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Mike Mann Files Objection, Says Sedo Should Auction off Sex.com

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.

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  1. Acro says

    Very smart move and well-justified reasons behind it. Even if a future sale fails to surpass the target figure of $14 million, there is no doubt that a campaign for the upcoming sale of sex.com is necessary in order for potential buyers to be notified.

  2. Josh says

    Well sedo really puit its neck out here to perform, not that the commish on less than $14M will be bad but the ” promise ” of performance is a huge burden.

    Id say there are XX guys in the WORLD who would even venture to pay for this name, I highly doubt sedo has a vast list of names most in the industry for years dont know of already. Just more BS on Mikes part imo.

  3. Snoopy says

    Nobody is going to pay $14million. Sedo might be able to better price but really everybody knows about the sale already. In think Sedo’s involvement here is self serving, not sure a court will take much notice of a letter which is really just hawking for business.

  4. Freddy says

    good to hear that a domainco is going to sell it. and not an inexperienced lawyer who wants to become a broker or a foot into the industry.

  5. Charles Carreon says

    Somebody tell me why they went public with all their dirty laundry in the first place and called it a foreclosure sale? Ever heard of selling your property before you’re caught in a vise and can’t make your payments? Finding a new job before you get fired? Though my friends in adult keep saying the domain is cursed, it’s only been cursed with bad management who think that six letters and a dot can do all the work. Creativity and constructive effort is required to make something of the finest asset, and Sex.Com is no exception. Read the history of the legendary domain free at http://sex.comchronicles.com

  6. Lila says

    I don’t know about SEDO. They contacted us out of the blue about our root generic domain claiming they had a serious buyer and we’d have an offer on our desk by the end of the week if only we’d sign papers. We signed the papers and there was no offer of any amount. However, three months later, someone forwarded us an email they had received from SEDO. This letter, written by SEDO sales personnel, claimed we’d turned down a three million dollar offer, had refused to even counter offer, and would “not even speak to anyone for under five or six million, maybe more”, went on further to advise them that “the site’s not great”. We wrote a letter to their SEDO’s general counsel regarding the untrue claims in SEDO’s letter and never received a response. If we ever decide to sell our domain through a broker, it will be a different one.

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