Napster Likely to Be Sold to Roxio
The song-swapping technology, brand and Web site of Napster Inc. probably will be sold to Roxio Inc. on Wednesday, now that a potential rival bidder has missed Friday’s deadline to top Roxio’s offer of $5 million and stock warrants.
The unidentified second bidder had told the trustee handling Napster’s bankruptcy filing that it planned to bid but called just before the afternoon deadline to say it needed more time.
“I said, ‘Time is up, for good or ill,’ ” trustee Hobart Truesdell said. “We did not receive the bid that was indicated to me was forthcoming.”
Truesdell said he expected final objections to the sale to be filed Monday by former Napster Chairman John Fanning, Napster creditor PlayMedia Systems Inc. and perhaps Friday’s unidentified near-bidder.
The objections will be considered at a hearing on the sale in Delaware Bankruptcy Court on Wednesday morning.
“If they are overcome, then a closing will occur right after the hearing ends,” Truesdell said.
Santa Clara, Calif.-based Roxio has not detailed its plans for Napster’s assets but has pledged that whatever it does would honor music copyrights.
Napster filed for bankruptcy protection while it was losing a record industry lawsuit that claimed that Napster’s peer- to-peer file-swapping system helped millions of computer users steal copyrighted songs.
At the time, Napster was testing a second-generation system that allowed for payments and restrictions on the use of song files.
Roxio sells programs that allow users to record encrypted songs, unencrypted MP3s and other types of files on CDs. Its software is installed on 100 million personal computers.
Investment banker Rick Chance, who spent weeks explaining Napster’s assets to Roxio and other interested parties, said he doubted that the judge would put off the sale’s closing.
In a separate proceeding, Napster’s machines, memorabilia and other hard assets will be auctioned Dec. 11. Even after the sales, Napster’s bankruptcy case will continue into next year.