OK, so the company I work for seems to be going down in flames. All the domain names (60-80 of them) are in the companies name, but I control them all via the email address. The company owes me a LOT of money, and it looks like they have no way to pay me going forward. If they fail to pay me, can I sell the domain names? Can I sell a copy of the database (which I can freely copy because I'm the only one with access to the servers)? probably not I'm guessing, but under what sort of circumstances COULD I sell them? I'm planning on talking to them today & saying "I quit unless..." I don't think they will give me the domains or database , but is there something that I can do to help me inherit the DB and domains should they fail to pay me, or if the company goes down? ANy thoughts, suggestions or ideas would be welcome.
No you can't sell the domains or the database, not unless you want to be arrested. You need to file a lawsuit against them and get a judgement in a court of law. You can then file a lien and attempt to collect from them in a legal manner.
Yes, I didn't figure I could sell them. The problem with your suggestion is that there will not be a company to sue, or pay. The website & data will disappear, the domains will not be available (the ISP will very likely not allow access to the servers once their bill is not paid). Is there anything I can put in place now that will help me? ie negotiate with the company to give me the domains or license for the DB if they do not pay me by X? There would be a problem with this because it would be a material liquidation of major assets, so is there any better way to deal with this?
Is it a corporation, llc or sole proprietorship? Do they owe you salary or was this work you perform as a independent contractor. Would they file bankruptcy? How much money are you talking about? Are there no backups for the database? The ISP doesn't own the domains and can't prevent them from being transferred. It's obviously better to try and work something out with the company - but the amount you are owed makes a huge difference in whether or not you should get an attorney involved.
How about you make a deal with them in order to settle the money they owe you. You could probably sign up an agreement were they let you sell the database and keep the domains ...
thanks for the response ! -The company is a Corporation -The money they owe me is for consulting ... around $18-$20k -They probably won't file for bankrupcy, I think that they are just going to let it burn -There are no offsite backups. I could presumably get one. (though what for if I can't sell them?) The ISP doesn't own the domains, but they can make it so we can't access the servers... so you're right on that... it's just when the sites go down, the value of the domains will be reduced considerably as time goes on. The problem is that almost no matter what happens, they will never have enough money to pay me. Even if they liquidate, I doubt I'll get much because I'm really the only one who knows how to get decent value out of the assets (basically website, domains, database). I don't think going to court will get me much of anything. It's a bit of a pickle. The domains & database would probably pay me for what they owe me, but there probably isn't a nice, clean, legal way for them to give them to me (even of they wanted to). .. they are basically going to rot, lose all their value... the domains will expire, the database will die with the servers.
The problem with this idea is if you liquidate a material portion of your assets it triggers certain things. If the company is liquidated, then they cannot give preferential treatment to a specific creditor (me). Basically, they would have to liquidate, then divide the amount between all creditors. I would get close to nothing. Of course the ironic thing is that I'm the only person who can keep it running right now. What I SHOULD be doing is quitting & letting them figure out a way to convince me to stay... of course the problem with that is if I quit, then the company will go down in a matter of days (I'm the one keeping the servers alive) and there will be no chance ever of getting paid.
Suing a corporation with little or no assets would probably be throwing good money after bad. They could dispose of the domains prior to getting an award. Unless they have a secured lien against the assets, and aren't going to file bankruptcy, I don't see why they couldn't turn over the domains and database to settle the debt. Then again, there isn't much upside for them doing it. If they don't have other creditors, you might consider forming a newco that will contain the assets of the domains and database they are going to give you in satisfaction of what you are owed. You could give the former owners a piece of the newco - 10% to 25%, a non-controlling interest. While you may feel they are entitled to zilch, anything you can do to get something (vs nothing) is to your benefit. This might be the need incentive to get them to go along with it.
Yes, I never thought that suing them would be a good idea, as what you say is completely true. The reason that they wouldn't sell the domains is because the domains and database are the bulk of their assets. You cannot liquidate the assets of a company & then use the money to pay one single creditor... when liquidation of material assets happens, it starts a chain of things that need to happen. I really like your idea, however giving the owners a percentage of the newco would be fairly conflictual for them. They couldn't sell something to a newco that is partially owned by them, especially when what they are selling makes up the bulk of their assets & they have many other creditors. I guess that the best thing I can do is tell them I'm quitting & leave it to them to figure out how to keep me. If they aren't willing to work something out, then I probably would never have gotten paid anyways... I could suggest your idea... perhaps the best way to do it would be for them to give me a transferable copy of the database (which isn't a liquidation). Then I could sell it. THEN I could tell them that I'll work for the next month or so, and if I don't get paid I inherit the domains. not sure how to put that down on paper, or if they would agree to it... but not sure what else could be done.
Before you give up what you have, use it is leverage to see what can be had. Don't sell them. Tell them you need to get paid part of what is owed. Or offer to take the domains in payment of the debt. If the answers come back no, transfer the domains to them and get on with your life. They probably belong to the employer so you won't want the fight in the end. Here are some resources: Protect Your Domain Name From Employees: Domain Theft Primer Work made For Hire vs Employees: Who Owns Company IP Assets. When Your Web Developer, Employee, Partner or Host Holds Your Domain Name Hostage Good Luck!
I don't believe that either the domains or the database would be considered material assets. They would be IP (or non-material) assets. Furthermore, the domains probably wouldn't be considered assets by a judge that understood how domains work (as the doamins are a leased item, not an owned item). The two cases that I know of (Dorer v. Arel; Network Solutions, Inc. v. Umbro International, Inc.) that involved a creditor trying to obtain a domain name as compensation ended with the court saying that the domains could not be seized. However, those two cases were both in Virginia and only related to using a specific Virginia procedure to obtain the domains. In both cases the judges made it clear that they were not submitting a legal opinion on the viability of domains as seizable property, but it still seems to at least help the idea of being able to sell those domains without triggering liquidation proceedings.
mactac, You can quit of course, but do not expect they will come running like the wind to bow to your feet to come back. if they are that bad off, then they probably will not come running. I see nothing in this for you. I do see clearly you continue to provide whatever service for them for free, so if your eyes are not open by now, they are riding you for what they can get until the end. Once you say you quit, you can expect them to kill your access, and thats it, move on with your life. I would never let a company ride for that much, pay me, i keep working, if you dont then I move on... it seems you have let it ride for some reason, it is obvious they are not going to pay you, and if you took then the court, then they would just file BK, you get nothing either way.
they are material in that the company's assets are only the database,domains and websites. any liquidation of these indicates a liquidation of assets & is subject to certain rules. if the company had other assets, I could see what you'\re syaing but the major operations of the company are based on the domains, website & databases
Hey whos name is in the whois and who is controlling them he is the master of the domains.If they let you handle this situation and owe you money then itis their problem
the thing to do is set up a newco, then tell your bosses a way to save face is to sell the newco the domains and db even for a cent each, you pay them this and then they can file for bankrupcy to close there business down and as they have sold the new co the db and domains the assets are only what you paid for them place domains is a person name and not company name and then give the a small stake in the newco.
My suggestion is a bit unethical but hey you are asking. For the kind of money I would start taking possession of the domains. I would place them fully under my own account, transfer to a new registrar, and make sure you have them. If things go bad you keep em and if things turn out OKAY you can always give them back as they might not even know you took full possession. It's a tough call because if I had to bend some rule to regain $20k you damn sure I would be willing to bend a bit. The database I wouldn't touch. Maybe you can keep a backup for "security" purposes and see what happens. If the company does burn then maybe in a year you can find it in a drawer and find a way to monetize it.
the problem with that is that there is no leveraging the domains to try & get the money out of the company... they just don't have any money, so threatening to keep the domains won't help. The idea would be to sell the domains, but I don't think I can legally do that. I'd liek to set up a framework within which i CAN sell them legally though. Same with the database, I can grab a copy easy (I'm the only sysadmin), but selling it is another story... If it's not mine, I can't sell it...
Question for you, is it the domains or the websites that are the primary business of the company? If it is the websites, then could not they be changed over to cheap .info domains while the aged domains could then be sent to you? This would leave the websites as assets... just a thought. As for the database, instead of selling you the database, could you not just be given a license for distribution rights? This would leave the primary asset of the rights of the database with them while providing you with resell options.
The best you can do is approach them with an offer to take ownership of the domains / sites / databases in exchange for the money owed you.. If they refuse I would start legal proceedings immediately so that you are in line if they choose to let the company burn down.. And just because its a corporation doesn't mean that you can't sue them personally for the money.. The company may not have any cash, but I bet they do.. Or at least assets that can be converted to cash.. For everyone else reading this, since you have already paid for this lesson, NEVER let a client get in to you for that much money.. There is an old saying, when you owe the bank $10k its your problem, when you owe the bank $100k its the bank's problem.. You get in so deep you have no choice but to keep working for free hoping to eventually get paid because its too much money to walk away from..