Thank you for sharing!

Your article was successfully shared with the contacts you provided.
A federal bankruptcy judge in Delaware will hear objections to Bertelsmann AG’s offer to purchase Napster today, as the auction for the bankrupt online music site was set to begin Wednesday with no additional proposals other than one from the German media conglomerate. Objections to the sale have been filed in the U.S. Bankruptcy Court for the District of Delaware in Wilmington and are set to be aired today, the same day a final sale hearing for the property is scheduled. Among the parties objecting are A&M Records Inc., Geffen Records Inc., Interscope Records, MCA Records Inc., Island Records Inc., Motown Record Co. LP, Capitol Records Inc., Universal Records Inc., Polygram Records Inc. and Virgin Records America Inc. David Stratton, attorney with Pepper Hamilton, which is representing the music companies, said he could not comment on the complaint because it is under seal. Stratton did say his clients don’t believe the sale meets the requirement of the bankruptcy code. The complaint is believed to center around the actual amount of Bertelsmann’s bid. While the German firm has made a $9 million bid for the assets, the amount being considered by the courts is for about $94 million because it includes an $85 million investment Bertelsmann made in Napster. Rick Chance, managing director of Trenwith Securities LLC, said last week that the $94 million figure effectively stifled any other interested parties from making a bid. Trenwith was hired by Napster creditors to drum up additional bids for the company, but was unable to line any up before an Aug. 21 deadline. Chance indicated that if the $85 million is viewed as an equity investment, it could reduce the minimum bid a new suitor would have to offer. If it is considered a secured loan, there likely would not be any additional bidders for the property. Stratton said none of the record companies has indicated any interest in bidding for Napster at this point. Napster shut down in July 2001, after major record labels convinced a federal judge that the company’s service violated copyright laws. �Copyright 2002, The Deal, LLC. All rights reserved.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.