Napster wins approval for $5.1 million debtor-in-possession loan

Napster has won approval for bankruptcy protection against a $5 million loan from shareholder BMG. It means Napster can use the money to fund business operations and a key employee retention plan, without the company's £11 million of debtors grabbing the cash. Napster was unable to win approval, however, for complicated bid procedures in connection with the proposed sale of all its assets to Bertelsmann in a deal valued at $92m. If the sale is approved Napster expects to have as much as $10.3m in cash to go to unsecured creditors, meaning a 93% pay back. But BMG say if said procedures aren't cleared the sale may not go ahead.