NEW YORK, March 18 Creditors of the owner of
the Sex.com website have filed an involuntary bankruptcy
petition against the company, stalling a lender foreclosure
auction for the valuable website that was scheduled to begin on
Three creditors of Escom LLC, which reportedly paid $14
million for the website's domain name in 2006, filed the
bankruptcy petition in U.S. bankruptcy court in California on
Wednesday, claiming they are owed more than $10 million.
The creditors said they were seeking to push the company
into bankruptcy rather than allow the lender, DOM Partners LLC,
to conduct an auction in New York on Thursday after the company
had been in default for a year.
The creditors, Washington Technology Associates,
iEntertainment Inc, and AccountingMatters.com, said they
believed the auction "would have diminished the value of
Escom's assets," in a statement released by their attorney on
The auctioneer hired by the lenders, who planned to require
potential bidders to have a $1 million certified check, had
said previously there was considerable interest in the
Under U.S. law, a company typically has 20 days to respond
to an involuntary bankruptcy petition. When a bankruptcy
petition is filed, it temporarily prevents lenders from seizing
assets, so the auction was halted.
Escom had acquired the domain name from Gary Kremen,
founder of the dating website Match.com, who had registered the
Sex.com domain name in 1994.
Escom has not responded to requests for a comment.
The case is In re: Escom LLC, U.S. Bankruptcy Court,
Central District of California, No. 10-13001.
(Reporting by Emily Chasan; Editing by Richard Chang)