* Veoh founder says video service will shut down
* Plans to file for Chapter 7 bankruptcy
* Founder cites legal battles, difficult economy
* Private investors pumped $70 million into Web service
By Emily Chasan
NEW YORK, Feb 12 Online video sharing service
Veoh Networks Inc plans to file for bankruptcy protection and
liquidate the business, according to the company's founder.
In a blog on his website late on Thursday, Veoh founder
Dmitry Shapiro said the company would file for Chapter 7
bankruptcy protection, citing the difficult economy and costly
legal battles with Vivendi's (VIV.PA) Universal Music Group
over claims of copyright infringement.
"The distraction of the legal battles, and the challenges
of the broader macro-economic climate have led to our Chapter 7
bankruptcy," Shapiro said on his personal website.
Under Chapter 7 of the U.S. bankruptcy code, companies are
usually shut down rather than reorganized.
Veoh, which Shapiro formally launched in September 2005,
competes with Google Inc's (GOOG.O) YouTube in allowing
Internet users to broadcast video content. Since the launch,
its audience has grown to 28 million users per month, Shapiro
According to the company's website, Veoh is backed by
investors that include Shelter Capital, Spark Capital, former
Walt Disney Co (DIS.N) Chief Executive Michael Eisner's
Tornante Co, Goldman Sachs (GS.N), Time Warner Inc (TWX.N),
Intel Capital (INTC.O), Adobe Systems Inc (ADBE.O), Gordon
Crawford, former Viacom Inc VIAb.N CEO Tom Freston's Firefly3
LLC and former Viacom Entertainment Group CEO Jonathan Dolgen.
Shapiro said investors had pumped $70 million into the
Veoh did not immediately respond to an email seeking
(Reporting by Emily Chasan; Editing by Lisa Von Ahn)