📸

ning’s wife, Coreen Kraysler, a portfolio manager at Independence Investment in Boston, shortly before the card was revoked.

The problem with Kraysler’s credit card was unusual: Normally, Fanning insulated his wife from his business issues. The Hull condominium where they lived and the house he was rebuilding at 2 Summit Avenue were both in Kraysler’s name, protecting the properties from any debt collectors going after him. Whoever the owner of record, the house was a source of pride for Fanning. The mansion overlooking the Atlantic was condemned when Kraysler bought it for $450,000 in 1996. Fanning threw himself into a dramatic overhaul of the wood-frame Victorian. By 2002, it had six bedrooms and four bathrooms and was valued by tax officials at $1.4 million.

But as Fanning’s home improved, his business declined. The last straw at Chess.net came when Aydar demanded to see the books. Fanning took him to Nevil’s home, and the records were in shambles. Aydar found suspicious checks from Multimedia accounts to building-supply firms and unexplained women. And the living conditions were so foul that each of the instructional chess videotapes Nevil was storing for shipment had a putrid smell to it. Only then did Fanning fire Nevil. The financial problems drove several employees away from Chess.net, including a young friend of Shawn’s named Tarek Loubani. “I never learned so much about dealing with creditors” as then, Loubani said.

Numerous lawsuits from the late 1990s show that Fanning’s money troubles extended well beyond Chess.net. In mid-1999, the year of Napster’s birth, a court entered a default judgment against him over a $17,529 bank debt. Later that year, he lost another judgment for $26,759 owed to collection agency Creditrust. The first debt would prove enough to deter the first venture-capital firm that Napster courted, Draper Atlantic. And Fanning’s wife was not immune. Her condominium complex sued her in April 1999 for unpaid fees over the unit she bought in 1988. That case was settled the following year. More serious was the 1998 collection case filed by Kraysler’s credit-card company for more than $13,000. In April 1999, Household Bank of Nevada won a default judgment against Kraysler for the full amount.

In the summer of 2001, well after Fanning had come into money by

📸