Napster Files for Chapter 11 Mon Jun 3,11:00 AM ET
SAN FRANCISCO (AP) – Napster (news – web sites) Inc. filed for Chapter 11 bankruptcy Monday, seeking court protection from creditors as music industry heavyweight Bertelsmann AG (news – web sites) follows through on a plan to take over what’s left of the Internet music-swapping service.
Bertelsmann said May 17 it would buy Napster for $8 million â€¹ slightly more than half what it had previously offered to purchase the company â€¹ to pay Napster’s creditors as part of a financial reorganization that included plans to file for bankruptcy.
As of April 30, Napster had about $7.9 million in assets and about $101 million in liabilities, according to the filings made in Wilmington, Del.
Calls to a Napster spokeswoman were not immediately returned Monday.
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.