Letter to the Editor

In the September 2000 issue of the <i>ABI Journal,</i> two articles addressed "dot.com" failures.

</p><p>Both Robert Gebhard and Dr. Carl Steidtmann focused on traditional bankruptcy
methods of maximizing value, including asset sales (of domain names, intellectual
property, customer lists, etc.). But there are other alternatives for realizing the
value that remains in these distressed ventures. Asset sales, even on an accelerated
basis in bankruptcy, still require significant dollars for professionals and time—the
enemy of both the distressed business and buyer. If the assets cannot be acquired
quickly, much of the value is lost.

</p><p>Professionals advising these businesses need to review all the alternatives to effect
the transfer of the remaining value. This should include state law alternatives,
including bulk sales (in those states where bulk-sales laws still exist), secured
lender foreclosure, negotiated sales with some form of creditor composition on an
out-of-court basis and even general assignments for the benefit of creditors. Also
requiring attention is the need to carefully review licenses and other contract rights,
where recent decisions can affect the saleability of assets. Not every alternative will
be the best alternative for all cases, and sometimes chapter 11 or chapter 7 will
be the better way to sell assets.

</p><p>The practical reality is that most high-tech start-up ventures will in fact fail.
Those that survive will be the result of better management, better financing and
support of the buying public.

</p><p>Geoffrey L. Berman

</p><p>Development Specialists Inc., Los Angeles
</p>