Deal would pay off debt to many domain registries, and the new entity might be able to pay back customers.
Domain name registrar Epik has agreed to sell many of its assets for $4.9 million, most of which will be used to pay outstanding debt, according to recently filed court documents. [Update: the sale closed.]
That includes a payment to Matthew Adkisson, who sued the company because he’s owed over $300,000 from a failed domain transaction. But that payment would only cover the amount he’s owed from the transaction, and not any legal fees or other penalties, so Adkisson has requested a Temporary Restraining Order (pdf) to block the deal.
The buyer is a new entity called Epik LLC. Adkisson’s motion alleges that the new entity is backed by Registered Agents, Inc., which acts as a registered agent for businesses.
The Asset Purchase Agreement discloses that Epik is heavily indebted to many businesses, carrying $1.6 million of trade debt. It owes domain name registry Identity Digital the most, with a $383,000 tab. Upon execution, those debts would be paid off.
Many assets are not included in the sale, including Masterbucks.
The deal could potentially lead to a payout to customers who are owed money. The assumed liabilities include “in-store creditors” that have provided appropriate Know Your Customer documentation.
In an email sent Tuesday, an attorney representing Epik told Adkisson’s attorney that:
Epik has significant payments due this Thursday for its ICANN and domain registries obligations, which are necessary to keep the company going. Thus, if this deal does not proceed, Epik unravels and its value (and any ability for your client to recover from it), becomes virtually zero.