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Lookout! Records the venerated Berkeley, California-based indie through which some of the first recordings by Green Day, Operation Ivy, Rancid and the Donnas were released laid off its staff on Tuesday in the wake of Green Day’s recent decision to reclaim its catalog releases from the long-running punk label.

According to Lookout! publicist Tristin Laughter (whose eight-year stint with the label ends September 1), the label has long been behind in royalty payments to Green Day from the sale of four of the band’s early releases: 1989’s 1,000 Hours EP, 1990’s Slappy EP, 1991’s 1,039/Smoothed Out Slappy Hour and 1992’s Kerplunk. Green Day has regained control of the masters for all four recordings.

Laughter emphasized, however, that the relationship between the band and the label has been and remains “very warm and amiable.”

“There’s no acrimony,” she said. “From Lookout!’s perspective, Green Day was way more than reasonably patient. Lookout! got so delinquent in paying the royalties that Green Day was forced to say, ‘We can’t continue to float this. We need to put these albums somewhere where we can reliably get the royalties.’ But Lookout! was their original home, and they have nothing but affection for them.” Green Day has not filed any legal action against Lookout! to recoup the delinquent royalty payments, she said.

The label’s owners President Chris Appelgren, Vice President Molly Newman and General Manager Cathy Bauer have suspended all artist signings and new releases for the foreseeable future, and may need to sell the building that houses the label’s offices to settle its debts. Most of the six laid-off employees will continue working at the label until August 15. However, Newman said the label hopes to regain its footing and is considering its options. Lookout!’s most recent releases are the Hockey Night’s Keep Guessin’ and Troubled Hubble’s Making Beds in a Burning House.

Green Day’s current label, Reprise, did not respond to e-mails requesting a comment from the band, which is the latest of several acts to break away from the label. In recent years, previous Lookout! artists Screeching Weasel, Avail, Pansy Division, the Riverdales, the Lillingtons and Enemy You have rescinded their master rights from the label, citing, like Green Day, breach of contract over unpaid royalties.

“The label is going to have to regroup and rebuild,” Laughter said. “The Green Day catalog has been the bedrock of the business.”

As Green Day’s American Idiot has became one of the past year’s biggest sellers, sales of the band’s catalog have increased dramatically. According to SoundScan, 1,039/Smoothed Out Slappy Hour has sold more than 568,000 copies, scanning on average 900 copies per week this year. Kerplunk, which has scanned more than 685,000 copies since its initial release, averages weekly scans between 700 and 800. The label’s third-best-performing catalog disc, Operation Ivy’s Energy, has scanned more than 419,000 copies since its release back in 1990, and averages between 300 and 400 in weekly sales.

Where the master recordings will end up has not yet been announced. Laughter said it’s possible Adeline, Green Day frontman Billie Joe Armstrong’s imprint, or Warner Music Group (home of Reprise) could wind up releasing them.

In a statement on the label’s Web site, Appelgren wrote that “Lookout! Records is proud to have been Green Day’s first home,” and that “despite any rumors or conjecture to the contrary, Lookout! and Green Day’s long relationship has always been based on trust, friendship and partnership, and those bonds remain shared between the label and the band now and into the future.”