Listen.com Bids to Acquire Scour Assets
Coming on the heels of the Bertelsmann agreement to fund the legitimate makeover of Napster, Listen.com (www.listen.com), has announced that they are bidding to acquire the assets of Scour Inc., (
www.scour.com). Listen has filed a bid in the U.S. Bankruptcy Court for the Central District of California in Los Angeles, for an offer consisting of 527,918 shares of Listen.com preferred stock and $5 million, minus certain legal costs, in cash.
Under the rules of the bankruptcy court, the offer must still be subject to a window of competitive bidding before final approval. With the full support of the management of both companies, Scour and Listen's boards of directors have already approved the asset sale.
"We are committed to providing the best solutions for the delivery of legal digital media. By incorporating certain Scour assets into our service, Listen.com will soon be able to provide the most complete digital media search capabilities to our syndication partners and consumers," stated Rob Reid, Listen's founder and chief executive officer, in a statement.
Reid also stressed that, pending the court's approval, Listen will acquire only the assets of Scour, which was sued by the Motion Picture Association of America (MPAA), the Recording Industry Association of America (RIAA) and the National Music Publishers Association (NMPA) over allegations of copyright infringement in July. Under the financial pressures of the legal fight, Scour filed its voluntary Chapter 11 petition in the U.S. Bankruptcy Court on October 12, 2000.
The Bankruptcy filing automatically stays all pending litigation against the company. According to a Listen spokesman, a successful acquisition will leave Scour in existence as a shell company with absolutely no technological assets. The shell company will remain as the target of the pending legal lawsuit, which will likely be dropped if Listen implements a benign use of the technology in the eyes of the recording industry.
Listen's financial backers include all five major labels, and the site has long been viewed as highly respectful of digital copyrights. Listen may well follow the industry trend and develop Scour's popular peer-to-peer network, Scour Exchange, into a subscription-based model. For fans of Scour's free services, the news is bittersweet. While Scour has been saved from impending bankruptcy, Listen will most certainly end any trading of files which would anger its financial backers and endanger its future.