Liquid Audio Sued by Bertelsmann Unit
A Bertelsmann unit sued Liquid Audio Inc., accusing the money-losing Internet music provider of planning to distribute $58 million in dividends illegally instead of saving the money for creditors.
Liquid Audio said it would pay a $2.50-a-share dividend, according to a lawsuit filed in Delaware by BeMusic Inc.
BeMusic says it licensed software in 1999 from Liquid Audio, which agreed to pay $20 million in potential damages and half of defense costs if BeMusic loses a patent-infringement lawsuit.
Shares of Liquid Audio fell 20 cents to $2.55 on Nasdaq.
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