e.Digital Corporation (fka EDIG)

[cksla]

9/3/02 Bankruptcy judge blocks sale of Napster to Bertelsmann


SAN FRANCISCO (AP) - A bankruptcy judge blocked the sale of Napster Inc. to Bertelsmann AG, killing a deal that might have revived the former song-swap service as a legitimate music-sharing network.

Judge Peter J. Walsh made the ruling Tuesday in Wilmington, Del., according to spokeswomen for both Bertelsmann and Napster.

Bertelsmann had sought to purchase the remains of the defunct Napster network for an additional $8 million after having already sunk $85 million into the Redwood City-based company to keep it afloat. Napster has been off line for more than a year and filed for bankruptcy in June.

Suits by several major record labels effectively destroyed Napster. Those record companies also filed motions in the bankruptcy case, vigorously objecting to the sale of the company to Bertelsmann, Germany's biggest media company.