Napster CEO Konrad Hilbers has resigned, the company confirmed yesterday.

Hilbers sat at the helm of Napster for nearly a year. He stepped down because ongoing efforts to pull the company out of its financial woes have been unsuccessful.

Napster continues to battle a devastating lawsuit filed against it by the Recording Industry Association of America (representing the major recording companies), that shut down Napster’s service last year. It has also had a rough time making deals with those labels to offer their music online. As a result, Napster has indefinitely shelved its plans to launch a file-sharing service that complies with digital copyright laws.

Money is short Efforts to raise money from investors have also been unsuccessful. German media giant Bertelsmann , which has already poured upwards of $100 million into the company, made an unsuccessful bid last month to acquire the whole of Napster. The deal was shot down by some members of Napster’s board.

“We deeply regret that we have not yet been able to find a funding solution that would allow Napster to launch a service to benefit artists and consumers alike,” the company said in its statement.

Lacking a cash infusion or a service to sell to customers, Napster lost 30 per cent of its staff last month. Further cost-cutting measures are likely. The Wall Street Journal believes Napster may be facing bankruptcy.

“We will be looking at additional steps in the coming week to further reduce expenses,” the company said in its statement.