Digital rights firm sez amount will exceed current offers

HOLLYWOOD — As Tuesday’s deadline for Scour‘s assets approaches, Liquid Audio has thrown its hat into the ring of bidders to take over the online file-sharing venture backed by Michael Ovitz.

Liquid Audio’s decision now pits it against CenterSpan Communications and Listen.com for Scour’s popular but controversial technology, which enables Netizens to swap digital music and video files over the Web, similar to Napster. Seven million people downloaded the Scour Exchange software by the time it was removed from the site in November.

Like Scour’s other bidders, digital rights management firm Liquid Audio would rather buy a music file swapping technology that is already a hit on the Web, rather than start from scratch. Listen.com was the first to emerge as a genuine bidder for the assets, offering $5 million and additional stock for the rights to Scour’s technology and engineering team.

Liquid’s bid

Liquid did not say how much it intends to bid, but says it exceeds Listen and CenterSpan’s offer. Should it win Scour’s assets, Liquid Audio would also assume Scour’s $4 million in outstanding debt, not including any possible judgment resulting from a copyright lawsuit.

But Liquid’s attempt may come too late. The court deadline for entering the auction closed last Tuesday. A judge in the U.S. Bankruptcy Court for the Central District of California in Los Angeles, where Scour filed for bankruptcy protection, must now approve Liquid’s bid. The court’s auction of the assets concludes Dec. 12.

Trying to bolster its bid, CenterSpan last week announced that it has secured an additional $10 million round of financing from an undisclosed investor, who acquired nearly 1.5 million shares of the Oregon-based company.

“The additional capital will assist us in funding our intended acquisition of Scour, as well as further enabling our growth strategy for our new digital distribution channel,” said CenterSpan’s chairman and CEO Frank Hausmann.

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