Songwriters Object to Planned Napster Deal
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A group of songwriters and music publishers objected to Bertelsmann’s planned purchase through Bankruptcy Court of the assets of song-swapping service Napster Inc.
The filing by Jerry Leiber, Mike Stoller and others sets up a fight at a hearing scheduled for Thursday in federal Bankruptcy Court in Delaware over whether the Bertelsmann deal should go through. Bertelsmann is offering $9 million in cash for creditors on top of more than $85 million in previous loans.
The songwriters wrote that they are objecting to the transaction “based primarily on Bertelsmann’s domination and control of [Napster], its inequitable and collusive conduct and [Napster’s] unlawful actions.”
“We don’t want the $85 million to be counted,” said an attorney for the writers, Aidan Synnott. “The $85 million has chilled the bidding process. There has to be a do-over of the bidding.”
Napster’s creditors failed last week to get other bidders to step forward and offer at least $25 million.
A Napster representative predicted the bankruptcy judge will approve the Bertelsmann sale, since it would bring in some new money for creditors.
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