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I was wrong, Famous Four bosses WERE kicked out

Kevin Murphy, August 9, 2018, Domain Registries

Famous Four Media’s portfolio of gTLDs is under new management after an investor rebellion, contrary to what I speculated earlier this week.

FFM’s former stable, which includes the likes of .men and .science, is now being managed by a company calling itself GRS Domains, but this new company has absolutely nothing to do with FFM’s former management.

That’s according to Robert Maroney, founder of Connecticut-based Engineers Gate Investments, which is a shareholder of ultimate portfolio owner Domain Venture Partners.

Maroney got in touch with DI yesterday to explain some of what has recently happened to the ownership and management of the 16 high-volume new gTLDs.

Back in June I speculated based on the quite limited available information that FFM might be bankrupt.

On Tuesday, after GRS Domains announced a relaunch and a rejection of its previous volume-heavy, spam-friendly business plan, I speculated based on slightly more information that management had repurchased the TLD assets after investors forced it into administration.

I was wrong on both counts, according to Maroney. What actually happened is more akin to an investor takeover.

Maroney said he “engineered” the ouster of FFM and its two shareholders/managers, Iain Roache and Geir Rasmussen, after Roache attempted to close down DVP.

DVP is basically a collection of private and institutional investors (brought in by Roache and others) from around the world which, based on the available evidence, have little or no connection to the domain name industry.

It’s a matter of public record that each gTLD contract is owned by a distinct Gibraltar-based shell company — dot Bid Limited owns the ICANN rights to run .bid for example — and that Domain Venture Partners owns these companies.

I’ve previously reported that Famous Four was also owned by DVP, but Maroney said that this was never the case. It was owned 80-20 by Roache and Rasmussen and contracted by DVP to manage the 16 gTLDs.

The affiliated registrar AlpNames, which has been responsible for a very large portion of registrations in the portfolio, had the same ownership structure as FFM and was never directly connected to DVP, Maroney said.

Following a court battle, GRS Domains has replaced FFM as the registry manager.

GRS is owned by DVP, and is currently being managed by court-appointed administrator Edgar Lavarello, a Gibraltar-based accountant at PricewaterhouseCoopers.

Maroney did not want to get into the detailed specifics about what caused the investor revolt, but did say that shareholders were unhappy with how FFM was managing the portfolio.

Its low-price, high-volume strategy had caused its TLDs to become the destinations of choice for spammers and other abusive registrants.

But the court case was brought after Roache attempted to break up DVP, restructure ownership of the 16 individual registries, and “escape the regulation of Gibraltar”, Maroney said.

“Roache wanted to shut down DVP in a way we considered to be unlawful,” he said.

He said DVP shareholders felt Roache’s moves were “inappropriate and unlawful”, which is what caused him to “engineer”, via fellow investor Christina Mattin, DVP being placed into administration.

I have seen no independent evidence that Roache acted or attempted to act unlawfully. The court document I’ve seen appointing Lavarello as administrator contains no finding of wrongdoing by anyone.

The upshot of all this is that the group of TLDs formerly known as Famous Four Media is now GRS Domains — Global Registry Services Ltd — and that Lavarello is currently in charge.

I imagine the company will want to find permanent management at some point, but Maroney did not want to talk about that.

In the meantime, GRS has already made moves to become more transparent and to engage more with the rest of the industry.

Maroney said, and I have independently confirmed, that he was at the ICANN meeting in Panama recently, meeting senior industry figures. Famous Four executives have not been known to attend ICANN meetings or industry events in the past.

GRS has told registrars it intends to have a formal presence at ICANN 63 in Barcelona also.

The company will shortly terminate all of its promotional pricing and introduce a flat $9.98 registry fee, which is very likely to affect its volumes and reduce spamming activity over the next year or so.

Famous Four is DEAD! New registry promises spam crackdown

Kevin Murphy, August 7, 2018, Domain Registries

Famous Four Media’s portfolio of gTLD registries is now under the control of a new company, Global Registry Services Ltd, which has promised to abandon its failed penny-domain strategy and crack down on spam.

(August 9 update: This article contains some incorrect assumptions and speculation. Please read this follow-up piece for clarifications.)

The company, which goes by the name GRS Domains, told registrars yesterday that FFM’s 16 gTLDs are now “controlled by the same parties that control Domain Venture Partners PCC Limited, and are no longer under the management of FFM.”

DVP also owned FFM, so it’s not clear how big of a deal this restructuring is from a management point of view.

My sense is that there’s not really been a substantial change, but it’s certainly more than a simple rebranding exercise.

I’ve learned that DVP was placed into administration under the Insolvency Act back in April, with management of the TLDs handed to a PricewaterhouseCoopers administrator, more or less as I speculated in June.

The TLDs affected are: .loan, .win, .men, .bid, .stream, .review, .trade, .date, .party, .download, .science, .racing, .accountant, .faith, .webcam and .cricket.

GRS told registrars:

Moving forward there are several changes being made with regard to the overall strategy of the portfolio of gTLDs, the main one being a change to a “quality over quantity” ethos and focusing on working with our Registrar Partners to sharply reduce abuse and spam registrations.

As such, all of its current pricing promotions will end August 20 and a “much more transparent and sensible pricing strategy” will come into play.

That means a wholesale reg fee of $9.98 across the board, at least until February 2019.

GRS also plans to take a lot of its lower-priced reserved “premium” names out of the premium program altogether, and to reprice “a considerable portion” of the more expensive ones.

Finally, the company, not known to attend ICANN meetings in the past, said it plans to show up at the Barcelona meeting in October to formally relaunch itself.

Famous Four has become notorious over the last few years for its deep-discounted TLDs, which have become a haven for spammers who want to register large numbers of super-cheap, throwaway domains.

As such, its gTLDs’ volumes have been huge — many racking up hundreds of thousands of names — but their renewals poor and their reputation worse.

If GRS’ new strategy is effective, we’re almost certainly going to see the industry-wide overall number of active new gTLD domains tank over the next year or so, giving more ammunition to those who think the new gTLD program was a huge waste of effort.

It could also have an impact on ICANN’s budget — no matter how cheap FFM sold its names, it still had to pay its ICANN fees on a per-domain basis. Fewer domains equals less money in ICANN’s coffers. FFM’s registries paid over $1.6 million in ICANN fees in the organization’s fiscal 2017.

While GRS is now apparently “controlled by the same parties that control Domain Venture Partners PCC Limited”, it’s not abundantly clear to me whether that’s the same people who’ve been running FFM for the last eight years.

DVP has not immediately responded to a request for comment today.

The DVP web site has not resolved in months. The new grs.domains site doesn’t name anyone, and the NIC sites for the gTLDs in the portfolio only identify a PwC bankruptcy accountant as the primary contact.

All the companies in question are based in tax haven Gibraltar, which isn’t particularly forthcoming about identifying company directors, partners or owners.

DVP’s directors were originally Adrian Hogg, Charles Melvin, Iain Roache, Douglas Smith, Peter Young, Joseph Garcia and a company called Domain Management II (itself chaired by Roache), according to an investor presentation (pdf) DI obtained back in 2013.

I believe Melvin at least, after a legal dispute with the others, is no longer involved.

And it appears that DVP is or was in fact in administration.

I noted back in June that the 16 gTLDs were now all being administered by PwC accountant Edgar Lavarello, and wondered aloud whether this meant FFM was bankrupt.

Today I obtained (read: paid an extortionate sum for) a Gibraltar court order dated April 23 putting DVP into administration under the Insolvency Act and appointing PwC as the administrator.

The application had been made by an investor called Christina Mattin and fellow investor Braganza, a private vehicle owned by a wealthy Scandinavian family, which was (at least last year) a 10% owner.

Other named investors the court heard from were the mysterious Liechtenstein-based Rennes Foundation, something called Northern Assets Investments Limited and Dutch multimillionaire Francis Claessens.

Overall, it smells a bit to me like DVP’s principals, having seen their previous venture put out of business by disgruntled investors, have snapped up its assets and are going to try to make a second go of running the business.

As for FFM? Well, it looks rather like we won’t be hearing that name again.

UPDATE: This article was updated several hours after it was originally posted to clarify that DVP was/is “in administration”.

Has the world’s biggest new gTLD registry gone bankrupt?

Has Famous Four Media, by some measures the largest new gTLD registry, gone bankrupt?

There’s some startling evidence that this may be the case, but the company and others concerned are maintaining radio silence.

Last week, IANA’s administrative contact for all of the company’s 16 TLDs changed from its CEO, Geir Rasmussen, to someone called Edgar Lavarello. Here’s an example.

Lavarello, it turns out, is a partner at PricewaterhouseCoopers in Gibraltar who specializes in insolvency and liquidation.

Here he is in a three-year-old interview explaining why my headline today technically really should have used the word “insolvent” rather than “bankrupt”.

On Wednesday, I reached out for comment to Rasmussen and Lavarello, along with others known to work at FFM (at least recently) but have not received any responses.

Absence of a reply is not proof of anything of course — FFM has never been the most communicative company in the world and nobody is under any obligation to respond to inquiries from a humble blogger.

But I suspect that if I posed the straightforward if slightly cheeky question “Has your company gone bankrupt?” to almost any other member of the domain name industry, I’d usually expect to receive a denial in short order.

Sadly, insolvency records in laissez-faire British tax haven Gibraltar, where FFM is based, do not appear to be a matter of public record.

Even if FFM has not gone insolvent, I think there are clear signs it is having problems.

Its primary web site at famousfourmedia.com has been stripped back to be little more than a privacy policy and a contact form. Gone are all the sales pitches, press releases and TLD-specific pages. It’s now basically a one-pager.

The web site of its parent company, Domain Venture Partners, no longer resolves.

Reaching out to industry sources who have business relationships with FFM, I was unable to find anyone who’d talked to the company recently, though there were rumors of departing staff.

Earlier this year, company chair Iain Roache spent £3.9 million ($5.4 million) to buy out former FFM COO Charles Melvin, after Melvin filed a lawsuit against him and Rasmussen.

The nature of the suit is not particularly clear from public records, but at one point Gibraltar’s top judge ruled that the defendants had filed inaccurate — technically “forged” — documents to the court.

These documents included 10 invoices between FFM and AlpNames, its affiliated registrar.

Famous Four runs 16 new gTLDs — the largest among them .loan, .win and .men — and has arguably shifted more domains than any other portfolio registry.

Group volume currently runs at about 4.5 million names according to ntldstats, compared to 3.9 million for Donuts with its far larger portfolio of 241 strings.

It’s achieved this impressive scale largely by selling domains super cheap, often at or below cost and often via AlpNames.

This has resulted in huge numbers of domains being acquired by spammers. FFM strings are routinely listed in the SpamHaus top-ten list of dirtiest TLDs.

AlpNames is also regularly fingered as one of the most spam-friendly registrars.

The company’s chosen business model means that renewals, where you’d expect to make your actual revenue, are on the low side. If you take its .science as a representative example, the TLD peaked at 350,000 domains under management in April 2016 but stood at around 63,000 this February.

Famous Four bosses gave “forged documents” to court

Kevin Murphy, December 28, 2017, Domain Registries

The leaders of Famous Four Media produced “forged documents” during a lawsuit filed by the company’s former chief operating officer, according to Gibraltar’s top judge.

The new gTLD registry’s chairman and CEO were both, along with four other unidentified former employees, involved to some degree in “forging” invoices to an affiliated registrar and/or documents relating to a rights issue, according to a ruling by Chief Justice Anthony Dudley.

The ruling was made in October, but appears to have been published more recently.

Former Famous Four COO Charles Melvin is suing CEO Geir Rasmussen and Iain Roache, chair of parent Domain Venture Partners, over a rights issue that diluted his holdings in a related company, according to a court document.

There’s little in the public record about the specifics of the suit. The complaint is not available publicly and neither man wished to comment while the trial is still ongoing.

But Dudley’s ruling shows that the original claims seem to have been sidetracked by Melvin’s new allegations that the “forged” documents demonstrate that Roache, Rasmussen and others engaged in “fraud” and “conspiracy to pervert the course of justice”.

Nick Goldstone, a partner at Gordon Dadds and a lawyer for Rasmussen and Roache, told DI that they both deny any dishonest behavior and that there has been no finding of dishonesty by the court.

He said in an emailed statement: “both of the individual defendants deny (if it be alleged) that they are dishonest and both deny that they have been engaged in the creation of any forged documents in the wider sense, as alleged by counsel for the opponents in the Court case, or at all.”

According to Dudley’s ruling, the defendants’ trial lawyers have claimed that errors in the invoices provided to the court were the result of “honest incompetence”, which the judge said has “a ring of truth” to it.

Dudley, having decided Roache and Rasmussen “have historically been guilty of serious shortcomings in relation to their disclosure obligations” at some point ordered that metadata be gathered from various documents handed over during the disclosure phase of the trial.

This metadata showed that some documents “were created after (in some instances long after) the date on the face of the documents”, which led the judge to conclude they were technically “forged documents”.

But Goldstone told DI that the documents in question were “forged” only in “explicitly a narrow characterisation of the term”, adding that they had been created by former employees who have all since been fired.

The documents included 10 invoices from Famous Four to AlpNames, also based in Gibraltar, the affiliated registrar responsible for selling hundreds of thousands of cheap names in Famous Four gTLDs.

They also included documents concerning a rights issue in a company called Myrtle Holdings that reduced Melvin’s stake to a negligible amount. Again, dating seems to have been an issue.

Dudley wrote in his decision (pdf):

It is accepted by the respondents that the material produced by them contained inaccurate and misleading information; and that the forged documents have been deployed in the litigation and relied upon in pleadings and witness statements. It also formed part of the material provided to the expert witnesses, whose opinions are consequently tainted.

But Goldstone told DI: “no conclusion has been reached in the ruling as to any ‘dishonesty’ or ‘forgeries’ in the wider sense.”

The trial had been due to kick off in October, but it’s been delayed due to the fact that a lot of evidence and testimony has to be reevaluated.

Roache and Rasmussen had proposed to settle the case with a buy-out offer earlier this year, but that offer was rebuffed by Melvin, according to Dudley’s ruling.

Famous Four runs 16 new gTLDs including .science, .download, .loan and .bid.

Many of its TLDs have been offered at super-cheap prices that have boosted sales volumes but have often attracted high levels of abuse.

Famous Four wins .party gTLD contest

Kevin Murphy, April 11, 2014, Domain Registries

Famous Four Media has won the .party new gTLD contention set after coming to a private agreement with the only other applicant for the string, Oriental Trading Company.

Financial details of the arrangement were not disclosed.

Oriental Trading is a supplier of party goods that intended to run the gTLD as closed, single-registrant namespace.

But Famous Four expects the open .party registry to be used for parties in the social gathering and political senses of the word.

It now has 13 uncontested applications and 44 more outstanding.

In related news, Minds + Machines today announced that it intends to take at least three of its applications — .garden, .property, and .yoga — at a private auction April 22 managed by Applicant Auction.

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