Diva Goes Chapter 11

After weeks of rumors, video-on-demand player Diva Systems Corp. filed for
Chapter 11 bankruptcy Wednesday and filed a voluntary, prenegotiated
reorganization plan to sell the majority of its assets to Gemstar-TV Guide
International Inc.

Diva, which had about one month to go before its operating cash ran out,
gained the support of a majority of its debt holders for the plan. The price tag
for the asset purchase is not being released.

Under the reorganization, Diva will receive shares of Gemstar-TV Guide common
stock to distribute among its creditors. The reorganization process is estimated
to take between 60 and 120 days, after which Diva will continue to operate as a
'debtor in possession' under bankruptcy guidelines.

It will also work with its MSO customers -- including AT&T Broadband,
Charter Communications Inc. and Insight Communications Co. Inc. -- to provide
VOD products while transitioning to Gemstar-TV Guide.

'This sale marks the end of a long and arduous journey to reposition Diva,'
president and CEO Henk Hanselaar said in a prepared statement. 'This technology
marriage between Gemstar-TV Guide and Diva has the potential to significantly
change cable consumers' interactive-TV experience.'

Gemstar plans to fold Diva's technology into its own product and service
lineup, including its interactive program guide. But Gemstar does not intend to
enter the VOD market via the purchase.

'We believe the addition of Diva's server-based technology to our IPGs, for
example, will accelerate our ability to deliver full-motion advertising, movie
trailers and other promotional content to viewers through the IPG,' Gemstar
chairman and CEO Henry Yuen said.

'This will make the products more attractive and useful to consumers,
advertisers and to our MSO partners alike,' Yuen added.