Lawsuits disclose more details on Coins.com and Invest.com domain sales.
I’ve been running down a rabbit hole today after John Berryhill tweeted about a lawsuit over Invest.com.
— John Berryhill (@Berryhillj) September 14, 2020
There were news reports in 2014 that Invest.com had sold for $5 million. But a lawsuit (pdf) filed in 2018 sheds more light on this sale.
The background, according to the lawsuit, is that Adam Perzow’s firm Heath Global bought the domain name for $2.0 million on a payment plan. Heath Global filed for bankruptcy while still owing over $1.9 million on the domain. It then renegotiated the right to purchase the domain to $2.5 million paid over time.
Perzow entered into an agreement with a third firm to sell his right to acquire Invest.com. It’s not entirely clear how much this was for; the buyer agreed to pay the $2.5 million, plus up to $0.65 million more including some services Perzow was to provide.
The sale that was reported for $5 million was this third party’s acquisition of Perzow’s domain acquisition right.
To Perzow, the cash was only part of the deal. He said he also had an arrangement with the buyers to enter into a venture with them for using the domain. (A dispute about this alleged agreement led to the lawsuit.)
But the net-net for readers is that Invest.com didn’t sell for $5 million. It’s also not clear if the entity that bought the domain from Perzow completed the payments and owned the domain.
Which led me to Coins.com. Perzow was the buyer through another firm, Hamstead Global. He bought it for a seven-figure price tag in 2018.
But Hamstead Global filed for Chapter 11 shortly thereafter. The bankruptcy case unveiled some of the details behind the purchase. The actual purchase agreement was for $1.7 million and Hamstead filed for bankruptcy after making its first $300,000 payment.
Stack’s-Bowers Numismatics, which sold the domain, got into a fight during the bankruptcy case, noting that Hamstead didn’t actually “own” the domain; it was still in escrow until all payments were made.
The parties ended up entering into a settlement agreement in July, in which Hamstead agreed that it still owed $1.4 million on the domain. According to Perzow, Hamstead Global has now made additional payments on the domain beyond the original $300,000.