Napster Files for Chapter 11
Napster Inc. filed for Chapter 11 bankruptcy protection Monday, seeking court protection from creditors as music industry heavyweight Bertelsmann AG follows through on a plan to take over what’s left of the company.
The Internet music-swapping service has agreed to sell its assets to Bertelsmann for $8 million in cash and the assumption of certain liabilities, according to papers filed in a Delaware court, Dow Jones reported.
Calls to a Napster spokeswoman were not immediately returned Monday.
Bertelsmann said May 17 it would buy Napster for $8 million ó slightly more than half what it had previously offered to purchase the company ó to pay Napster’s creditors as part of a financial reorganization. Napster’s board rejected that offer.
The bankruptcy filing is the swan song for a company that three years ago set off a frenzy of online song-swapping that attracted millions of users, as well as the ire of the recording industry, which sued for copyright infringement.
At its peak, Napster boasted some 60 million users and seemed at once to symbolize both the excitement of the digital revolution and the worst nightmares of the established recording industry.
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