[arin-ppml] ARIN-prop-170 Transfer of Number Resources in case Bankruptcy

Astrodog astrodog at gmx.com
Fri May 11 01:13:25 EDT 2012

On 5/10/2012 10:38 PM, John Curran wrote:
> On May 10, 2012, at 5:47 PM, Astrodog wrote:
>> I don't see why a bankruptcy sale of networking equipment is somehow
>> distinct in allocation terms from an entity selling the equipment
>> without entering bankruptcy. ARIN does not allow automatic transfer of
>> number resources in the latter case. If the purchasing entity intends to
>> continue to operate the network of the bankrupt entity similarly to the
>> way the bankrupt entity was, meeting the needs requirement should be
>> trivial, and the safe harbor provision proposed above would ensure that
>> such a transition could be performed relatively seamlessly as a standard
>> 8.3 transfer.
> In the case of an entity acquiring the network operations of another firm
> and continuing to operate it in a similar manner, we already process these 
> transfer requests in accordance with NRPM 8.2 (mergers and acquisitions).  
> This applies equally well to networks which are sold as part of the normal
> bankruptcy process, and hence it is not exactly clear what additional 
> benefits the "safe harbor" approach would provide over existing policy.

I believe one of the advantages of such an approach is to avoid the
legal ambiguity the original policy proposal is designed to handle. By
reverting the address space to ARIN upon entering
liquidation/bankruptcy/etc, then reissuing the space to the purchaser,
the property issue is much clearer, as ARIN is allocating the same block
to the purchaser as a matter of convenience for all involved, as opposed
to the original entity having the ability to initiate the transfer under

Part of the legal problem that 170 seems to be designed to handle
originates in allowing the bankrupt entity to direct the transfer. A
bankruptcy court can order various things *because* the originating
entity has that ability. If losing control of the space was "automatic"
if an entity ceases functioning, a bankruptcy court attempting to
maximize value for an entity's debtors no longer has the ability to
order a transfer, as the resources are no longer controlled by that
entity, thus avoiding the potential for a bankruptcy court to order a
transfer that would violate ARIN's policies.

The existing policies also do not seem to explicitly state that a needs
test is required to complete the transfer, ala 8.3, simply that if the
resources are not justified, ARIN will work with the new owners to
return/aggregate/transfer/reclaim the resources. No mechanism seems to
exist for ARIN to actually test for this need to complete the transfer.
Are you aware of any transfers under 8.2 that have been significantly
altered after the fact due to failing the needs requirement? I'm curious
as to how this process works, exactly, from the perspective of a
purchaser. The existing guidelines for completing the transfer do not,
as far as I can tell, explicitly require a needs test the way 8.3
transfers do.

Do you have any thoughts as to what a policy like this entails, in terms
of administrative and legal overhead, for ARIN?

--- Harrison

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