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NOTES FROM THE NET

Oct 1, 2002 12:00 PM, COMPILED BY SARAH BENZULY

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This Month in Mix

NAPSTER PERMANENTLY OFFLINE

A Delaware bankruptcy court denied the bankrupt Napster its $92 million proposed sale to Bertelsmann AG.

Chief Judge Peter J. Walsh of the U.S. Bankruptcy Court in Wilmington refused to allow the sale after Bertelsmann could not come up with enough evidence to show that its investment was made in good faith and not as an equity stake in Napster.

The online start-up has laid off most of its staff — including co-founder Shawn Fanning. Napster CFO Carolyn Jensen will stay onboard to prepare a Chapter 7 bankruptcy filing to liquidate the company's assets.

Bertelsmann would have provided about $10 million in cash to creditors, reports said. Bertelsmann said that it would forgive more than $85 million in other loans.




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