Morning Folks!!
My year started very interesting. I was stunned last week whenAdam Strongadvised me on New Years Day that Foreclosure.com parent company had declared Chapter 11 bankruptcy just a week earlier. I read the story in theSouth Florida Biz Journal with my jaw hanging down. Man, did I dodge a bullet! Then another article appeared today in a second publicationInman.comwith more juicy details and some history and a couple pending lawsuits. BIG lawsuits.
What jumped out at me the most was the $9 million in
assets and the $27 million in liabilities. That seemed to dove tail with the
value Brad Geisen himself put on this deal. $20 million. That deal would help his spreadsheet. It also helped to explain why his valuation was higher than my $16-$18 million.
My attorney was labeled a 'Deal Breaker'
which in hindsight saved my bacon after 15 months of trying to get to a
permanent contract while operating under an LOI. I was not happy that I spent 60% of the money they were
paying me negotiating this deal and ended up walking away with nothing. In hindsight that was a small price to pay to protect and now save one of my most
valuable properties.
You can't say the motives behind what someone does
but you sure as hell can speculate and when I do, I don't like what I see. It
just reinforces how I do business and the power and freedom to walk away from a
$20 million deal that would have turned out very bad. I am sure this is not the
last we hear of this and whether they survive or not may not be up to them.
At some point I will write more details about the deal. I posted about the initial breakdown back in October 'Foreclosing on Foreclosure.com'. It started turning south in August when
they defaulted on their monthly payment. I continued to send them traffic in good faith as I
thought we were close to getting this nailed down. In fact, I was just wasting
my time and getting jerked around. But better that than losing the domain name
for pennies on the dollar. So what some may have thought was weakness when this fell
apart as actually strength in walking away. What gets my dander up is in my
heart I believe they knew this was coming and the fact they would not sign the
deal that mirrored the fail safe in the candy.com spoke volumes. How could you not know in August, September and October that bankruptcy was looming just WEEKS later? I don't forget SHIT like that and folks need to know the skinny on all this.
Knowing when to say 'No' and walking away has been my single biggest strength in business since the 1970's. Even when I could not afford to say 'No', I did. Each time the future proved the decision to be a good one. Never give in to the pressure. It is your RIGHT and your DUTY to walk away from bad deals or deals that don't cover everything. Walking away from a $20 million Property.com deal (My biggest deal ever) only makes the domain more valuable and I feel 100% vindicated that I followed the advice of my attorney. It was one of the toughest decisions I ever made and until New Years Day, one I questioned daily and my greatest defeat is now my most cherished victory!
Have a GREAT Day!
Rick Schwartz
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