The most recent bidding in the auction for the remaining assets of the bankrupt file-swapping service Napster Inc. closed late Tuesday and the process of sorting through those offers has begun.
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“There were over two dozen inquires from around the world with two additional bids put forward in the court hearing on Friday. There are less than 12 formal bids and we are now determining which one of those bids has the highest probability of closing. Our goal is to present that bid to the bankruptcy court in Delaware on Sept. 27,” said Rick Chance, managing director of Investment Banking at Trenwith Securities LLC.
Trenwith, the company conducting the auction for Napster, is a wholly owned subsidiary of BDO Seidman LLP, with headquarters in Costa Mesa, California.
Chance declined to name the companies bidding for the remaining assets of Napster, though one bidder, Private Media Group Inc., an adult entertainment media company based in Barcelona, Spain, last week made public its offer of 1 million shares of common stock in exchange for the Napster trademark and Napster.com domain name.
Earlier this month, Judge Peter Walsh of the U.S. Bankruptcy Court for the District of Delaware, in Wilmington, Delaware, blocked the sale of Napster’s assets to media giant Bertelsmann AG, due in part to objections from record labels and music publishers.
Along with its brand, Napster’s remaining assets also include its technology for file sharing and DRM (digital rights management). “Because the assets of Napster has always mainly been the intellectual property and the technology, its primary assets are still intact oddly enough. There are also the hard assets, as well as the management team and employees. Though most of the employees are gone, some have expressed an interest in being rehired by the new owners,” Chance said.
According to Chance, some of the bidders for Napster’s assets have “very interesting business models” that make use of the file swapping technology. “Some of the business models involve music sharing in a way that would not require music labels to authorize the use of content, and some of the models are non-music related. There were really a wide range of bids from all over the world,” Chance said.