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Pandora To Buy Rdio Assets For $75M In Cash (techcrunch.com)
An anonymous reader writes: Pandora is acquiring music subscription service Rdio for $75 million in cash. "The transaction is contingent upon Rdio seeking protection in the United States Bankruptcy Court for the Northern District of California. Upon approval of the proposed transaction by the bankruptcy court, Rdio will be winding down the Rdio-branded service in all markets," Pandora said in a statement. TechCrunch reports: "That was fast: just as soon as it was reported that Pandora was in talks to buy Rdio, the two sides have confirmed that an acquisition is indeed taking place. Pandora has acquired "key assets" from Rdio for $75 million, the company has just announced. But as part of it, the Rdio service as we know it is tanking: the streaming service is shutting down and Rdio is filing for bankruptcy."
Bankruptcy is about cashflow, not assets. Most people would sell assets to prevent the bankruptcy, but that becomes a cashflow when you sell them.
Looks like Rdio has lots of debts, and no means to pay them off, but something worth $75M, so Pandora is buying something for $75M and that payment will go to the creditors of Rdio. Those creditors could stop the sale, but in practice never do, as their share of $75M is much higher than their share of the bankrupt company if it were divided and sold off in smaller pieces.
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