Embattled MP3Tunes cloud locker files for bankruptcy

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San Diego-based digital music locker provider MP3Tunes has filed for bankruptcy protection after a lengthy battle with major label EMI. The filing, which was made at the end of April and is available in its entirety online (PDF), will put the ongoing court case on hold and could prevent a final judgement in the matter. CNet’s Greg Sandoval was first to report about the filing.

MP3Tunes was launched in 2005 by serial entrepreneur Michael Robertson, who had previously founded the pioneering music hosting site MP3.com. The service has been offering its users a cloud-based locker for their MP3 collections, complete with apps for mobile and connected devices. EMI sued MP3Tunes in 2007, alleging that the site facilitated copyright infringement. Robertson wrote a lengthy comment about the bankruptcy on his blog, which reads in part:

“EMI spent an estimated $10 million dollars with multiple law firms to arm their attack against MP3tunes in an attempt to thwart unlicensed personal lockers. They know it’s difficult if not impossible for startups to fight long costly legal battles. Their hope is that the startup cannot fund a protracted legal battle and they win by default. This happened with the music search engine Seeqpod, Muxtape, Favtape and many others that have quietly faded away. They know that even if the digital upstart prevails in court, they will be terminally weakened. Veoh won multiple rounds of their copyright battle outright only to be forced into bankruptcy after spending $7 million on legal bills.”

Robertson recently started another personal media service with potential for lots of controversy: Dar.fm offers users to record shows from radio stations across the country, store the files in the cloud and sync them with multiple devices. Dar.fm at least initially piggybacked on the MP3Tunes infrastructure, but Robertson told me via email that the bankruptcy of the music locker will have “no effect” on Dar.fm.

10 Comments

Meganesium

Robertson must be broke to file bankruptcy over a few million. I thought he was suppose to be worth millions? Stiffing a coffee vendor for $96, not cool. How does he find lawyers to even work with him?

DZanone

Robertson may be hoping to get out of his EMI litigation with this move, but EMI is suing him personally and will continue after him, even with MP3Tunes in bankruptcy. Being the former CFO of one one his other failed companies, Linspire, I predicted Robertson would blame the EMI lawsuit for the eventual demise of MP3tunes. As you’ll see from the filing, the REVENUES from MP3tunes hardly moved the needle, ever. MP3tunes was just another poorly executed business idea from Robertson. Linspire was another of his failures, approximately 100 shareholder never got a penny when it went down, yet on the MP3Tunes website, he spins it as a success by saying it was sold to Xandros. Robertson is a master with the slight of hands when trying save face on his failures. Remember, when dealing with Robertson’s shell games, keep your eye on the ball.

Scott

Wow! http://freespire.com I counted over FOURTY people who know Robertson (employees, shareholders, vendors, etc.) and who have come out publicly against him. If I had that many people who disliked me, I think I’d go hide under a rock (assuming you could find a rock that could stand being that close to Robertson =).

chadolson

All’s I can say, Michael, is Freespire.com. Enough said!
Is there any bridge you haven’t burned? I use to think you would die a rich lonely man, but it looks like you’ll die a poor lonely man. Sad life!

DaveF

Based on the filing, Robertson is sticking it to everyone from his lawyers ($1.4 million), to several employees ($10,775), to even the coffee vendor ($96). So, let me get this straight…Robertson is saying he doesn’t have $96 to pay a coffee vendor because of EMI? What a chump. I guess he’s broke and has blown all the money he got from the MP3.com fiasco. (MP3.com went public at $28 per share, and was dumped in a fire sale for $5 per share, sticking it to the many IPO investors while Robertson made off with millions.)

I also noticed in the MP3tunes bankruptcy filing, that the only secured creditor he lists was HIMSELF, through his SKL Trust. As usual, he makes sure that he ends up first in line while everyone else gets completely stiffed.

Even worse, innocent customers are STILL getting ripped off, as it appears he’s more than happy to keep selling subscriptions to his defunct company. Fortunately the media is now alerting would-be customers about this bankruptcy, since apparently Robertson isn’t. I can find no mention of the bankruptcy anywhere on the MP3tunes site, but I can find where they are still accepting $139.95 for annual subscriptions.

As I say, what a chump.

Noah

Why would I trust this guy with my money? He’s obviously a bad business man who makes poor choices.

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