Nuthin’ But Net objects to how money will be split.
Now that Escom, LLC has a $13 million buyer for its domain name Sex.com, the bickering over money can begin.
The $13 million sale of Sex.com is still on, pending court approval. But creditor Nothin’ But Net has filed a motion (pdf) asking for some of the proceeds to be set aside while it argues how much each party should get.
Nuthin’ But Net (NBN) doesn’t want the key creditors to get penalty interest. It also accuses investor Mike Mann of “self-dealing”. In its objection, attorneys for NBN write:
Mann, through a series of self-dealing transactions, essentially gave away Escom’s most valuable rights to iEntertainment (i.e., to himself) and then had Escom “buy back” those rights from his wholly owned and controlled subsidiary, iEntertainment, in exchange for a $2.5 million secured note (the “iEntertainment Note”). The ultimate, and clearly intended result of this shell game, was to allow Mann to reap a disproportional recovery upon Escom’s sale of its assets, primarily at the expense of NBN, which the Debtor presently owes approximately $2,337,562.39, but which NBN will not recover if Mann’s self-dealing is sanctioned.
Mann filed a response disputing NBN’s allegations.
It’s likely that the court will approve the $13 million sale, but it may be a while before Escom’s creditors settle the exact amounts that each party receives.