"Unfortunately, the funding situation of Napster does not allow us to complete our plans for now. But, be reminded: A cat has nine lives."
——Konrad Hilbers


Ex-Swapco Further Stymied by Execs' Departure, Financing Woes
Is it over, at long last?

Napster CEO Konrad Hilbers has exited his post and resigned from the netco’s board, citing differences with other board members over a proposed financing deal. Founder Shawn Fanning and several other key execs have reportedly followed suit.

The German exec has struggled to balance Bertelsmann’s commitment to transforming the once-feared music-sharing app into a copyright-friendly service against music-biz reluctance to settle with the old version and license music to the new. Evidently, his attempts to help Bertie buy out what remains of the firm were in vain.

Wired also reports that the netco's 70 remaining staffers have been offered either severance pay if they depart immediately, or an unpaid week's leave while the company attempts to secure new funding.

"It is with great regret that I am announcing my resignation as CEO of Napster today," reads Hilbers’ farewell memo to staffers, which was obtained by HITS. "I will also step down from my board position at this stage.

"The entire management team has worked hard to find funding for Napster," the statement elaborates. "We have put together what I consider to be a valid and beneficial deal for Napster over the last weeks. This deal would have allowed [us] to keep the company's assets, including its employees, together in the long term. Unfortunately, the board has chosen to not pursue the deal. I am not agreeing with the majority of the board in this instance. I am convinced that not pursuing the offer is a mistake and it will lead the company to a place where I don't want to lead it.

"It was an incredible honor for me to work for Napster throughout this phase," Hilbers adds. "We have achieved significant progress. The negotiations with the labels and the publishers, the turnaround in the litigation, the launch of a fully functional beta product, the respect we have achieved in Washington and other place, all of that we can be very proud of. Unfortunately, the funding situation of Napster does not allow us to complete our plans for now. But, be reminded: A cat has nine lives.

I would like to thank all of you for your efforts. Your continued commitment to the company was truly exceptional. I wish you and Napster good luck."

Meanwhile, The Wall Street Journal reports the once-mighty online company is now pondering a Chapter 11 filing; sources at the company would only say that no such plan is in place at present.

Napster further refused to comment about who might replace Hilbers or when such an appointment might be made.

"We appreciate the contribution made by Konrad Hilbers as CEO of Napster," a company release reads. "We deeply regret that we have not yet been able to find a funding solution that would allow Napster to launch a service to benefit artists and consumers alike. We will be looking at additional steps in the coming week to further reduce expenses."

Napster let go some 30% of its staff recently. Area cats declined to comment.