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Valparaiso Univ. Law School

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Tuesday, June 19, 2012

Former Napster CEO Sues Best Buy in Connection with Sale to Rhapsody

As reported in the Minneapolis/St. Paul Business Journal, former CEO of Napster, Christopher Gorog, filed suit May 31, 2012 against Best Buy in the U.S. District Court in Minneapolis alleging breach of contract, unjust enrichment and breach of good faith and fair dealing, claiming the electronics chain has failed to honor his 2008 employment agreement.  Gorog claims that Best Buy did not honor the terms of his severance agreement and short-changed him when it sold off Napster to Rhapsody in 2011.

Gorog was chief executive of Roxio when it acquired the music sharing service, Napster, which the Business Journal characterizes as "copyright violating" until Gorog turned it into a "legitimiate business" with annual music sales of over $100 million (we are shocked, shocked to learn that there were copyright violations associated with Napster). 

Best Buy bought Roxio/Napster in 2008 for $121 million, and Gorog became a Best Buy employee. Gorog now alleges that he was to be paid up to $5.8 million if Best Buy sold or shuttered Napster before March 2012.   Gorog left the company in 2009 after unsuccessfully trying to convince execs to continue investing in Napster. He now claims that the sale of Napster to Rhapsody was designed to prevent him from getting his fair share from the deal.

We have not been able to locate the complaint, but we think it looks something like this:

 

[JT & Christina Phillips]

 

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