Feeds

Sex.com sellers roll eyes at $13m price tag

'A home run. Not a grand slam'

  • alert
  • submit to reddit

The Essential Guide to IT Transformation

A strange circle of history

All of these shenanigans help obscure some startling facts about the sale and continued controversy surrounding Sex.com.

The domain was famously stolen in 1995 by lifelong con-man Stephen Cohen who then kept it from its rightful owner, Gary Kremen, by moving ownership and funds through a series of shell companies, some in offshore tax havens.

Eventually, Kremen was handed the domain back as well as a $65 million court judgment that he has yet to receive one cent of due to Cohen’s financial hall of mirrors (Kremen is still chasing Cohen to this day).

When Kremen sold Sex.com to Escom LLC in 2006 for $12 million plus $2 million in equity, coverage of the sale itself – the largest ever domain name sale - was such big news that no one questioned who was actually buying the domain.

As the current owners squabble over how much money they will receive from the sale – even arguing that they stand to lose money – everyone has forgotten about who will shortly own what is rapidly becoming a poisoned chalice.

Jeffrey Dulberg, as Escom’s lawyer noted at the very start of the hearing that “the most important person is not here – the buyer”. Nothing is known about Clover Holdings except that it is based in St Vincent, was the highest bidder, and that it is required to deposit $1 million now and the remaining $12 million in a fortnight.

Asked outside the court, Dulberg admitted he has no idea who was behind Clover Holdings. Neither does the bankruptcy lawyer Susan Montgomery. The only company that does appear to know is auction house Sedo.

And in that respect Sedo will shortly be put in the position of trying to find a way to identify the buyer to Escom and possibly the court without breaking its own confidentiality rules if it wants to receive $520,000, rather than $130,000 in commission.

As part of the auction deal, Sedo receives between one and four percent on the total sale, depending on who the final purchaser is. If Clover Holdings was already known to have expressed an interest in buying the domain, Sedo receives just one percent; if it was an entirely new party brought to the table by Sedo, it receives four percent.

Now everyone just has to figure out who was actually behind offers the first time around (when a public auction was suddenly called off), and who is actually behind offers this time around.

And if your head hasn’t exploded after all of that, just consider the fact that Escom – or the group of feuding individuals that make up the corporate entities that make up Escom – is so unsure about the money appearing that they have already lined up a back-up buyer in case the whole deal falls through.

“This is not a complicated transaction,” argued Jeffrey Dulberg with an apparently straight face, “it’s the sale of a domain name; it’s a transaction.”

And so the saga of Sex.com continues. ®

Kieren McCarthy has written a book about the fight for Sex.com (http://sexdotcom.com).

HP ProLiant Gen8: Integrated lifecycle automation

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
White? Male? You work in tech? Let us guess ... Twitter? We KNEW it!
Grim diversity numbers dumped alongside Facebook earnings
Bose says today IS F*** With Dre Day: Beats sued in patent battle
Music gear giant seeks some of that sweet, sweet Apple pie
HP, Microsoft prove it again: Big Business doesn't create jobs
SMEs get lip service - what they need is dinner at the Club
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Amazon Reveals One Weird Trick: A Loss On Almost $20bn In Sales
Investors really hate it: Share price plunge as growth SLOWS in key AWS division
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
prev story

Whitepapers

Top three mobile application threats
Prevent sensitive data leakage over insecure channels or stolen mobile devices.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.