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Sex.com Officially in the Record Books at $13 Million

November 17, 2010Domain Sales, Domaining, Domainnamewire, escom, sedo, sex.comComments Off on Sex.com Officially in the Record Books at $13 Million

Sex.com officially becomes the largest all cash publicly announced domain sale of all time.

The check has cleared.

A few weeks after signing documents for a $13 million all cash deal, Escom LLC has officially sold Sex.com with the help of Sedo. Congratulations to Sedo broker Jeff Gabriel who handled the deal. Also congrats to Sedo for its persistence trying to get the name to broker. It filed an affidavit with the court arguing it should be allowed to broker the domain name and said it felt it could sell the domain name for in excess of $6 million.

In the end the company sold the domain name for much more than I thought it would sell for. It’s also about $1.5 million more than the cash component of the last deal for the name. This comes despite a drop in the online adult entertainment market over the past several years.

A couple million of the sales price is being held back by the court pending settlement of outstanding claims between some of the investors.


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  3. Creditors Ready to Receive First $10 Million from Sex.com Sale

Court Greenlights Sex.com Order

June 9, 2010Domaining, Domainnamewire, escom, Policy & Law, sedo, sex.comComments Off on Court Greenlights Sex.com Order

Order paves way for sale of Sex.com.

The Central California Bankruptcy Court has issued an order approving a settlement between the managers of Sex.com owner Escom, LLC. This means that Escom can go forward with entering into an agreement with domain broker Sedo to sell the domain name.

There was a slight hitch in the process as investor Nothin’ But Net (run by Mike “Zappy” Zapolin), which had been quiet in the early stages of the case, filed an objection. After filing the objection Nothin’ But Net worked with creditors DOM Partners and Washington Technology Associates to resolve their differences.

Escom will now operate as a debtor in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. Assuming the deal with Sedo goes through, you can expect marketing of the domain to begin shortly.


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Related posts:

  1. Mike Mann Files Objection, Says Sedo Should Auction off Sex.com
  2. Breaking: Sedo to Sell Sex.com Domain Name
  3. New Developments in Sex.com Case

Breaking: Sedo to Sell Sex.com Domain Name

May 21, 2010Domaining, Domainnamewire, escom, Policy & Law, sedo, sex.comComments Off on Breaking: Sedo to Sell Sex.com Domain Name

Settlement paves way for Sex.com domain name sale.

The managers of Escom, LLC, which owns the Sex.com domain name, have agreed to enter into an agreement with Sedo to sell the domain name. Terms of the brokerage agreement are confidential.

The agreement to retain Sedo to sell the domain name comes after a settlement between a number of the creditors to Escom. Originally, creditor DOM Partners pushed the Sex.com domain name into foreclosure and scheduled an auction to sell the domain name. The day before the auction was to take place, three entities controlled by Mike Mann made an involuntary bankruptcy filing against Escom to halt the auction.

The parties battled back in forth in bankruptcy court, but have reached a settlement. As part of the settlement, the parties agreed that “a sale of the Debtor’s assets, including its Internet domain name www.Sex.com (the “Domain Name”), as expeditiously as possible…is in the best interests of the Debtor, the estate, and its creditors.”

DOM Partners had originally opposed retaining Sedo to sell the domain name because it felt that its fees were too high. Sedo had been in talks with some of Escom’s investors previously to sell the domain, and Sedo filed a statement in the case suggesting that it would be the better company to sell the domain name than DOM’s original auctioneer.

The parties have asked the court to approve its settlement agreement.


© DomainNameWire.com 2010.

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Related posts:

  1. Mike Mann Files Objection, Says Sedo Should Auction off Sex.com
  2. Breaking: Thought Convergence and Jay Westerdal Settle
  3. Judge Denies DOM Partners Motion to Dismiss Bankruptcy Case

New Developments in Sex.com Case

April 29, 2010Domaining, Domainnamewire, escom, Policy & Law, sex.comComments Off on New Developments in Sex.com Case

More fighting between Sex.com owners.

It’s a business relationship gone sour, and it doesn’t look to be getting any better. Here’s a recap in the case of Sex.com owner Escom, LLC, as well as the latest developments in this soap opera.

To recap:

-First, one of the company’s creditors, DOM Partners, pushed the company’s main asset, Sex.com, into a foreclosure auction.

-The day before the auction was to take place, three entities controlled by Mike Mann filed an involuntary bankruptcy petition against Escom, thereby halting the auction. One of the entities is also a creditor with a loan backed by the Sex.com domain name.

-DOM Partners then filed a motion to dismiss the bankruptcy case so that it could go ahead and auction off the domain name to recoup the debt.

-Mann’s entities objected to DOM Partners’ motion to dismiss.

-The bankruptcy judge decided against dismissing case, and suggested a trustee might be necessary to act on behalf of the creditors as a whole.

-DOM Partners agreed with the judge that a trustee would be necessary.

Here’s what’s new:

-Mann and Escom objected to the idea of appointing a trustee. They say the company should sell the domain name on its own terms.

-Mann invoked section 5.03 of the Escom, LLC Operating Agreement, which basically says any issues not able to be decided by the three Managers of Escom (DOM Partners, Washington Technology Associates, and Domain Name Acquisition Group) would go to the non-Managing members of Escom. All Managers would be required to submit a report to the non-managing members, who would then have authority to decide. The two non-managing members are Nothin’ But Net, run by Mike “Zappy” Zapolin, and I-95 Investment Group. The latter is a larger member, and submitted a letter saying that it supports Mann’s and Escom’s position on the matter. DOM Partners says section 5.03 of the agreement is not valid given the current status of this dispute.

-Disagreements between DOM Partners and Mann may put a recent settlement with Sovereign Bank over embezzlement in jeopardy.

-DOM continues to claim that Mike Mann effectively controls Escom, while Escom’s CEO and Mann have said this is not true.

-Escom’s CEO claims the company’s revenue increased 194% between September 2009 and March 2010 and that the company has about $200,000 in cash.

-Communications between the company’s owners suggest that it considered a way to get a more mainstream advertiser on the site — someone “like WebMD” — in an attempt to make the web site more attractive to mainstream acquirers.

-So far Andrew Miller and Mike “Zappy” Zapolin of Internet Real Estate Group, both part owners of Escom, LLC through various holding or investment companies, have remained quiet on the case. However, tweets by Mike Mann today suggest that Mann is not on good terms with Miller and Zapolin.


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Related posts:

  1. Judge Denies DOM Partners Motion to Dismiss Bankruptcy Case
  2. Sex.com Dirt: Inside Details of What Went Wrong with Sex.com
  3. DOM Partners Fires Back at Mike Mann in Sex.com Case

Judge Denies DOM Partners Motion to Dismiss Bankruptcy Case

April 21, 2010dom partners, Domaining, Domainnamewire, escom, Mike Mann, sex.com, UncategorizedComments Off on Judge Denies DOM Partners Motion to Dismiss Bankruptcy Case

Bankruptcy case to proceed for now.

A judge assigned to the bankruptcy case of Sex.com owner Escom, LLC has denied creditor and shareholder DOM Partners’ request to dismiss the case.

Three companies run by Mike Mann filed an involuntary bankruptcy petition against Escom the day before Sex.com was to be offered in a high profile auction in New York City. Mann argued that the best way to realize the maximum value from the sale of Sex.com was to hold an orderly bankruptcy auction using a skilled domain auctioneer.

Escom, LLC filed a formal response to the bankruptcy filing, saying that it agreed with the bankruptcy proceedings. That should come as no surprise to DOM Partners, which claims that Escom’s CEO reports to Mike Mann and that Mann effectively operates Escom.

The upshot of a bankruptcy auction is that the domain name could be auctioned free of all liens. But given the history of Sex.com, I’m betting we haven’t seen the last twist in this case.


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Related posts:

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

April 13, 2010dom partners, Domaining, Domainnamewire, escom, Mike Mann, Policy & Law, sedo, sex.comComments Off on DOM Partners Fires Back at Mike Mann in Sex.com Case

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

Sex.comDOM 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.


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Related posts:

  1. Mike Mann Files Objection, Says Sedo Should Auction off Sex.com
  2. Mike Mann Claims Sex.com Over $10 Million in Debt
  3. Mike Mann Speaks His Mind about Sex.com