Ovitz-Backed Internet Co. Bankrupt
Monday, October 16th 2000, 12:00 am
By: News On 6
LOS ANGELES (AP) â€” An online multimedia company backed by a former Disney executive has filed for protection from creditors in federal bankruptcy court.
Scour Inc., whose backers include former Disney president and agent Michael Ovitz, is facing at least two lawsuits and last month laid off most of its 70 employees.
The Chapter 11 filing Thursday in federal Bankruptcy Court will give the company time to reorganize and grant it protection from mounting legal and financial problems. A reorganization plan must still be approved by its creditors and the court.
The Motion Picture Association of America and the Recording Industry Association of America in July sued the company alleging copyright infringement.
Scour was created in 1997 by a group of UCLA students who created an online system for finding multimedia files. Ovitz and the Yucaipa Cos., an investment firm, gained a majority stake in the company in 1999 and moved its offices to Beverly Hills.
Scour had been searching for additional funding, but the lawsuits brought by the two entertainment industry giants kept potential investors away.
The plaintiffs in the case are seeking damages of $150,000 for each copyright work infringed and damages could reach $225 billion.
The software company's file sharing technique is similar to Napster Inc., but goes beyond music files to allow the swapping of a variety of multimedia products, including songs, movies, photographs and other images.
Scour will continue to make its products and services available during the Chapter 11 process, president Dan Rodrigues said in a statement.
On the Net:
Scour Inc.: http://www.scour.com