Sex.com auction takes a cold shower

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- Buyers lusting after one of the most lucrative domain names in the world, sex.com, will have to wait for their chance to bid on the coveted Internet property.

The rights to sex.com were scheduled to be auctioned off Thursday, with bidders required to put up $1 million just to get in the door, after the previous owner, Escom, went into foreclosure for unpaid debts.

But the auction was postponed after Escom was forced into bankruptcy court late Wednesday by a group of creditors, according to Scott Matthews, a lawyer for DOM Partners, one of Escom's main creditors.

"The auction has been postponed based upon an involuntary bankruptcy filing in California that was filed after 5 p.m. yesterday," Matthews said, adding that a sale will eventually happen, though he could not say when.

Matthews said there had been "significant interest" in the domain name, but he declined to say how many bidders were scheduled to take part in the auction.

Escom reportedly paid $14 million for sex.com when it bought the site in 2006. DOM Partners helped finance the deal and acquired the rights when Escom failed to make payments earlier this year.

DOM announced plans last week to sell the site to the highest bidder in the equivalent of a foreclosure sale. But the auction was scratched after three of Escom's creditors filed an involuntary Chapter 11 bankruptcy petition against Escom in the U.S. Bankruptcy Court in California's Central District.

The creditors -- Washington Technology Associates, iEntertainment Inc. and AccountingMatters.com -- claim Escom owes them more than $10 million.

The dispute marks the latest twist in the storied history of sex.com, which is potentially one of the most profitable internet properties.

Gary Kremen, founder of Match.com, first registered sex.com in 1994. He spent several years in court battling with Stephen Cohen, an adult entertainment mogul with a checkered past, over the site's ownership.

In 1995, Kremen accused Cohen of stealing sex.com from him in a scheme that involved forged letters and falsified e-mails. In 2000, a court handed control of the domain name back to Kremen and ordered Cohen to pay $65 million to Kremen. Cohen subsequently appealed and the case was rejected by the Supreme Court in 2003.

Two years later, Cohen was arrested in Tijuana for failing to appear in court. He was released in 2007, according to published reports.  To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play

Search for Jobs

Index Last Change % Change
Dow 17,976.31 263.65 1.49%
Nasdaq 4,947.44 56.22 1.15%
S&P 500 2,086.24 25.22 1.22%
Treasuries 1.96 0.01 0.77%
Data as of 6:38am ET
Company Price Change % Change
Bank of America Corp... 15.52 0.21 1.37%
Intel Corp 31.46 -0.54 -1.69%
Apple Inc 126.37 3.12 2.53%
Altera Corp 42.82 -1.57 -3.54%
Microsoft Corp 40.96 -0.01 -0.02%
Data as of Mar 30
Sponsors

Sections

McDonald's will begin serving McMuffins and hash browns all day at certain locations in the San Diego area. More

The dollar's rapid rally is hurting many emerging market nations. Investors are getting out of dodge. More

Jay Z brought out Alicia Keys, Beyonce, Kanye West, and more to announce Tidal -- his new streaming service owned by the artists themselves. More