DOM Partners Fires Back at Mike Mann in Sex.com Case

Creditor to Sex.com says Mike Mann proves its point.

DOM Partners, a creditor and equity investor in Sex.com owner Escom, LLC, has filed a reply (pdf) to Mike Mann’s opposition to DOM’s motion to dismiss bankruptcy proceedings against Escom.

In the reply, DOM Partners says that Mann’s opposition and declaration proves that he filed the bankruptcy case in bad faith to prevent a planned foreclosure auction of the Sex.com domain name.

Petitioners acknowledge crucial facts supporting DOM’s Motion for stay relief on the basis of bad faith. For example, they admit that Petitioners are controlled by Mr. Mann, that they are insiders of ESCOM, that they filed the Petition because ESCOM could not file a voluntary petition, that the filing was made solely to stay DOM’s UCC sale of the Domain Name, and that the Domain Name must be liquidated
(although they claim fhat it must be sold under the supervision of the Bankruptcy Court).

In a separate declaration (pdf), DOM Partners counsel Robert Seaman responds to Mann’s suggestion that Sedo should sell the domain name rather than New York auctioneer David R. Maltz & Co., Inc.

Although it is not necessary or appropriate to defend the commercial reasonableness of the UCC auction in this forum, I note that there were several reasons why DOM did not retain Sedo as the auctioneer for the UCC foreclosure sale. One reason is that David R. Maltz & Co., Inc. (“Maltz”), a well known auctioneer in New York, appeals to a wider pool of bidders. The “players” in the domain name industry to which Sedo caters were well aware of the auction as soon as DOM’s Notice of Foreclosure Sale was broadcast on the Internet and domain name industry message boards. Maltz’s marketing efforts led to widespread interest across all business sectors and a global awareness of the auction. Another reason is that Sedo sought a commission that was excessive given the expected amount of services involved. Payment of the additional fee for less effective marketing would have reduced the amount that DOM — and the other creditors and equity owners — would have realized from the auction.

Escom, LLC has yet to formally file a response to the bankruptcy proceedings.