Zuccarini responds to contempt charges, alleges contempt himself.
The ongoing battle of John Zuccarini and the assignee in Office Depot’s cybersquatting case is getting even more interesting.
To bring you up to speed:
-Zuccarini was found to have cybersquatted on Office Depot
-DS Holdings “bought” the judgment Office Depot won, so now it is owed the money (the IRS also has a tax lien)
-Zuccarini’s other domain names were to be used to satisfy the judgment in some way (monetization, auction, etc).
-A receiver was appointed in the case, and he let some of the domains expire, and they were then auctioned off at NameJet.
-Zuccarini sued NameJet and others over auctioning the domains
-DS Holdings and the receiver agreed they should auction the remaining domain names at TRAFFIC in October
-Zuccarini notified Latona’s and the TRAFFIC organizers that he would sue them if they auctioned the domain names.
-DS Holdings argued Zuccarini was in contempt of court for notifying the parties that they would be sued
Phew. Got that?
Now Zuccarini as responded (pdf) to the charges of contempt, and has himself levied charges of contempt against the receiver (Michael Blacksburg) and DS Holdings.
He also says DS Holdings is lying on a number of counts. For example, Zuccarini writes (he’s representing himself):
Then DSH, again tells an outright lie to the court, pg. 2@11-12: “Even Zuccarini has acknowledged that the proposed auction is a prominent and effective domain name auction.†To the contrary, Mr. Zuccarini has expressed that it would be the worst possible avenue to auction the domain names…
Defendant OBJECTS to the lie DSH has told and moves to have this whole pleading quashed and stricken from the record. DSH, ever since this matter was brought before this Court, has made libelous, slanderous, immaterial statements and this Court has stood idly by and allowed it. Now, DSH has resorted to outright lying.
Zuccarini also points out that he’s “clearly not in contempt of anything” since no court order has been directed to Zuccarini “about anything”.
Another wrench in the case: it turns out that the receiver is being represented by DS Holding’s attorneys in another case.
The Court should also be made aware, as it has recently come to my attention of the fact that the attorney’s for DSH, without regard to appearances or ethical standards as it relates to this case, currently represent the receiver Michael Blacksburg as a plaintiff, in ongoing litigation in the Northern District of California.
There is no doubt from the beginning of this action that the receiver Michael Blacksburg has been nothing but an advocate for DSH, from not notifying the Internal Revenue Service at the commencement of the case as he was legally bound to do, to not providing revenue reports as is required by law, until forced to by this Court’s order to do so. In these actions Blacksburg has ignored the duties of a receiver as required by the law to conduct himself as a neutral party in all matters of the case.
Zuccarini asks the court to remove Blacksburg as receiver.
Of course, the domain names are making money as they’re currently parked and apparently making close to $70,000 a year in revenue. Domain Name Wire has obtained a list of the domains at issue. Many of them are generic typos, such as horosope.com, astrolgy.com, and emplyment.com. Others are generics such as BadCreditLoans.com. A couple others might have trademark issues.
As of right now, it appears the majority of the domain names are parked with Dotzup.
One obvious question: why not just keep the domains parked rather than sell them at auction? The first $100,000 will apparently go to the IRS, and then the next tranche to DS Holdings, followed by the IRS again for another about $300,000. It would make sense to sell the domains only if it was for a high multiple that would satisfy the claims quickly.
Stay tuned.
John Berryhill says
“It would make sense to sell the domains only if it was for a high multiple that would satisfy the claims quickly”
Well, Andrew, it would make sense to sell the domain names if the point of the proceeding was to cash out on a judgment you bought for pennies or nothing. The entire action is a simple proposition of ROI for DS Holdings on buying the Office Depot judgment; pace whatever Mr. Kronenberger’s fee basis or participation in DS Holdings might be, and whatever Mr. Blacksburg’s administrative fees might be.
The decision to slaughter the cow for meat instead of continuing to milk it, seems to be a function of where the proceedings have gone. Now that the IRS has shown up, the cow might be looking a bit thin.
Normally, a receiver would make a competent determination between the value of the portfolio as a going concern instead of its liquidation value. The situation here is similar to the Dell Computer and Belgium Domains imbroglio, in which Dell found it more worthwhile to extract revenue from an ongoing cybersquatting operation than to shut it down.
It would be interesting to know how much money have the domain names been making all of this time, and where is it going, or who owns DS Holdings and cooked up this scheme in the first place.
For anyone having trouble following the plot, it boils down to this. The Sheriff has proudly closed the town brothel, where young women were being exploited. Next week, he will be opening a boarding school for women, where they will develop fine morals by learning the value of working as social companions. That Sheriff is one smart feller.
barefoot says
To paraphrase The Rutles:
“… Zuccarini even sued himself accidentally.”
Henry says
@ Andrew: “It would make sense to sell the domains only if it was for a high multiple that would satisfy the claims quickly”
Yes, if being fair and doing the right thing is the end game. Unfortunately, by all accounts and based on the on-going actions, it seems that DS Holdings has something else in mind. And it stinks if my supposition is remotely close.
Henry.
JoeSixPack says
“The Sheriff has proudly closed the town brothel”
What town ? What brothel ?
Was it ICANN Accredited with a .PRO (PROstitution) domain ?
John Berryhill says
Well, Henry, DS Holdings LLC was formed in February 2006, and this steaming mess was first filed with the court in December 2006.
Mr. Kronenberger had earlier sworn a declaration to the court on June 26 2007 (you gotta love PACER and RECAP) stating:
“I coordinated with the U.S. Marshal Service in order to confirm that the particular public auction process proposed by DS Holdings is the appropriate process
for this matter. The U.S. Marshal instructed DS Holdings that the correct procedure in
this matter is to obtain an order from the Court transferring the domain name holdings to DS Holdings, for a public auction under the direction of the U.S. Marshal.”
John Berryhill says
Stranger and stranger….
MHB is reporting that TRAFFIC never agreed to have the domains auctioned there in the first place:
http://www.thedomains.com/2010/08/06/traffic-show-no-way-zuccarini-domains-will-be-auctioned-off-at-our-show
It looks like point to Zuccarini on this one, if the TRAFFIC organizers indeed had not agreed to the auction over which DSH wants to hold Zuccarini in “contempt” over.
At least the court is allowing video of the proceedings:
http://www.youtube.com/watch?v=1fuDDqU6n4o
Andrew Allemann says
@ John – very likely that they talked to Rick Latona about auctioning the domains, not Howard and Rick S.
John Berryhill says
They’ve even made the US government’s deposition of the receiver available on video:
http://www.youtube.com/watch?v=gqFBjOMA5wY
John Berryhill says
“very likely that they talked to Rick Latona about auctioning the domains, not Howard and Rick S”
I’m thinking it was something like that. It’s not even clear who the “they” is. If the receiver is supposed to be arranging disposition of the names, then the receiver should have been the one doing that arranging. Oddly, DSH’s motion leaves one with the distinct impression that it was DSH’s attorney doing the arranging. Presumably the US Marshall has left the building with Elvis.
The miscommunications would also be consistent with the suggestion of some blurring of responsibility between the plaintiff and the receiver. Looking back at the docket around the time the receiver was appointed, he represented to the court that he was not an attorney for the plaintiff. Whether it would have been relevant to disclose that he was a client of the plaintiff’s attorney is a question of California receivership law which, at this point, I consider myself to be in blessed total ignorance.
It would be interesting to know how the receiver communicated his auction RFP’s and/or conducted his evaluation of the options for disposition of the names. Again, the plaintiff’s filing suggests the plaintiff knows more about how those mechanics worked than the receiver did.