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2 Liquid Audio Execs Resign

November 23, 2002|Jon Healey | Times Staff Writer

Six years after founding online music distributor Liquid Audio Inc., two top executives at the troubled Redwood City, Calif., firm have resigned their posts, the company disclosed Friday.

Gerald Kearby, chief executive and president, and Robert Flynn, senior vice president of business development, stepped down earlier in the week for undisclosed reasons. Neither could be reached for comment.

Flynn will remain on Liquid's board, and the company retained both men as consultants.

The resignations came as the board of directors tries to develop a new strategy for Liquid, which recently canceled its planned merger with Alliance Entertainment Corp., a top independent distributor of prerecorded CDs, DVDs and tapes.

In anticipation of the merger, Liquid in September sold the rights to its patented technology for secure music distribution to Microsoft Corp.

The company has seen its revenue plummet since mid-2000, and dissident shareholders have tried to force it to liquidate while it still has an ample supply of cash.

Those shareholders, whose opposition helped kill the Alliance deal, ousted Kearby from the board at the annual meeting in September.

But Liquid's fortunes recently have begun to turn. The company just started offering online retailers more than 43,000 downloadable songs from the world's largest record label, Vivendi Universal subsidiary Universal Music Group.

The deal was by far the largest commitment by a major record label to Liquid's online distribution business. A similar agreement with EMI Recorded Music is set to take effect next month.

Liquid named Raymond Doig, a former executive at 20th Century Fox who also lost his seat on the Liquid board in September, as its new chief executive.

Stephen V. Imbler, a management consultant and Liquid board member, was named president, and James D. Somes, an investment banker and board member, was named chairman.

Liquid shares rose 7 cents Friday to close at $2.65 on Nasdaq.

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