By Madhuri Dey
California, Mar 21, (THAINDIAN NEWS) Sex.com, one of the hottest websites on the internet, has been forced to enter bankruptcy, thanks to the creditors of the company who filed a petition of bankruptcy, thus bringing to a halt the auction that was being held. The creditors confessed that they had filed the bankruptcy claim in order to put the company in an insolvent state. As clarification of their move, they said that sex.com owed them more than $10 million, a collective estimate. The Chapter 11 bankruptcy petition has been filed on Wednesday, with the United States bankruptcy court, located in California.

The auction, which was being held for the domain name, had to be stalled when the creditors filed the bankruptcy petition, as according to the constitution, a company cannot seize assets once a bankruptcy claim has been filed against it. The attorneys for the creditors, from the law firm called Meister Seelig and Fein, said that the petition has been filed in order to ensure the protection of the interests of the creditors, who were afraid that Escom’s assets would have been devalued due to the auction. According to reports, Ecsom is the company that had bought the domain name for $14 million.

The three creditors of Escom are AccountingMatters.com, Washington Technology Associates and iEntertainment Inc. The auction was supposed to have been held on Mar 18, and the interested parties needed to have an amount of at least $1 million to their name. The auction had been put up after Escom failed to repay a loan that had been given to it by DOM Partners, a lending firm based in New Jersey.