On March 25th, 2011, CouchSurfing International and the New Hampshire Attorney General's Office acting through the Director of Charitable Trusts filed a petition with the Merrimack County Probate Court seeking to transfer the assets of the non-profit organization to a for profit corporation of the same name.
On April 7, the court determined, that, although the petitioners named no other parties, there may be members of the public, individually, who wished to be heard although not named as a party and since it would be impossible to determine who the interested parties were in this matter, found that it was appropriate to provide notice to any unknown interested parties by publication. Apparently unaware that the interested parties could best be notified through the CouchSurfing website, the judge ordered the publication of a legal notice in a newspaper of statewide jurisdiction. Any person with an objection to the petition could direct any written comments and inquiries within thirty days to the Merrimack County Probate Court.
The legal notice was published in the Manchester Union Leader on April 15, 22 and 29.
The day after the first publication in New Hampshire of the petition to privatize CouchSurfing, on April 16, Casey Fenton wrote to volunteers (who apparently he had identified as "interested parties") in a Team Newsletter:
“I want to ask for your trust and patience as I try to share the news with you in as much detail as possible as it happens. It's important to me that I communicate clearly about where we are now and what's ahead. However, we're still working out all the details. We're hoping to have everything sorted out by June. For now, I'd like to give you an overview of our current situation.
…after a lot of research, I think we've found a place for CouchSurfing in one of the legal structures pioneered by these other idealistic groups.
Unfortunately, I can't give you more details right now. We are still in the middle of the legal process necessary to create a new structure for the CouchSurfing organization.”
On July 6th, Richard A. Hampe, Probate Judge, granted the petition based on the lack of any objection.
The petition proposed that the business assets of CouchSurfing be "privatized", that is, transferred to a successor for-profit entity for fair market value.
The court left it up to the petitioners to determine the fair market value of the assets. An asset valuation by Grant Thornton, commissioned and paid for by CouchSurfing, assessed the value at $637,800 as of December 31st, 2010, i.e. less than 1/3 of the organization's 2010 revenue. This is the amount for which "Better World Through Travel, Inc.", the new C-Corporation founded by Casey Fenton and Daniel Hoffer in the State of Delaware, acquired all non-profit assets, including the trademarks, website code, user database and all funds in the bank accounts ($327,358 as of 31 Dec. 2010, presumably more by the time of the transaction).
The funds for the acquisition of the non-profit assets came mainly from two venture capital firms, Benchmark Capital and Omidyar Networks, which for a capital contribution of $7.6 million received shares of the new corporation (a small minority stake according to Casey Fenton and Daniel Hoffer, who issued majority shares to themselves) and seats on the Board of Directors of CouchSurfing.