Breaking News: SnapNames/Oversee Revises & Restates Release To Limit It Just To Halvarez

After much discussion and criticism last week Oversee/SnapNames.com announced today that it has revised and restated the release they are requiring those wanting to accept the settlement for the bidding activities of the bidder Halvarez to sign.

As we have discussed here we thought the release was overly broad and the literally reading would release Oversee and Snapnames from all and any liability for any activity on SnapNames related or not related to the bidder Halvarez which was the bidder ID of Nelson Brady, a former employee and officer of the SnapNames.

The language we objected in the document was the following which sought a release:

“”Relating to the auctions for and acquisition of the Domains, including without limitation, any Claims relating in whole or in part to the bidding activity of the SnapNames user associated with the user name “halvarez”

Our objection was simply that since the only thing being offered was compensation for bidding activities related to halvarez the release should be limited to the activities of Halvarez.

Today Oversee sent over the following statement:

“”"”Update to Rebate Offer Acceptance Agreement

On November 6, 2009, SnapNames (via Rust Consulting) communicated an offer to provide a rebate to customers with accounts impacted by inappropriate bidding activity from one of its former employees.

Included with that communication was a Rebate Offer Acceptance Agreement for customers to complete and return to Rust Consulting, the third-party administrator managing the rebate offer.

Several SnapNames customers expressed concerns about the agreement’s language.  After considering these comments, we concluded that a section of the original agreement, addressing the scope of release of potential claims, could be interpreted as too broad and not what the company intended, and therefore should be clarified.

Accordingly, the revised copy states precisely that the agreement addresses only the SnapNames auctions in which there was bidding activity from the user name “halvarez.”  Please see the marked relevant paragraph below.

Customers who have already communicated their acceptance of the rebate do not need to take further action at this point—their rebates are already being processed for payment.  However, if they prefer the revised language, they can print, sign and return the updated document.  In that event, we will destroy the original acceptance agreement.

Calculation of rebate amounts

As discussed in the November 6 communication from Rust Consulting, to determine the rebate offer amount, SnapNames hired an independent, third-party forensic accounting firm to perform a thorough review of these auctions and calculate the rebate.

The firm reviewed data regarding all of the bidders in an affected auction, including the bids each bidder placed in the auction and the maximum bids the bidders indicated they were willing to place in the auction; from this data, it was determined what the winning bid would have been had halvarez never placed a bid in the auction.  This amount was then subtracted from the actual price paid for the domain name to determine the amount of the rebate for that auction.

Upon further review of this data, SnapNames has learned that for a small number of accounts (less than 5% of the auctions impacted by halvarez), calculations failed to account for changes in our bidding system over time.  In those cases, there will be a resulting upward adjustment of between $1 and $5 per auction.  Affected customers do not need to take any action—they automatically will be paid the higher amount.  If a payment has already been processed, the customer will be issued an additional check for the difference (or credit will be added to the customer’s SnapNames account, according to the customer’s decision).

Bidders and domain names in auctions won by Halvarez

Customers and selected bloggers have asked SnapNames to offer compensation to bidders who competed in auctions won by the Halvarez user name.

Regrettably, SnapNames does not own these names and cannot unwind the sale of these names or otherwise offer them up for auction again.  SnapNames is not offering any rebate or other compensation to bidders who lost names to Halvarez.

Although it cannot discuss the details of any ongoing legal issues, SnapNames intends to pursue the legal remedies it may have with respect to this matter.

Additional options for sending your rebate acceptance

As detailed previously, customers electing to accept the rebate offer can execute and return the Rebate Offer Acceptance Agreement to:

SnapNames Rebate Administrator
P.O. Box 98
Minneapolis, MN  55440-0098

We have made additional options available for returning the agreement.  Customers may:

·         Fax your executed offer to (503) 200-1232
·         E-mail a scanned copy of the executed offer to snapnamesrebateoffer@snapnames.com

So the release as modified will say:

I, the undersigned, individually and jointly, for myself and my successors, assigns, trustees, partners, joint venturers, directors, officers, affiliates, associates, managers, licensees, and for any other claiming through or under each or all of them and for any person or entity with or for whom I may have purchased the above mentioned names (collectively, the “Releasors”) hereby release and forever discharge, acquit, covenant not to sue and acknowledge complete satisfaction from, SnapNames, and its past and present parent companies (including Oversee.net), affiliates, successors, assigns, agents, attorneys, servants, representatives, employees, independent contractors, trustees, administrators, predecessors-in-interest, insurers, partners, joint venturers, stockholders, members, directors, officers, parent companies, associated companies, holding companies, subsidiaries, divisions, affiliates, associates, managers, licensees, accountants and consultants of any of the foregoing (collectively, the “Releasees”) for any and all claims, actions, arbitrations, charges, complaints, grievances, hearings, causes of action, actions, suits, damages, costs, expenses, judgments, liabilities, demands, inquiries, investigations, proceedings or suits of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, previously existing, or now existing, or hereafter arising, in law or in equity (collectively, the “Claims”), which the Releasors or any of them had, may have had, or now has, from the beginning of time to today’s date against the Releasees, collectively, or any of the Releasees, individually, for or by reason of any matter whatsoever relating in whole or in part to the bidding activity of the SnapNames user associated with the user name “halvarez” (the “Released Matters”) for damages, restitution, disgorgement, unjust enrichment, civil penalties, statutory penalties, injunctive and/or declaratory relief, whether class, individual, representative, or otherwise in nature, including costs, expenses, penalties, and attorneys fees.

Mason Cole”"

If you already executed the release, you can ask that the previous release you signed to be destroyed and replaced with this release.

Now I can hear a lot of you hitting the keyboards already ready to comment on here to say, I don’t believe Oversee when they say it was all a misunderstanding.

I’m going to say it just doesn’t matter.

Other than for chest banging or ego boosting, what is the difference, whether Oversee and its attorneys meant as they say that the release was only requiring people to waive were there right’s to make a claim based on the bidder Halverez, and after reading our comments and/or the comments of Rick Schwartz on his blog or Howard Neu’s analysis of the release, realized that the domainer community read the release to say something quite different than how they read it, or whetor whether having read these posts and the comments realized that very few people were going to sign the release as stated, they decided to modify it.

The modification now clearly indicates the waiver is limited to the bidding activities of Halvarez.

The bottom line is that the release has been changed for the benefit of all domainers into a document that can be considered by domainers for settlement, which the previous version in my opinion could not.

Our major objection to the release have now been overcome and the release now becomes a real option which we are going to strongly consider signing as well.

The release now would not bar you from seeking claims or damages for any other bidders that were found to be fraudulent, other than Halvarez, or other any other improprieties that maybe found later to be going on at Snapnames.com.

So if Brady or any other insider at Oversee/Snapnames.com was found in the future to have engaged in shill bidding under any other bidder ID other than Halvarez, you would still have the same claim you would have had, if you did not sign the release.

Likewise if any other actionable improprieties at Snapnames are discovered, unrelated to Halvarez, you would still have a right to bring an action.

So just to be clear lets review what you would be getting and what you would be giving up if you signed the release and took the offered settlement.

If you take the settlement, you of course get cash (or credit at snap if you prefer)

Cash is good.

Cash is immediate.

And all of the cash goes to you, none goes to attorney’s.

You are going to be compensated for those auctions you won where Halvarez finished 2nd.

However, if Halvarez bid in an auction you won, but did not finish 2nd, you get no compensation under the settlement.

What your giving up:

Any other claim for damages on the actions of the bidder Halvarez, including a right to sue individually or by joining a class action.

I have seen some discussions about the possibility of tremble damages under consumer protection laws and the possibility of punitive damages.

I have no idea of whether such claims are sustainable or would apply in this situation and you will need to consult with an attorney experienced with such matters to get their opinion.

By signing the release you would also be giving up any claim for damages caused by Halvarez bidding but not finishing in 2nd place.

Again I have no idea of whether such a claim is sustainable and you should consult with an attorney to see what they believe your ultimate gains could be but you also need to realize that litigation is something that can certainly drag on for years, including appeal.

Finally remember if  “worst comes to worst” there is always a risk that this company might be forced into, or file for protection from its creditors and in which case you become an unsecured creditor, which is never a good position to be in.

The other ancillary benefit to Oversee/Snapnames.com is the change in the release may take some heat off the theory that there are other issues Oversee is aware of and that they were trying to “sneak” such issues into a release.

This modified release should help ease those concerns.