Sedo will now try and pull the wool over peoples eyes, it is a common practice when lawyers have been brought in and we know Sedo lawyers have already tried via telephone to disuad one prospective plaintiff. (Strange that by the way that Sedo's lawyers know how to use the phone to contact winning bidders from the auction but Sedo staff running the auction don't seem to know how to contact the winners by using a telephone!)
All the plaintiffs have to do is prove negligence, and I am sure 90+% of us domainers can see negligence coming out of Sedo's ears on this one. However, Sedo will have been advised by their lawyers not to even contemplate re-running the auction because in a court of law that would be seen as an admission of guilt on the charge of negligence.
The 'system' is meant to have crashed some 5-10 minutes before the end of the auctions, but evidence is being brought forward suggesting there was not a crash but a slow-down in server speed (this could and likely would appear to some users as if the system wasn't working). However taking the crash scenario why was not an automated system in place to immediately 'halt' the auction and this displayed to users? Also the fact that Sedo's postings following the end of the auction time encouraged 'NEW' bidders to come to the auction and bid, this is damning evidence of 'bad faith practice'.
All it will take is one plaintiff to get Sedo into the court room (especially in the US) and Sedo will have to provide all computer and telephone logs and records, bidding histories for the auctions, provide the number of users that apparently suddenly logged on with 5 minutes to go to the end of the auction and show how this vast number (most probably less than 100 by the way) would bring their servers to crash (Sedo's term). Even if this were all so as Sedo have stated, then they are negligent because their machinary was obviously negligent.
A simple contract is formed in an auction when the hammer falls. In an online auction that is when the designated time has elapsed. If Sedo had suspended the auction with just one second to go before the designated time then they could argue successfully that the auction did not complete. However, it was some time after the end of the auction (the designated end of auction time) that Sedo decided to act in their cavalier manner and in essense not extend the original auction by the time they claimed was lost due to the servers going down but by an arbitrary 2, 2 1/2, or even 3 hours depending on which Sedo answer you wish to take, this in essense is actually a different auction, for the same goods that were now not Sedo's to auction as they already formed part/s of contracts for transfer from mTLD to the winners of the original auction.
At this moment Sedo will try and get the second auction winners to pay and to transfer the domains to them as quickly as possible so as to create the legal argument that the original winners should in essence sue the secondary winners and not Sedo (another common legal ploy - remember Sex.com and all the other domain hijackings where the first thing the hijacker does is to make a long chain of ownership by transferring away from themselves to others).
This has already hurt Sedo as reports come in of parked domains being moved away from Sedo literally in 1,000's at a time. The US lawyers Sedo will have to employ to defend the claims will want paying if not up front at least intermitantly, and where will Sedo get the $millions to pay them (no exageration there by the way), obviously through their biggest income source - click through revenue from the parked domains. This can only be done by reducing even more the percentage paid to the domainer who parks their names at Sedo.
Sedo is this time in a no win situation. The question is will this lead to the collapse of Sedo? I think it more than likely will.