Settlement comes after sales of fish.com and bird.com in 2021 auction fell through.
A recent lawsuit settlement should be a warning to domain auction bidders: don’t bid on something you can’t pay for.
In February 2021, Right of the Dot held what seemed to be a massively successful domain name auction. A single bidder placed $4.85 million in bids: $2.5 million for Bird.com, $1.6 million for Fish.com, and $750,000 for Tattoo.com.
That bidder was David Lizmi, and he didn’t end up paying for the domains.
It was a black mark on Right of the Dot and domain auctions in general, especially because it wasn’t the first time a high-profile auction fell through.
So Right of the Dot (and the seller of bird.com and fish.com, Bolton Properties) decided to sue Lizmi. Lizmi countersued, and the parties settled earlier this year.
According to a court filing (pdf), the parties settled on a final judgment of $842,418.75 against Lizmi, carrying a 6.58% interest rate on unpaid sums.
We don’t know the details of the confidential settlement, so it’s not clear if this is a straight cash settlement that Lizmi will have to pay in its entirety. But either way, it’s a significant settlement. And it should serve as a warning to people bidding in auctions that they can’t pay for.
Many people say they’d never consider bidding in an auction they can’t pay for. But I think it’s more common than you think, especially with domains with reserves. For example, people think bidding $900,000 on a domain with a million-dollar reserve is fun. But what if the reserve is lowered?
And if you are going in on an auction with other people, make sure they’re going to follow through with the cash.
There’s a somewhat happy ending for Right of the Dot and the domain sellers. Tattoo.com wasn’t included in the lawsuit because the auctioneer had already sold it to someone else. And bird.com ended up selling to MessageBird.
Post link: Domain auction bidder agrees to $842k settlement for not completing purchases
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