Napster files for Chapter 11
Paves way for Bertelsmann
apster Inc has filed for Chapter 11 bankruptcy protection in a Delaware court. The once wildly popular music sharing service operator, which has been offline for about a year, has made the move in order to restructure as a subsidiary of German media firm Bertelsmann AG.
Bertelsmann bought Napster's assets for $8m three weeks ago, bringing to an end Napster's life as an independent concern. According to Reuters, court papers show Napster has assets of $7.9m, and debts of $101m, about $91m of which is due to Bertelsmann itself.
Napster has been ostensibly trying to develop a legal, subscription-based service since early 2001, but the legal, financial and technical setbacks have been manifold. In the time since its closure last July, other peer-to-peer services, such as Gnutella and Kazaa, have emerged to replace it, and legal services such as MusicNet have been launched.
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