📸 Photo

mer stood firm. There was no board vote by Monday, and Middelhoff cut off Napster's funding that day as layoffs and bankruptcy neared.

The next day, Tuesday, May 14, 2002, everything happened at once. Fanning, Barry, and Hummer were all in Wilmington, Delaware, for an anticipated three-day trial on Fanning's lawsuit against his fellow directors. In Redwood City, Hilbers knew that layoffs were inevitable. Just past 9 A.M., he announced his resignation in an e-mail to the staff. "We have put together what I consider to be a valid and beneficial deal for Napster over the last weeks. This deal would have allowed [sic] to keep the company's assets, including its employees, together in the long term. Unfortunately, the board has chosen not to pursue the deal. I am not agreeing with the majority of the board," Hilbers wrote. An hour later and on the other side of the continent, the Delaware judge dismissed Fanning's suit without bothering to hear from any witnesses, ruling that the company's incorporation papers made it obvious that no one class of stock could convert everyone's shares.

Just before noon, Barry called the Napster office and was placed on a speakerphone as the staffers gathered for what they knew was coming. Barry said the company couldn't meet the payroll, and each of the seventy employees had a choice: get laid off or take a week of unpaid vacation in the hope that he could resurrect a deal. Few agreed to the vacation. As they milled around after the call ended, executive after executive resigned rather than wait for the bankruptcy liquidation that would come. "It was awful. People were glad to get out of there," one said. "Everyone thought John Fanning was a fuck and what he was doing was stupid and greedy, but in the end it was really an anti-Hank sentiment." Schwartz quit, as did Milt Olin, the top operating officer and old friend of Barry. Shawn wavered. Then he resigned, too, organizing a trip that night to a San Francisco dive bar in the Mission District to toast Hilbers's efforts.

The resignations were a last demonstration of rage at Hummer Winblad. "They lost the game of chicken," Conway said that night. "The bickering of Yosi [Amram] and John Fanning versus John Hummer and Hank Barry is what caused the shareholders not to get their money back in March. Now the continued bickering between John Hummer and