SAN FRANCISCO — A Delaware bankruptcy judge has blocked the sale of Napster’s remaining assets to the song-swap company’s chief investor, Bertelsmann AG, marking the death of a deal that might have revived the service as a legitimate music-sharing network.
Judge Peter Walsh made the ruling Tuesday, according to spokeswomen for Bertelsmann and Napster. Walsh cited conflicting loyalties by Napster’s top executive as the reason for killing the deal.
Bertelsmann had sought to purchase the remains of the defunct Napster network for an additional $8 million after having already sunk $85 million into the Redwood City-based company to keep it afloat. Napster has been off line for more than a year.
Suits by several record labels destroyed Napster. Those record companies also filed motions in the bankruptcy case, vigorously objecting to the sale of the company to Bertelsmann.
Napster CEO Konrad Hilbers, a Bertelsmann veteran, said the judge’s decision likely will force Napster to change its reorganization effort into a Chapter 7 liquidation.