No young band on the cusp of moving from regional act up to buzzed indie-community entity wants to suddenly hear that their label is going under. But that's exactly the position in which Atlanta/Athens group Morning State found itself last year, when Georgia-based underground label Livewire announced it would be unable to finance the combo's already-in-the-can debut album You Know People I Know People.

"I think we had put ourselves in a position where we were kind of counting on that," says singer/guitarist Russ Ledford. "It was a little bit of a freak-out moment, but it turned out to be a good thing."

Instead of negotiating to buy back their own completed CD to shop to other labels, or writing it off completely, Ledford and his bandmates took a long, hard listen to the fruit of their labors ... then shitcanned that version, and headed into the studio with producer/engineer Asa Leffer (The Whigs, Jet by Day, Dark Meat, Summer Hymns) to re-record the whole thing on their own dime.

"Creatively speaking, it was a really good opportunity," Ledford says. "Financially, it put us back a bit. But at the end of the day, it's ours, we own it, and that's all there is to it. So I don't regret it."

It's the rare musician who, listening to his or her own records, doesn't find all kinds of little things they would change if given the chance. Well, Morning State actually got that chance. And Ledford thinks the resulting version of You Know People I Know People, released in May, is both better and more representative of the band than its predecessor.

"I think both were pretty good," he says. "We decided there were things we wanted to change and do differently. There's a couple of things on this album that weren't going to be on the Livewire album, different arrangements, different guitar patterns. Overall, it's a little more energetic, we goosed some tempos, fixed whatever problems we found."

The band was already enjoying a fairly high hype quotient following performances at last year's CMJ festival, and the familiar yet edgy mix of garage-, post- and pop-rock that dominates You Know People I Know People should draw in plenty of folks looking for something that's both accessible and intrinsically cool. Morning State's sound has been drawing comparisons to everything from The Strokes' inebriated swagger to harder bands like Sparta and lighter ones like The Shins, but Ledford claims they're more interested in garnering new fans from all over the sonic map than becoming associated with any particular scene.

"We have friends from all over, and I don't think we're too bothered or hung up on that idea," he says. "We just put it out there, and hopefully it'll find a place, you know?"

myspace.com/morning state