-5-
“In the event of insolvency, receivership and/or other default of the jointly
owned company, the domain name <servers.com> shall revert to Jeff Baron
and Mike Emke, to be owned jointly and equally. To this degree, these two
principals shall maintain a first lien and security interest in the domain name
superior to any other investor, equity holder or creditor.”
R. 247.
On October 18, 2011, the Ondova Bankruptcy Court Judge entered an order placing
Servers, Inc. into receivership because Servers, Inc. was in default of its obligations
regarding the domain name Servers.com. R. 255. Accordingly, because of Servers, Inc.’s
default, as a matter of Texas and Nevada state law, pursuant to the agreement between the
parties, the domain name servers.com reverted to Baron and Emke and they became 50/50
owners of the domain name. The Ondova bankruptcy estate retains its 50% ownership
interest in Servers, Inc., however, as a matter of Texas and Nevada state law, Servers, Inc.
no longer owns “servers.com”
To be clear, the reversion interest was triggered not
because Ondova or Servers, Inc.,
went into bankruptcy. Servers, Inc. was not placed into bankruptcy. The event triggering the
reversion interest was the default of the jointly owned company
(Servers, Inc.) in carrying
out its purpose as agreed in the original Emke settlement and being forced into receivership.
Notably, it is Servers, Inc. that lost ownership of servers.com, not
Ondova. Similarly,
Servers, Inc.’s loss of servers.com had nothing to do with the fact that Ondova happened to
file for bankruptcy. The Ondova estate owned stock in Servers, Inc. and it did not lose that
stock. Just as if Ondova had owned stock in Microsoft, Inc. and Microsoft defaulted on
some contract and lost rights thereby, Ondova’s stock in Microsoft, Inc., would be decreased
in value accordingly. Nothing in the bankruptcy law prevents Microsoft, Inc., from losing
assets pursuant to pre-existing legal rights and agreements because Ondova owned Microsoft
stock and then went bankrupt. Similarly, nothing in the bankruptcy law creates any special
rights relating to Servers, Inc., because Ondova happened to own Servers, Inc. stock and
Ondova went into bankruptcy. The statutory protections afforded to an entity in bankruptcy
do not extend to corporations the bankrupt entity happens to own stock in.
Case 3:12-cv-00367-F Document 9 Filed 03/05/12 Page 17 of 20 PageID 1508