Sex.com domain goes up for grabs

[silentg]

Would like to know if the winning bidder actually has any plans for the domain or just park it.

[Bill Roy]

Well the auction for tomorrow is cancelled after a Chapter 11 suite was issued.

How long before Sex.com appears in auction now?

[loudbeats.com]

This is what I received from sedo:

For more information please reference the official press release below:

Involuntary Chapter 11 Petition Filed Against Escom, LLC - Owner of the Sex.com Domain Name

Woodland Hills, California - Creditors of Escom, LLC ("Escom") today filed an involuntary Chapter 11 bankruptcy petition against Escom in the United States Bankruptcy Court for the Central District of California (San Fernando Valley Division).

Petitioners took this action to protect their interests and to maximize value for all other creditors and equity holders. The filing will stay the public auction foreclosure proceedings previously scheduled for March 18, 2010, which petitioners believe would have diminished the value of Escom's assets.

For more information, please contact:

Lawrence Morrison, Esq.

Meister Seelig & Fein LLP

(212) 655-3582

lfm@msf-law.com

[Gerry]

This is what I received from sedo:

I got that too. I guess only us million dollar depositors got the message?

Actually, the verbiage...involuntary Chapter 11.

Hopefully, an attorney can come on here and explain.

[loudbeats.com]

I got that too. I guess only us million dollar depositors got the message?

lol I think so too

[radioz]

I got that too. I guess only us million dollar depositors got the message?

I only have a million if monopoly money counts!

I doubt that anyone who actually 'sullies' themselves by visiting this 'lowly', 'plebiscite' forum will be the buyer!

[bwhhisc]

I got that too. I guess only us million dollar depositors got the message?
Actually, the verbiage...involuntary Chapter 11.
Hopefully, an attorney can come on here and explain.

CHAPTER 3-11: INVOLUNTARY CHAPTER 11 CASE ADMINISTRATION
--------------------------------------------------------------------------------
3-11.1 INTRODUCTION
An involuntary case is commenced by the filing of a petition under 11 U.S.C. § 303. Although the automatic stay under 11 U.S.C. § 362(a) is triggered by the filing of the petition, some statutory provisions do not take effect until the order for relief is entered.

Generally, the debtor may continue to operate as if no case were commenced under title 11:

Notwithstanding section 363 of this title, except to the extent that the court orders otherwise, and until an order for relief is entered in the case, any business of the debtor may continue to operate, and the debtor may continue to use, acquire, or dispose of property as if an involuntary case concerning the debtor had not been commenced.

11 U.S.C. § 303(f).
Prior to the entry of an order for relief, the United States Trustee undertakes no oversight activity, unless the court orders otherwise. 11 U.S.C. § 303(g). No section 341 meeting can be held and no creditors' committee can be appointed. The United States Trustee, however, should monitor the case and be prepared to assume an active role if the debtor and/or the petitioning creditors engage in conduct designed to defeat the provisions of the Bankruptcy Code or that justify the appointment of a trustee.

3-11.2 STATUTORY AND BANKRUPTCY RULE PROVISIONS
Involuntary chapter 11 bankruptcy cases are governed by the provisions of 11 U.S.C. § 303 which states, in part:
An involuntary case may be commenced only under chapter 7 or 11 of this title, and only against a person, except a farmer, family farmer, or a corporation that is not a moneyed, business, or commercial corporation, that may be a debtor under the chapter under which such case is commenced.

11 U.S.C.§ 303(a); see 11 U.S.C. §§ 109(b) and 101(41).
An involuntary petition can be filed by (i) three or more creditors holding liquidated, undisputed claims which aggregate at least $10,000 more than the value of any collateral securing the claims (11 U.S.C. § 303(b)(1)); (ii) by one or more creditors holding liquidated, undisputed claims equaling at least $10,000 if fewer than 12 non-employee and non-insider creditors exist (11 U.S.C. § 303(b)(2)); (iii) by fewer than all general partners in a partnership (11 U.S.C. § 303(b)(3)); or (iv) by a foreign representative of the estate in a foreign proceeding regarding the debtor (11 U.S.C. § 303(b)(4)). A foreign representative may file an involuntary petition to administer assets of the debtor in the United States and prevent their seizure by local creditors. See 2 Lawrence P. King, Collier on Bankruptcy, ¶ 303.10 (15th ed. rev. 1998). A foreign representative may also commence a case ancillary to a foreign proceeding pursuant to the provisions of 11 U.S.C. § 304. By operation of 11 U.S.C. § 104, on April 1, 1998, the statutory dollar minimum of $10,000 was raised to $10,775 and will be adjusted again on April 1, 2002.

Fed. R. Bankr. P. 1018 identifies the rules in Part VII of the Federal Rules of Bankruptcy Procedure (regarding adversary proceedings) that "apply to all proceedings relating to a contested involuntary petition . . . except as otherwise provided in Part I of these rules and unless the court otherwise directs. The court may direct that other rules in Part VII shall also apply." The effect of Fed. R. Bankr. P. 1018 is to make Rules 5, 8, 9, 15 and 56 of the Federal Rules of Civil Procedure "generally applicable" to the raising of defenses and objections to the petition.

Section 303(d) of the Bankruptcy Code permits the alleged debtor to file an answer to contest the entry of an order for relief. If no timely answer is filed, the court will enter an order for relief. 11 U.S.C. § 303(h).

If an involuntary case is contested, the court will conduct a trial to determine whether the statutory requirements for the entry of an order for relief have been met. The petitioners must establish that they are sufficient in number, type of debt, and amount of debt to fulfill the requirements of 11 U.S.C. § 303(b) and that the debtor is generally not paying its undisputed debts as they become due or that a custodian has been appointed within 120 days of the filing of the petition to take charge of less than substantially all of the debtor's assets. 11 U.S.C. § 303(h); In re Mayhew, 194 B.R. 6, 6-7 (Bankr. D.R.I. 1996); In re Norris, 183 B.R. 437, 449-50 (Bankr. W.D. La. 1995).

The filing of an involuntary petition is an extreme action that may affect the alleged debtor's credit standing, cause public embarrassment, and impact its ability to carry on business affairs or transfer assets. In re Reid, 773 F.2d 945, 946 (7th Cir. 1985). The court may offer protection to the debtor under such circumstances, In re Cates, 62 B.R. 179, 181 (Bankr. S.D. Tex. 1986), such as by dismissing the petition or requiring the posting of a bond. 11 U.S.C. § 303(e). If the petition is dismissed, other than with the consent of the parties, the court may assess costs, attorney fees, compensation, and punitive damages against the petitioning creditors. 11 U.S.C. § 303(i); In re Landmark Distributors, Inc., 195 B.R. 837, 845-48 (Bankr. D.N.J. 1996); In re Val W. Poterek & Sons, Inc., 169 B.R. 896, 905 (Bankr. N.D. Ill. 1994).

http://www.justice.gov/ust/eo/ust_or...3/vol3ch11.htm