Sex Doesn't Sell: Creditors Block Auction of Coveted Domain Name

Indebted company reportedly paid whopping $14 million to get domain name in 2006

By MEGAN K. SCOTT and Jennifer Millman
|  Thursday, Mar 18, 2010  |  Updated 2:01 PM EDT
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Sex Doesn't Sell: Creditors Block Auction of Coveted Domain Name

Screenshot from Sex.com

Sex.com (screenshot here) is one of the most expensive domain names in Internet history.

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The suitors for Sex.com have been put off -- for now.

A Manhattan auction for the much-sought-after domain name was canceled today after three creditors filed a petition forcing the owner into bankruptcy.

Mike Mann, an investor with all three creditors, says the $10.1 million petition was filed to stop the auction, which was set to happen live in the city and online at Proxibid.com.

Maybe the domain name is just too hot for the auction block.

Sex.com's current owner, Escom LLC, paid a reported whopping $14 million for the name in 2006 -- making it one of the most expensive in Internet history -- but hasn't been able to repay the lender who backed the deal.

The law firm of Meister Seelig & Fein released a statement saying that it filed an involuntary bankruptcy petition against Escom LLC, and that Sex.com's creditors fought to block the auction because they thought an auction sale would compromise the multi-million-dollar value of the domain name, according to the law firm.

"Petitioners took this action to protect their interests and to maximize value for all other creditors and equity holders," the firm said in a statement. The sale "would have diminished the value of Escom's assets."

The opening bid for the auction was set at $1 million.

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