VeriSign's intended sale of most of Network Solutions to Pivotal Private Equity is expected to have no effect upon the litigation in which Sex.com owner Gary Kremen has been trying to hold the domain registrar accountable for the 1995 theft of Sex.com by Stephen Cohen.
Kremen himself was unavailable for comment but a source close to the litigation told AVN.com Sex.com didn't think the sale would interfere with the case, which is awaiting trial in a federal court, following an appeals court ruling earlier this year that Kremen could seek to hold VeriSign/Network Solutions liable in the theft.
"We believe there will be no effect," said the source, who asked not to be identified. "Our liability stays with VeriSign, as best as we can tell, but we're examining it closely. We are looking at relief in the form of a preliminary injunction and a temporary restraining order for other relief."
VeriSign spokesman Tom Galvin confirmed the litigation remains VeriSign's responsibility, even though VeriSign didn't own Network Solutions at the time of the Sex.com theft.
Cohen used a forged letter to get Sex.com's registration transferred from Kremen to himself in 1995, when Network Solutions was the domain's registrar. Kremen eventually won a $65 million judgment against Cohen, who has since fled the country, but Kremen has since tried to have Network Solutions and parent VeriSign – which bought NS at the height of the dot-com boom – held accountable in the theft.
The 9th U.S. Circuit Court of Appeals ruled earlier this year that the registrar could be held accountable even if it did not effect the domain transfer to Cohen directly, on the grounds that it happened on NS's watch.
Earlier October 16, VeriSign announced the pending Network Solutions sale to Pivotal Private, a company known for acquiring underperformers, in a $100 million deal involving cash and a senior subordinated note. The sale involves Network Solutions's domain registration and Web hosting services among others, but VeriSign will keep a 15 percent stake in Network Solutions.
VeriSign had paid $1.6 billion to buy Network Solutions, meaning the sale puzzled some analysts, though others said the sale could help clarify the picture as far as making a real call on VeriSign's future performance was concerned.
