Scour, an internet file sharing service similar to Napster, has
filed for bankruptcy protection in a Los Angeles court which means
the company can continue its web site services while suspending the
litigation that has been brought against it.
While Napster’s service only lets its members transfer MP3 music
files, Scour’s members can transfer both music and movie files.
Lawsuits were brought against Scour by members of both the music
and movie industries, including Walt Disney, 20th Century Fox, Sony
Pictures Entertainment and MGM who argue that the Scour service is
used for the exchange of pirated material.
Scour has filed for what is known as Chapter 11 protection, a
reference to part of the US bankruptcy code that allows the company
to continue operating. Filing under Chapter 7 would indicate the
immediate demise of a company.
Scour’s president, Dan Rodrigues, said:
“We took this step in order to perserve
Scour’s future. The Chapter 11 process will also provide our
management and board of directors with adequate time to review and
develop re-capitalisation and restructuring alternatives to
strengthen and improve Scour’s business position.”
