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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.

ICANN finds no conflict of interest in .sport decision

Kevin Murphy, June 5, 2017, Domain Policy

ICANN has rejected claims that the .sport gTLD contention set was settled by an arbitrator who had undisclosed conflicts of interest with the winning applicant.

Its Board Governance Committee last week decided that Community Objection arbitrator Guido Tawil had no duty to disclose his law firm’s ties to major sports broadcasters when he effectively eliminated Famous Four Media from its fight with SportAccord.

Back in 2013, SportAccord — an applicant backed by pretty much all of the world’s major sporting organizations — won the objection when Tawil ruled that FFM’s fully commercial, open-registration bid could harms its members interests.

FFM complained with Requests for Reconsideration, Ombudsman complaints and then an Independent Review Process complaint.

It discovered, among other things, that Tawil’s law firm was helping broadcaster DirecTV negotiate with the International Olympic Committee (one of SportAccord’s backers) for Olympics broadcasting rights at the time of the Community Objection.

The IRP panel ruled in February this year that the BGC had failed to take FFM’s allegations of Tawil’s “apparent bias” into account when it processed Reconsideration requests back in 2013 and 2014.

So the BGC reopened the two Reconsideration decisions, looking at whether Tawil was required by International Bar Association guidelines to disclosed his firm’s client’s interests.

In a single decision (pdf) late last week, the BGC said that he was not required to make these disclosures.

In each of the three claims of bias, the BGC found that the connections between Tawil and the alleged conflict were too tenuous to have required disclosure under the IBA rules.

It found that the IOC and SportAccord are not “affiliates” under the IBA definition, which requires some kind of cross-ownership interests, even though the IOC is, judging by the .sport application, SportAccord’s most valued supporter.

The BGC also found that because Tawil’s firm was representing DirecTV, rather than the IOC, the relationship did not technically fall within the disclosure guidelines.

For these and other reasons, the BGC rejected FFM’s Reconsideration requests for a second time.

The decision, and the fact that FFM seems to have exhausted ICANN’s appeals mechanisms, means it is now more likely that SportAccord’s application will be allowed to continue negotiating its .sport Registry Agreement with ICANN, where it has been frozen for years.

Famous Four exec moves to CentralNic

Kevin Murphy, November 21, 2016, Domain Registries

Famous Four Media has lost its chief marketing officer to CentralNic.

Andy Churley joined the London-based registry services provider as group marketing manager this month, according to press release.

He’s been with FFM for the first few years of its entry into the gTLD game, overseeing the launches of cheap TLDs such as .science, .download and .bid.

Previously, he was with the registrar Group NBT.

CentralNic now of course is also in the registrar business, having acquired Internet.bs and Instra over the last few years.