[Am-info] Napster Files For Chapter 11

[Fred A. Miller]

Napster Files For Chapter 11

Napster Inc., the one-time maverick that angered
recording-industry executives by setting off a frenzy of
free-music swapping over the Internet, filed for Chapter 11
bankruptcy Monday. The music file-sharing service boasted 60
million users in its heyday.

The bankruptcy filing comes weeks after Napster agreed to sell
its assets to music-industry leader Bertelsmann AG for $8
million. The deal also calls for Bertelsmann to assume certain
liabilities, according to papers filed in a Wilmington, Del.,
court. Those liabilities include any new loans to Napster and
forgiveness of the $91 million owed to Bertelsmann before the
filing, Napster's bankruptcy lawyer, Rick Cieri, says. After the
bankruptcy process is completed, Bertelsmann will take control of
Napster, unless there's a higher bid from another company. As of
April 30, Napster had $7.9 million in assets and $101 million in
liabilities.

The record industry sued Napster for copyright infringement,
forcing the company to shut down its service in July 2001. Since
then, the five major recording companies have refused to sign
licensing deals with Napster, which has been trying to build a
legitimate service. Instead, record companies have launched their
own services but have had little success finding a paying
audience. - Antone Gonsalves

For more on the online music market, see:
Betamax Defense Won't Cut It For Music-Swapping Site Operators
http://update.informationweek.com/cgi-bin4/flo?y=eHZh0Bce7K0V20BacL0AN

Industries Clash Over Anti-Copying Legislation
http://update.informationweek.com/cgi-bin4/flo?y=eHZh0Bce7K0V20Bdjt0AD

-- 
Fred A. Miller
Systems Administrator
Cornell Univ. Press Services
fm@cupserv.org, www.cupserv.org
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