Bertelsmann, parent of label group BMG, has reached an agreement to acquire the assets of embattled online file sharing service Napster, Billboard Bulletin reports. In a surprise turn of events, found
Bertelsmann, parent of label group BMG, has reached an agreement to acquire the assets of embattled online file sharing service Napster, Billboard Bulletin reports. In a surprise turn of events, founder Shawn Fanning, CEO Konrad Hilbers, and the other key members of the company's management team will remain in the posts they had resigned at the beginning of the week.
Under terms of the deal, Bertelsmann -- which has already invested more than $85 million in Napster -- will give the company $8 million to pay its creditors and Hilbers will assume the role of chairman of the board. The pact marks a sharp reversal of fortune for the peer-to-peer network, which was teetering on the brink of bankruptcy just days ago after the company's board rejected a Bertelsmann buyout offer and its senior management team resigned in protest.
The companies credit the turn-around to a Delaware Chancery court action on Tuesday that affirmed the authority of Napster's board, controlled by venture capital firm Hummer Winblad. John Fanning, uncle of Shawn Fanning, was at odds with Hummer Winblad over control of the Napster board and the allocation of funds.
Napster has been offline since July 2001 while fighting copyright infringement suits brought against it by the major record labels.