- The Washington Times - Tuesday, July 18, 2000

On-line businesses that sell the assets of bankrupt companies are springing up to convert others' hard times into revenue. They have customer lists full of failed enterprises.

Bid4Assets.com, a Silver Spring, Md., company, is selling everything from domain names of failed dot-com companies to unpaid debt to tangible assets like buildings and art.

"We don't get personal enjoyment out of others' failures. We're just trying to run a business," said Thomas Kohn, chief executive of the privately held company.

They aren't the only ones.

Cambridge, Mass.-based Bankruptcy Exchange and Auction Market Inc. debuted its Web site last week.

"Traditional auctions are very parochial, and we're changing that," Bankruptcy Exchange and Auction Market President Jack Pascal said.

New York-based Ereorg.com will begin Web auctions in August of distressed loans.

The assets of failed companies everything from furniture and computers to unpaid debt reached an estimated $250 billion last year alone, according to Bid4Assets.

The sale and purchase of most of those items is done at traditional auctions, Mr. Pascal said.

But auctions are inefficient because they attract a regional audience and few people bid on the assets companies are forced to liquidate, the emerging Web auction companies argue.

On the Web, the potential audience is larger. The bigger the audience, the greater the chance an asset will be purchased, on-line auctioneers say. More potential buyers also makes bidding more vigorous and can boost the purchase price.

That makes on-line auctions valuable to creditors, because Web deals can help creditors of failed companies recoup more money than they would recover at traditional auctions, Boston-based bankruptcy lawyer Warren Agin said.

The sites that market assets of bankrupt companies aren't specializing in nickel-and-dime trinkets. On Ebay.com, the world's largest on-line marketplace, the average transaction amounts to $40. On Bid4Assets, it amounts to $25,000.

Last month, an auction on Bid4Assets resulted in the sale of the former presidential yacht USS Sequoia, used from the Harding administration in the 1920s forward, until President Carter sold it in 1977.

Story Continues →