Terry Drayton

Terry Drayton regained control of Count Me In on Wednesday, a strange twist given that the embattled founder of the Bellevue Internet company apologized profusely earlier this year for bungling payments to more than 200 non-profit and youth sports organizations that utilized the company's online registration technology.

The missed payments, totaling $5 million, led to an involuntary bankruptcy filing and a court-led seizure of the business five months ago.

In Wednesday's ruling, federal bankruptcy judge Samuel Steiner approved the sale of the Count Me In assets for $200,000 to Rainier Software, an entity led by Drayton.

The asset sale came over the objections of Count Me In creditors, including a strongly worded filing by rival bidder, The Active Network.

In court documents Tuesday, The Active Network -- which also operates an online registration system for sports leagues -- called the auction process "flawed" and questioned the integrity of the bankruptcy trustee.

"...Active objects to the sale both on the grounds that the sale was unfair and that the trustee improperly accepted a lower price than he would have received had the sale been conducted properly," the company wrote in the filing.

In a declaration, the registrar for the Murfreesboro Soccer Club -- one of the more than 200 sports clubs owed money -- said she was "deeply troubled" that the Active Network was being precluded from making what she believed was a higher bid for the assets.

But a number of other sports clubs offered their support for Drayton's new company including customers who preferred the online registration technology over that of the Active Network. Greg Swain, president of the San Jose American Little League, wrote in a May 15 letter to the court that he had experience with both systems and that Count Me In's technology was superior.

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"I would do anything in my power to see that this small company with outstanding technology be allowed to continue to stand alone," he wrote.

Doug Dornacker, vice president of the Holiday Park Baseball Club in West Des Moines, Iowa, said he was "appalled" by the way Count Me In managed its financials. But he too argued that the software was better and cheaper than other offerings, pleading with the judge that it be maintained.

"It will be a great hardship for our club (and many others) to shift all of our information and management capabilities to another provider and software that, in our view, will be inferior to what we already have at a price point that is much higher," Dornacker wrote. "...It is worth much more in service than out of service."

Ultimately, the bankruptcy judge ruled in favor of Drayton's $200,000 stalking horse bid. And he found that the trustee operated the auction by the rules, noting that no other bids met the specific criteria set forth in the purchase agreement.

"The sale procedures and auction afforded a full, fair and reasonable opportunity for any entity to make a higher and better offer to purchase the purchased assets, and no other entity has made an offer higher or better than the transaction described in the agreement," Steiner's order says.

Details also emerged about the ownership structure of Rainier Software. The chairman and largest individual shareholder is Gregg Bennett, who holds 29 percent of the company. Other board members and shareholders include David Thacher, Michael Weaver and Drayton, who owns 10 percent. 

Other investors include Keith Streckenbach and John and Gloria Drayton and Rainier Software employees, who together hold 22 percent of the company.

In an interview with TechFlash last December, Drayton expressed his desire to repay angry customers.

"I take responsibility for it, full stop. Getting our clients paid is the only thing that matters, so that is all I am focused on," Drayton said at the time.

Now, after months of bankruptcy proceedings and litigation, it looks like Drayton will have a second chance to try to redeem himself.