SCOUR FILES CHAPTER 11

Troubled online company Scour, the Michael Ovitz-backed Internet venture that features Napster-like services, said Thursday (10/12) that it had filed for Chapter 11 bankruptcy protection to reorganize its business.

Scour said in a statement that it chose bankruptcy "in order to ensure its continued operation in the face of burdensome lawsuits." The filing stays pending litigation against the company.

According to company spokeswoman Dawn Rusalov, the company listed about $1.2 million in assets and $4 million in debt in its bankruptcy filing.

Scour President Dan Rodrigues said that during the bankruptcy process, all of Scour's products will be available to consumers.

Like Napster, Scour has been the target of several lawsuits from the entertainment community—20^th Century Fox, Sony Pictures, Walt Disney Co. and MGM to name just a few. The company could face as much as $250 billion in damages stemming from litigation against it, Rusalov said.

The company also faced a long list of vendors wanting to be paid for their services and recently laid off all but 12 of its 70 employees.

"We took this step in order to preserve Scour's future," Rodrigues said. "The Chapter 11 process will also provide our management and board of directors with adequate time to review and develop recapitalization and restructuring alternatives to strengthen and improve Scour's business plan."

Along with Ovitz, Scour's investors include Los Angeles businessman and grocery store magnate Ron Burkle. Together the two men invested $4 million in the service early last year, according to published reports.