Sedo to Sell Sex.com

CAMBRIDGE, Mass. — The managers of Escom, which owns Sex.com, have agreed to enter into an agreement with Sedo to sell the domain name.

Sedo is a global domain marketplace provider. The agreement to retain Sedo to sell the domain name comes after a settlement between a number of the creditors to Escom.

As part of the settlement, the parties agreed that “a sale of the debtor’s assets, including its Internet domain name Sex.com, as expeditiously as possible is in the best interests of the debtor, the estate and its creditors.”

Sedo had been in talks with some of Escom’s investors to sell the domain name, saying it would be the better company to sell the domain name than DOM’s original New York auctioneer David R. Maltz.

DOM partners, one of Escom’s creditors, had originally opposed retaining Sedo to sell the domain name because it felt that its fees were too high. In addition, DOM said in a declaration that Maltz is a better choice because the company appeals to a “wider pool of bidders” and that Maltz’s marketing efforts “led to widespread interest across all business sectors and a global awareness of the auction.”

But Mike Mann, who owns the three companies that forced Escom into bankruptcy, said that Maltz was unqualified and “does not have expertise in the sale of super premium domain names such as Sex.com and an auction by Maltz will not achieve the highest and best value.”

Mann said Sedo would be a more qualified auction service to maximize the value of the domain.

Sedo CEO Tim Schumacher sent a letter to DOM’s lawyer suggesting that using Maltz was a mistake.

The letter said, “countless investors and end users alike have contacted us and told us how they believe this name will sell for less than $6 million in a foreclosure auction. There was only one month notice for this auction. This is not enough time for the due diligence needed for any serious bidder to prepare to make a substantial offer.”

In addition, the letter explained that properly selling this domain name could take a year, but a company who is experienced in domain sales could sell the domain name for maximum value in about 90 days.

In a separate declaration, Schumacher said that a sale of the domain name done properly would likely yield in excess of $14 million, the amount Escom reportedly paid for Sex.com.

The settlement agreement still has to be approved by the court.

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