Mann files opposition to Dom Partners’ motion to dismiss bankruptcy petition; Sedo CEO files declaration about value of Sex.com domain.
The three companies owned by Mike Mann that forced Sex.com owner Escom, LLC into bankruptcy have filed an objection (pdf) to Dom Partners’ motion to dismiss the bankruptcy case. Mann says he filed the bankruptcy petition because he was concerned that the auctioneer chosen by Dom Partners to auction off Sex.com was unqualified:
In the opinion of the Petitioning Creditors, [auctioneer David R. Maltz & Co., Inc.] does not have expertise in the sale of super premium domain names such as sex.com (widely reported to be one of the most valuable domain names in the world) and an auction by Maltz will not achieve the highest and best value for the benefit of the Debtor and its creditors. The involuntary petition was filed on March 17, 2010 to stay the auction and allow the sale to be quickly and efficiently conducted under the supervision of the Bankruptcy Court.
Mann states that Sedo would be a more qualified auction service to maximize the value of the domain. In fact, some of Escom LLC’s owners apparently have been in talks with Sedo for the past year to sell the domain.
Sedo CEO Tim Schumacher sent a letter to Dom Partners’ lawyer suggesting that the use of Maltz was a mistake. In the letter (pages 40-42 of this exhibit), Schumacher explains that “countless investors and end users alike have contact us and told us how they believe this name will sell for less than six million in a foreclosure auction. There was only one month notice for this auction. This is not enough time for the due diligence needed for any serious bidder to prepare to make a substantial offer.”
In the letter, Schumacher says properly selling this domain could take a year, but a company experienced with domain sales could sell the domain for maximum value in about 90 days. He says Sedo has already done its research on the domain and built a lead list. In a separate declaration in support of Mann’s opposition (pdf), Schumacher states that a sale of the domain name done properly would likely yield in excess of $14 million. Escom is rumored to have paid that much for the domain name when it bought it.