Napster Judge Allows More Time for Bids

Napster Inc. creditors won two more weeks to solicit bids for the company’s assets and stave off liquidation. U.S. Bankruptcy Judge Peter Walsh delayed ruling until Sept. 27 on a motion by federal officials to shut the firm down for good.

A committee of unsecured creditors, including one of Napster’s former law firms, said bid solicitor Trenwith Securities had received strong “expressions of intent” from companies willing to bid millions of dollars for Napster’s technology and other assets.

Napster Chief Financial Officer Lyn Jensen probably will remain the Redwood City, Calif., company’s sole employee until the bids are firmed up and the creditors “pick a horse to ride” from among them, said creditors’ attorney Scott Cousins.

The song-swapping service filed for Chapter 11 bankruptcy reorganization in June after judges ordered the service shut during a copyright infringement suit by music publishers and the major record labels.

Chief Executive Konrad Hilbers laid off nearly all Napster employees and resigned last week after Walsh blocked a planned asset sale to German media conglomerate Bertelsmann.

Joseph Menn