Los Angeles –, the music service that filed for
bankruptcy earlier this month, owes the major record labels a combined $25
million, but hopes to emerge from the process and raise a new round of equity
financing, CNET reports. All of the major labels except Sony filed
copyright infringement suits against the service, which allows users to create
and share playlists of streaming Web songs — including songs from unauthorized

Unable to meet payments on its debts of $16.6 million in licensing
fees to Universal Music, $4.1 million to Warner Music, $3.1 million to Sony
Music, and $2.1 million to EMI, filed for Ch. 11 bankruptcy

Several of those licensing deals have apparently been terminated, CNET reports, meaning
those labels’ songs will likely disappear from the service.

However, told the bankruptcy court it plans to “complete a new round
of equity financing,” once it emerges from Ch. 11, to pay its debts to the


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(DMW previous coverage)