Exclusive: Bankruptcy Strikes HDGiants, MusicGiants

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High-quality entertainment play HDGiants – and its MusicGiants subsidiary –  are now entering bankruptcy, according to information secured by Digital Music News on Wednesday.

Several sources – including partners, ex-employees and other stakeholders – pointed to the distressed condition, and bankruptcy filings confirmed the information.  The bankruptcy paperwork was submitted to the US Bankruptcy Court for the District of Nevada, and a meeting for creditors is scheduled for June 22nd.  HDGiants is headquartered in Incline Village, NV.

HDGiants and MusicGiants aimed to deliver premium content – including high-fidelity music downloads – to mostly affluent listeners.  The HDGiants platform featured premium, higher-cost downloads, and was designed to plug into a variety of digital home entertainment systems.  Its music unit, MusicGiants, attempted to trump iTunes with higher fidelity songs – specifically lossless WMAs – though steeper costs, protected content, and a niche focus hampered that mission.

But what prompted the bankruptcy?  A pair of sources pointed to the pullout of a critical angel investor, a sudden move that cratered the effort.  According to another source, the investor pool was not diversified, meaning that the loss could not be cushioned by other backers.  Now, the question is whether the company can emerge from its distressed state, and survive as a slimmer operation.