Wednesday , September 28 2022

OnlineNIC update: extends shutdown date, still hopes to be sold

Domain name registrar opposes Temporary Restraining Order and hopes to find a way for an orderly transition.

onlinenic logoDomain name registrar OnlineNIC has extended its timeframe for shutting down, and hopes to avoid it completely by selling the business as a going concern. It seems that decision is somewhat up to Facebook.

Yesterday, I wrote about how OnlineNIC told a court that it was shutting down July 26 because it doesn’t have the funds to continue defending against a cybersquatting lawsuit brought by Facebook.

It also started transferring some domains to another registrar, which led Facebook’s counsel to believe that it was trying to shift assets. OnlineNIC says that it was transferring domains to Ename to be sold to satisfy its debts. It says it has now found a buyer who will pay $70,000 for the domains, which will allow OnlineNIC to pay the Special Master in the case.

In a letter dated July 21 and filed with the court today, a lawyer for OnlineNIC stated that the company has extended its shutdown date to July 30, but hopes to extend it longer if the court considers payment plans.

The filing also includes an earlier letter, sent July 7, asking Facebook’s attorneys to let it continue as a going concern so the business could be sold. The lawyer stated that this might take 6 months. That letter notes that a transition letter was already sent to ICANN, so it was unclear if winding down the business could be halted.

In a response to Facebook’s Temporary Restraining Order that OnlineNIC filed today, it stated that a full asset freeze is against everyone’s interests:

OnlineNIC staff wish to stay together because they have worked together for years. In addition, selling the company as a going concern would be in the best interest of customers, since this would avoid transfers of registration data to new parties. For these reasons, in a letter to Plaintiffs sent on July 21, 2021, Defendants re-iterated their earlier proposal to Plaintiffs that Plaintiffs should allow OnlineNIC, Inc. to be sold as a going concern, which would maximize return for all parties…[language from July 21 letter linked above]…

Plaintiff’s have apparently not agreed with that proposal, because Plaintiffs’ proposed Asset Freeze would effectively block the sale of the company as a going concern, since few buyers would bother working through the legal constraints of an asset freeze to which the seller is subject.

 

 

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