A domain is free to register. You register it as per your registrars normal procedure. In some faraway country (say the USA) a bankruptcy court decided that this domain that you just registered was part of the original holdings of the company in bankruptcy.
Even though the company (or the receivers) let the registration lapse (presumably because they were not doing too well financially).
And so the court will order that domain that you just paid for to be assigned to some third party.
That's pretty perverted.
If there was an unbroken chain of ownership from the moment the original company registered it to the point where the domain was levied during the bankruptcy proceedings I can see the logic of it, but once the company and/or the receivers let the domain lapse they technically forfeited it and a judge should not cooperate with them to reverse agreements between two other consenting parties (you and the registrar) in order to re-assign that domain to the pile of assets in the bankruptcy, especially not 'ex parte' (so without hearing either you or the registrar as to how you came into possession of that domain).
Otherwise from now on there is no such thing as a 'lapsed domain' any more. And in fact, domains would not longer be 'property'. (I don't think they're property to begin with and this case is a nice example of why I think they aren't even though everybody treats them as such.)
U.S. bankruptcy law gives courts great latitude to reverse transactions involving the property of a bankrupt entity, because a lot of abuse of the bankruptcy system is possible otherwise.
The problem here is actually with VeriSign. Any time you transfer an asset to an entity but retain the right to get it back under certain conditions, you have to think through what will happen if that other party enters into bankruptcy and those assets get sucked into the proceeding. It's wrong for them to assume they can resell the domain name the second it lapses.
That seems a bit odd, as it's at most leased, not owned by them; the lease expired, so it is null and void and is therefore not an asset. I'd thought UDRP was fairly clear about this...
And the order isn't against the new owner - so it sounds invalid to me? Not a lawyer, but Verisign should at least have questioned these. I have no idea if they'd have a claim, or what kind of claim, or who to.
A domain is free to register. You register it as per your registrars normal procedure. In some faraway country (say the USA) a bankruptcy court decided that this domain that you just registered was part of the original holdings of the company in bankruptcy.
Even though the company (or the receivers) let the registration lapse (presumably because they were not doing too well financially).
And so the court will order that domain that you just paid for to be assigned to some third party.
That's pretty perverted.
If there was an unbroken chain of ownership from the moment the original company registered it to the point where the domain was levied during the bankruptcy proceedings I can see the logic of it, but once the company and/or the receivers let the domain lapse they technically forfeited it and a judge should not cooperate with them to reverse agreements between two other consenting parties (you and the registrar) in order to re-assign that domain to the pile of assets in the bankruptcy, especially not 'ex parte' (so without hearing either you or the registrar as to how you came into possession of that domain).
Otherwise from now on there is no such thing as a 'lapsed domain' any more. And in fact, domains would not longer be 'property'. (I don't think they're property to begin with and this case is a nice example of why I think they aren't even though everybody treats them as such.)