Brilliant Digital Entertainment Inc – ‘CORRESP’ from 11/1/05

On:  Tuesday, 11/1/05, at 8:11pm ET   ·   Private-to-Public:  Filing ¶  –  Release Delayed to:  7/12/06   ·   Accession #:  1170918-5-755

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Delayed-Release Comment-Response or Other Letter to the SEC
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: CORRESP     Comment-Response or Other Letter to the SEC            5     23K 

CORRESP
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[STUBBS, ALDERTON & MARKILES LLP LETTERHEAD]

                   JOHN MCILVERY
             Partner
                               Direct       818.444.4502
           Voice
                               Direct Fax   818.474.8602
                               Mobile       626.705.0758
                                           E-Mail       jmcilvery@biztechlaw.com

November 2, 2005                                                                

VIA EDGAR AND FACSIMILE                                                         

Securities and Exchange Commission                                              
Division of Corporation Finance                                                 
100 F Street, N.E.                                                              
Washington, D.C. 20549                                                          

RE:      BRILLIANT DIGITAL ENTERTAINMENT, INC.                
   RESPONSES TO STAFF COMMENTS OF OCTOBER 26, 2005

Ladies and Gentlemen:                                                           

         On behalf of Brilliant Digital Entertainment,  Inc. (the "COMPANY"), we
have  enclosed  for filing one copy of  Amendment  No. 1 to Proxy  Statement  on
Schedule 14A, File No. 1-14480 (the "PROXY STATEMENT AMENDMENT").               

         In addition to filing the Proxy Statement Amendment,  we hereby provide
supplementally  the following  responses in reply to the Staff's comment letter,
dated October 26, 2005 (the "COMMENT LETTER").  The factual information provided
herein  relating to the Company has been made  available  to us by the  Company.
Paragraph  numbering  used for each response set forth below  corresponds to the
numbering used in the Comment Letter.                                           

PRELIMINARY PROXY STATEMENT ON SCHEDULE 14A FILED OCTOBER 25, 2005              
FILE NO. 1-14480                                                                

ITEM 1:  REVERSE SPLIT AMENDMENT, PAGE 3                                        

1.       PLEASE   ADVISE  US  WHETHER  AND  HOW  YOU  HAVE   COMPLIED  WITH  THE
         REQUIREMENTS  OF  SECTION  242(B)  OF THE  GENERAL  CORPORATION  LAW OF
         DELAWARE  WITH RESPECT TO YOUR  PROPOSAL AND  PROSPECTIVE  AMENDMENT TO
         YOUR CHARTER.  IN AMENDING YOUR CHARTER,  SECTION  242(B)  REQUIRES THE
         BOARD OF DIRECTORS TO "ADOPT A RESOLUTION  SETTING  FORTH THE AMENDMENT
         PROPOSED,   DECLARING  ITS  ADVISABILITY."  YOUR  DISCLOSURE  DOES  NOT
         INDICATE WHETHER THE BOARD OF DIRECTORS ADOPTED THE AMENDMENT FOR WHICH
         YOU ARE SEEKING STOCKHOLDER APPROVAL.  PLEASE REVISE YOUR DISCLOSURE AS
APPROPRIATE.                                                  

         On October 10, 2005,  the Company's  board of  directors,  by unanimous
         written consent,  adopted and declared advisable a resolution approving
an  amendment to                                              

15821 Ventura Boulevard, Suite 525, Encino, California 91436
 office > 818.444.4500 fax > 818.444.4520 www.biztechlaw.com

CORRESP
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Securities and Exchange Commission                                              
November 2, 2005                                                                
Page 2                                                                          

         the Company's  Amended and Restated  Certificate  of  Incorporation  to
         effectuate  a  pro-rata  reverse  split  of the  Company's  issued  and
         outstanding  common  stock by which  every ten shares  will  become one
share.                                                        

         The Company has revised the first  sentence of the first  paragraph  of
Item 1: Reverse Split Amendment to read as follows:           

         "On October  10,  2005,  our Board of  Directors  adopted and  declared
         advisable  a  resolution  approving  an  amendment  to our  Amended and
         Restated  Certificate of Incorporation to effectuate a pro-rata reverse
         split of our issued and  outstanding  common  stock by which  every ten
shares will become one share (the "Reverse Split")."          

         Additionally,  the  proxy  statement  includes  the  Board's  unanimous
         recommendation  that the  stockholders  vote "FOR" the Amendment of the
Certificate of Incorporation to accomplish the Reverse Split. 

2.       PLEASE TELL US WHAT  CONSIDERATION  YOU GAVE TO THE APPLICATION OF RULE
         13E-3  UNDER THE  EXCHANGE  ACT AND ADDRESS  WHETHER THE REVERSE  STOCK
         SPLIT HAS A  "REASONABLE  LIKELIHOOD  OR A PURPOSE  OF  PRODUCING"  THE
         EFFECTS DESCRIBED IN RULE 13E-3(A)(3)(II). PLEASE DISCLOSE WHETHER THIS
         IS A FIRST STEP IN A GOING  PRIVATE  TRANSACTION.  PLEASE ALSO  PROVIDE
         ADDITIONAL  DISCLOSURE WITH RESPECT TO THE EFFECTS OF THE REVERSE STOCK
         SPLIT ON THE NUMBER OF YOUR RECORD HOLDERS.  PLEASE SEE  INTERPRETATION
         M.30  OF  OUR  JULY  1997  MANUAL  OF  PUBLICLY   AVAILABLE   TELEPHONE
INTERPRETATIONS FOR ADDITIONAL GUIDANCE.                      

         A Rule 13e-3  transaction is any  transaction or series of transactions
         involving  one or  more  of the  transactions  described  in  paragraph
         (a)(3)(i)  Rule 13e-3  which has either a  reasonable  likelihood  or a
         purpose of producing, either directly or indirectly, any of the effects
described in paragraph (a)(3)(ii) of Rule 13e-3.              

         Rule 13e-3 is  inapplicable  to the reverse stock split proposal as the
         proposal is not the first step in a going private  transaction and does
         not constitute a transaction  described in paragraph  (a)(3)(i) of Rule
         13e-3.  The reverse stock split  proposal  reconstitutes  the Company's
         outstanding  shares of common stock by combining  every ten outstanding
         shares  into  one  share.  This  reconstitution  does not  amount  to a
         purchase of the  Company's  equity  securities by the Company or any of
         its  affiliates  (as described in Rule  13e-3(a)(3)(i)(A))  or a tender
         offer for or request or invitation for tenders of the Company's  equity
         security by the Company or any of its  affiliates (as described in Rule
         13e-3(a)(3)(i)(B)) as no consideration is being paid. While the reverse
         stock split proposal is subject to the  requirements of Regulation 14A,
         the reverse  stock  split  proposal  does not  involve the  purchase of
         fractional interests (as described in Rule 13e-3(a)(3)(i)(C)).  Holders
of shares                                                     

CORRESP
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Securities and Exchange Commission                                              
November 2, 2005                                                                
Page 3                                                                          

         of common  stock who would  otherwise  be  entitled  to a fraction of a
         share on account of the reverse  stock split will  receive,  in lieu of
         such fractional  share, one whole share of common stock.  Consequently,
         the  reverse  stock  split  will have no effect on the number of record
holders of the Company's common stock.                        

         The reverse stock split proposal does not have a reasonable  likelihood
         or  a   purpose   of   producing   the   effects   described   in  Rule
         13e-3(a)(3)(ii).  We note that  presently,  the  Company's  outstanding
         shares  of common  stock  are held of record by less than 300  persons.
         Consequently,  the  reverse  stock split is not  necessary  to meet the
         threshold described in Rule  13e-3(a)(3)(ii)(A).  Finally,  the Company
         presently  intends for its common stock to continue to be quoted on the
         over the counter  bulletin board,  and has taken no action intending to
         cause such quotation to cease in connection  with or as a result of the
reverse stock split.                                          

3.       YOU STATE  THAT YOU "HAVE NO  CURRENT  ARRANGEMENTS  TO ENTER  INTO ANY
         STOCK  OFFERINGS OR STRATEGIC  TRANSACTIONS."  REVISE TO ALSO  DISCLOSE
         WHETHER YOU  PRESENTLY  HAVE ANY PLANS,  PROPOSALS OR  ARRANGEMENTS  TO
         ISSUE ANY OF THE NEWLY AVAILABLE  AUTHORIZED SHARES OF COMMON STOCK FOR
         ANY PURPOSE,  INCLUDING FUTURE  ACQUISITIONS  AND/OR FINANCINGS,  OTHER
         THAN YOUR  DISCLOSED  PLAN TO RESERVE SHARES FOR THE NOTES AND WARRANTS
         ISSUED IN YOUR SEPTEMBER 26, 2005  TRANSACTION.  IF SO, PLEASE DISCLOSE
         BY   INCLUDING   MATERIALLY   COMPLETE   DESCRIPTIONS   OF  THE  FUTURE
         ACQUISITIONS AND/OR FINANCING  TRANSACTIONS.  IF NOT, PLEASE STATE THAT
         YOU  HAVE  NO  SUCH  PLANS,  PROPOSALS,  OR  ARRANGEMENTS,  WRITTEN  OR
         OTHERWISE,  AT THIS  TIME TO  ISSUE  ANY OF THE  ADDITIONAL  AUTHORIZED
SHARES OF COMMON STOCK.                                       

         The Company does not have any plans, proposals or arrangements to issue
         any of the newly  available  authorized  shares of common stock for any
         purpose.  The  Company  has  revised  the final  sentence of the fourth
         paragraph  under the caption  `Reasons  for the  Reverse  Split' in the
Proxy Statement to read as follows:                           

         "We have no current  agreements  to enter into any stock  offerings  or
         strategic  transactions,  nor do we presently have any plans, proposals
         or  arrangements,  written  or  otherwise,  to issue  any of the  newly
         available authorized shares of common stock for any purpose,  including
         future  acquisitions  and/or financings,  other than in connection with
         the exercise of the warrants  issued  pursuant to the  extension of the
         maturity  date of our  secured  convertible  promissory  notes  and the
conversion of such secured convertible promissory notes."     

4.       PLEASE  REFER  TO  RELEASE  NO.   34-15230  AND  DISCUSS  THE  POSSIBLE
         ANTI-TAKEOVER EFFECTS OF THE INCREASE IN AUTHORIZED SHARES. PLEASE ALSO
         DISCUSS  OTHER  ANTI-TAKEOVER  MECHANISMS  THAT MAY BE  PRESENT IN YOUR
         GOVERNING  DOCUMENTS  OR OTHERWISE  AND WHETHER  THERE ARE ANY PLANS OR
PROPOSALS TO ADOPT OTHER                                      

CORRESP
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Securities and Exchange Commission                                              
November 2, 2005                                                                
Page 4                                                                          

         PROVISIONS  OR ENTER INTO  OTHER  ARRANGEMENTS  THAT MAY HAVE  MATERIAL
         ANTI-TAKEOVER  CONSEQUENCES.  INFORM HOLDERS THAT MANAGEMENT  MIGHT USE
         THE ADDITIONAL SHARES TO RESIST OR FRUSTRATE A THIRD-PARTY  TRANSACTION
         PROVIDING AN ABOVE-MARKET  PREMIUM THAT IS FAVORED BY A MAJORITY OF THE
INDEPENDENT STOCKHOLDERS.                                     

         The Company has included a new section in the Proxy Statement, entitled
         "Potential Anti-Takeover Effects," to disclose the potential use of the
         additional   authorized  shares  for  anti-takeover   purposes  and  to
         otherwise address the Staff's comment. Please note that the Company has
         no present intention of amending and/or supplementing the anti-takeover
mechanisms present in its governing documents.                

5.       YOUR REVERSE STOCK SPLIT PROPOSAL FALLS WITHIN ITEM 12 OF SCHEDULE 14A.
         PLEASE  PROVIDE  US YOUR  ANALYSIS  AS TO WHY  YOU  HAVE  NOT  INCLUDED
         FINANCIAL STATEMENTS PURSUANT TO ITEMS 12(F) AND 13(A) OF SCHEDULE 14A.
         WE NOTE THAT  INFORMATION  "NOT  MATERIAL  FOR THE  EXERCISE OF PRUDENT
         JUDGMENT  IN REGARD TO THE  MATTER  TO BE ACTED  UPON MAY BE  OMITTED."
         PLEASE ADDRESS WHETHER  FINANCIAL  STATEMENTS WOULD BE MATERIAL TO YOUR
         STOCKHOLDERS  IN  DETERMINING  THEIR VOTE FOR THE  REVERSE  STOCK SPLIT
PROPOSAL.                                                     

         The Company has concluded that the inclusion of financial statements in
         the proxy statement would not be material to the Company's stockholders
         for the exercise of prudent judgment in determining  whether to approve
         the reverse stock split proposal. The sole effects of the reverse stock
         split on the Company's financial  statements will be a reduction in the
         Company's stated capital and an increase in additional  paid-in capital
         of an equivalent  amount,  and  adjustments to the Company's  income or
         loss per share and  statement  of  stockholders'  equity or  deficit to
         account for the reverse stock split.  The Company does not believe that
         these   changes  are  material.   Rather,   the  Company  has  provided
         information  it  believes  to be  material  to the  exercise of prudent
         judgment  by the  Company's  stockholders  in  determining  whether  to
         approve the  reverse  stock  split--namely  information  regarding  the
         impact  of the  reverse  stock  split  and the  Company's  reasons  for
effectuating the reverse stock split.                         

 * * * * *

The Company acknowledges that:                                

         o        the Company is  responsible  for the  adequacy and accuracy of
the disclosure in the filing;               

CORRESP
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Securities and Exchange Commission                                              
November 2, 2005                                                                
Page 5                                                                          

         o        staff  comments or changes to  disclosure in response to staff
                  comments  do not  foreclose  the  Commission  from  taking any
action with respect to the filing; and      

         o        the Company may not assert staff  comments as a defense in any
                  proceeding initiated by the Commission or any person under the
 federal securities laws of the United States.

         We hope the above has been responsive to the Staff's  comments.  If you
have any questions or require any additional  information  or documents,  please
telephone the undersigned at (818) 444-4502.                                    

                Sincerely,

                          /s/ John J. McIlvery
                            ----------------------
                      John J. McIlvery

cc:      Kevin Bermeister                                                       
Anthony Neumann                                               

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘CORRESP’ Filing		Date		First		Last			Other Filings
Release Delayed to:		7/12/06							UPLOAD
		11/2/05		1		5			PRER14A
Filed on:		11/1/05
		10/26/05		1
		10/25/05		1					8-K
		10/10/05		1		2
		9/26/05		3					8-K
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