately above, Mr. Klinger sent written correspondence to Mr. Costabile and Mr. Boldt stating, "I read the document and am fine with proceeding." See Exhibit 99.4.

On October 2, 2008, in response to Mr. Klinger's written correspondence immediately above, Mr. Boldt sent written correspondence to Mr. Klinger and Mr. Costabile stating "Based on the exchange or e-mails, I have prepared a final version and it is attached as a PDF. Please advise if you also need a Word version." See Exhibit 99.5.

On October 2, 2008, following Mr. Boldt's written correspondence immediately above, Mr. Costabile sent written correspondence to Mr. Clarke Bailey ("Mr. Bailey"), at that time Chairman and Interim Chief Executive Officer of EDCI and Chairman of EDC LLC, with copy to Mr. Klinger, stating "Attached is a suggested Severance Policy for consideration and adoption by EDC (USA) LLC. This policy was prepared by our Indiana labor counsel in accordance with ERISA guidelines and is consistent with the severance calculation we previously discussed with the Board of Directors. I respectfully recommend adoption by the EDC LLC Board of Directors. Let me know how you would like to proceed." See Exhibit 99.6.

On October 3, 2008, Mr. Bailey sent written correspondence to the Board of Directors of EDC LLC recommending the approval of the Severance Pay Policy, and attaching a) the Severance Pay Policy as approved by Mr. Costabile and Mr. Klinger and b) a written consent to be executed by the Board of Directors of EDC LLC, approving the adoption of the Severance Pay Policy by EDC USA, EDC LLC's wholly-owned subsidiary. See Exhibit 99.7. The written consents of the Board of Directors of EDC LLC consenting to and approving the adoption of the Severance Pay Policy by EDC USA effective as of October 3, 2008 is attached as Exhibit 99.8. The written consent of the sole member of EDC USA, executed by Mr. Costabile, consenting to and approving the adoption by EDC USA of the Severance Pay Policy effective as of October 3, 2008, is attached as Exhibit 99.9.

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On October 3, 2008, Mr. Costabile forwarded Mr. Bailey's October 3, 2008 written correspondence to the Board of Directors, including attachments, to Mr. Klinger, with copy to Richard A. Friedman, Vice President, Audit and Compliance of EDCI ("Mr. Friedman"). See Exhibit 99.10 hereto.

On October 3, 2008, as previously filed with the Securities and Exchange Commission, EDCI and Mr. Klinger entered into an employment agreement (the "MWK CFO Employment Agreement") defining certain terms and conditions of Mr. Klinger's employment CFO and Treasurer of the Company. The MWK CFO Employment Agreement provides that either the termination of Mr. Klinger's employment by the Company with "cause" ("Cause," as defined therein), or resignation without "good reason" ("Good Reason," as defined therein), shall result in the termination of Mr. Klinger's employment by the Company without severance payments. Please see Exhibit 99.11 hereto.

On October 31, 2008, EDC USA mailed notices of termination, which notices included the amount of severance pay such employees would be entitled to upon their termination, calculated in accordance with the Severance Pay Policy approved by EDC LLC and EDC USA and analysis prepared and reviewed by Mr. Klinger and Mr. Costabile, to approximately 420 employees of EDC USA.

On December 25, 2008, Mr. Klinger bound the Company to five retention bonus awards ("MWK Unauthorized Retention Bonuses") that differed from the retention payment amounts approved by the Company's Compensation Committee on December 8, 2008. Mr. Klinger himself submitted the request for approval of those payments to the Company's Compensation Committee on December 7, 2008. The Company believes the MWK Unauthorized Retention Bonuses, in isolation, may constitute grounds for termination of Mr. Klinger's employment by the Company with Cause, and together with the Double Severance Payments, may demonstrate a pattern and practice of willful and deliberate violations of the Company's policies. The MWK Unauthorized Retention Bonuses were discovered on April 21, 2009, after the termination of Mr. Klinger's employment by the Company.

As a result of the January 2, 2009, assumption by Mr. Robert L. Chapman, Jr. ("Mr. Chapman") of the role of CEO of the Company and EDC LLC, Mr. Chapman came into a position of active oversight and supervision of the Company's senior executives, including Mr. Klinger.

On January 8, 2009, EDC LLC and Company management held two separate telephonic meetings, labeled the "EDC Operations/Finance Weekly Review/Cleanup" and "EDCI Management Weekly Review/Cleanup" conference calls. At no point during these meetings did Mr. Klinger make any mention of any severance compensation that had been awarded to any Employees of the Company or EDC LLC.

On January 24, 2009, during an in-person meeting of the Company's Chairman, Clarke H. Bailey ("Mr. Bailey") and the Company's senior management including Mr. Klinger, Mr. Klinger personally was reminded of the importance of his ceasing to fail to communicate immediately information that reasonably could be considered material to the Company's decision makers, including Mr. Chapman. During this same meeting, the Company's actual and offered payment of severance to past and current employees of the Company and EDC LLC was discussed and debated actively. At no point during this meeting did Mr. Klinger make any mention of any severance compensation that had been awarded to any Employees of the Company or EDC LLC.

On March 9, 2009, Mr. Chapman sent written correspondence to Mr. Klinger related to Mr. Chapman's concern regarding Mr. Klinger's performance deficiencies as the Company's CFO, specifically citing Mr. Klinger's unacceptable preparation of a presentation for the Company's Audit Committee. See Exhibit 99.12 hereto

On March 13, 2009, Mr. Chapman sent written correspondence to Mr. Klinger, in which Mr. Chapman cited his concern over Mr. Klinger's confirmed non-communication with a senior finance executive of EDC LLC for over one week. This senior finance executive, at Mr. Klinger's own request, had his direct, "solid" line of upward organizational reporting redirected to Mr. Klinger on February 11, 2009. Mr. Chapman conveyed to Mr. Klinger in this written correspondence that "this modus operandi of extremely weak communications cannot continue. It must end at once, as your continuance of exhibiting weak compliance with your fiduciary duty of due care puts EDC, and EDCI, at serious risk." See Exhibit 99.13 hereto.

On March 13, 2009, Mr. Chapman sent written correspondence to Mr. Klinger, citing Mr. Chapman's and Mr. Bailey's concerns regarding Mr. Klinger's "imprecise, loose, tardy, and at times non-existent business communications". On March 13, 2009, Mr. Klinger sent written correspondence to Mr. Chapman, in response to Mr. Chapman's March 13, 2009, correspondence, in which Mr. Klinger acknowledged receipt of Mr. Chapman's March 13, 2009 correspondence. See Exhibit 99.14 hereto.

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On March 13, 2009, following Mr. Chapman's written correspondences to Mr. Klinger on such date (see above), Mr. Chapman and Mr. Klinger engaged in a telephone conversation regarding Mr. Klinger's unsatisfactory performance as the Company's CFO. Mr. Chapman indicated to Mr. Klinger that the Company's Chairman of the Board of Directors, Mr. Bailey, would be calling Mr. Klinger to engage in a conversation on the same matter.

On March 14, 2009, Mr. Chapman and Mr. Bailey engaged in a telephone conversation regarding Mr. Klinger's unsatisfactory performance as the Company's CFO.

On March 14, 2009, following a conversation in which Mr. Klinger committed to improving his performance as the Company's CFO, Mr. Chapman sent written correspondence to Mr. Klinger conveying a critical review of Mr. Klinger's continued "deportment," despite the conversation between Mr. Chapman and Mr. Klinger of the prior day (see above). See Exhibit 99.15 hereto.

On March 14, 2009, Mr. Chapman discovered that on January 8, 2009, the same date of the EDC LLC and Company management conference calls (see above), Mr. Klinger, without proper authorization, and without any prior or post-notification to Mr. Chapman, had bound legally Entertainment Distribution Company (USA) LLC ("EDC USA") to severance payments in violation of the explicit financial limitations of EDC USA's Severance Pay Policy dated just three months earlier in October 2008 (see Exhibit 99.16 hereto). EDC USA is a wholly-owned subsidiary of EDC
LLC. The Severance Pay Policy provides that eligible employees may receive severance of one week of pay for each complete year of service up to a maximum of 10 weeks' pay. Modifications to the Plan may only be made by a written instrument signed by the President of EDC USA, a requisite that at no time has been met. However, despite the Severance Pay Policy's financial limitation of 10 weeks' pay and the unmet governance requirement of EDC President's signature to any modification of that limitation, Mr. Klinger legally bound EDC USA to make severance payments of twenty weeks' pay to 12 employees, which caused EDC USA to incur an unauthorized and thus improper severance expense of approximately $176,000. (the "Double Severance Payments"). See Exhibit 99.17 hereto.

In March and April 2009, the Company investigated thoroughly Mr. Klinger's actions (the "Klinger Investigation") in connection with the Double Severance Payments and other matters. As part of the Klinger Investigation, on March 16, 2009, Mr. Chapman sent written correspondence to Mr. Klinger summarizing the related discoveries to that date, noting in particular that the Double Severance Payments were a material breach of the Plan by Mr. Klinger. See Exhibit 99.18 hereto.

On March 17, 2009, Mr. Klinger sent written correspondence to Mr. Chapman . . .

Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
99.1 Written correspondence from Thomas Costabile to Michael Boldt dated 10/02/2008
99.2 Written correspondence from Michael Boldt to Thomas Costabile and Michael W. Klinger dated 10/02/2008
99.3 Written correspondence from Thomas Costabile to Michael Boldt dated 10/02/2008
99.4 Written correspondence from Michael W. Klinger to Michael Boldt and Thomas Costabile dated 10/02/2008
99.5 Written correspondence from Michael Boldt to Thomas Costabile and Michael

W. Klinger dated 10/02/2008 99.6 Written correspondence from Thomas Costabile to Clarke Bailey dated 10/02/2008 99.7 Written correspondence from Clarke Bailey to EDC LLC Board of Directors dated 10/03/2008 99.8 EDC LLC Signed Severance Policy by the EDC LLC Board of Directors 99.9 EDC LLC Signed Severance Policy by Thomas Costabile 99.10 Written correspondence from Thomas Costabile to Michael W. Klinger dated 10/03/2008 99.11 Michael W. Klinger Employment Agreement dated 10/03/2008 99.12 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/09/2009 99.13 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/13/2009 99.14 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/13/2009 99.15 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/14/2009 99.16 EDC LLC Severance Pay Policy dated 10/03/2008 99.17 EDC Michael W. Klinger signed second retention letter dated 01/08/2009 99.18 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/16/2009 99.19 Written correspondence from Michael W. Klinger to Robert L. Chapman, Jr. dated 03/17/2009 99.20 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/18/2009 99.21 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/18/2009 99.22 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/24/2009 99.23 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 03/24/2009 99.24 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 04/09/2009 99.25 Written correspondence from Michael W. Klinger to Robert L. Chapman, Jr. dated 04/09/2009 99.26 Written correspondence from Robert L. Chapman, Jr. to Michael W. Klinger dated 04/09/2009 99.27 Written correspondence from Michael W. Klinger to the Company's Board of Directors dated 04/13/2009 99.28 Written correspondence from the Company to Michael W. Klinger dated 04/13/2009 99.29 Written correspondence from Robert L. Chapman, Jr. to the Company's Compensation Committee dated 03/27/2009 99.30 Written correspondence from the Board of Directors of the Company to Michael W. Klinger dated 04/14/2009 99.31 Complaint filed in the United States District Court

by the Company, EDC LLC and EDC USA against Michael W. Klinger dated 04/17/2009

99.32 Written correspondence from the Company to Michael W. Klinger's counsel dated 04/28/2009 99.33 Written correspondence from Michael W. Klinger to the Company dated 04/30/2009 and 05/01/2009 99.34 Written correspondence from the Company to Michael W. Klinger's counsel dated 05/05/2009 99.35 EEOC Notice of Change of Discrimination by Michael W. Klinger dated 04/29/2009 99.36 Statement of Position by the Company, EDC LLC and EDC USA in rebuttal of the Charge of Discrimination by Michael W. Klinger dated 05/06/2009