Not sure if this has been posted..Mastro in the Chicago Tribune
 

I was reading my Morning Tribune and ran across this "problem solver" column that I pasted below as I couldnt get the link to work. Looks like someone else is having issues with Mastro.

Hopefully this issue is settled as mentioned in the column. This type of thing definitly does not make the world of sportscards look very good...or does it really matter to someone outside our hobby?

Here is the link if anyone needs to go directly to the Tribune and read it

http://www.chicagotribune.com/news/c...2716082.column


Mastro Auctions slow in paying seller after company halted business
Jon Yates

What's Your Problem?

August 6, 2009
E-mail Print Vote For many baseball fans, it would be like manna from heaven -- an unexpected inheritance of extremely rare, extremely old baseball cards.

But Louis Dodaro fancies himself a surfer, not a baseball fan.

So when his uncle passed away last year and left him a stash of 1930s Goudey cards, the Riverwoods resident simply shrugged.

"I know some people would be drooling over this," Dodaro said. "I'm not a baseball card collector. I really don't know too much about this."

Still, he realized the cards that were at least 70 years old were valuable. So he plucked out a few of his favorites (including a couple of Lou Gehrigs) then gathered the remaining 136 cards for sale.

In September, he took the cards to Mastro Auctions in Burr Ridge. The 13-year-old company had received international media coverage for selling a lock of Elvis Presley's hair for $115,000, the infamous Steve Bartman baseball for $106,600 and a 1909 T206 Honus Wagner baseball card for $1.62 million. "They had a great reputation," Dodaro said. "I was very selective about these cards and who I went to."

But Mastro also had experienced its share of controversy. As reported in the Tribune last August, federal agents investigated the company for possible "shill bidding" in which bogus bids are submitted to drive up the price. No one has been charged.

Dodaro said he thought his cards were in good hands.

"I felt very comfortable," he said.

He felt even better when the cards sold in Mastro's February auction. But Dodaro said he wasn't told the sale price -- or how much he would receive. Weeks later, before Dodaro received payment, Mastro halted business.

On March 6, a group of Mastro employees bought the firm's assets and opened a new company, Legendary Auctions, based in Lansing.

Dodaro said he contacted a former Mastro employee, who promised he'd be paid in March. When that didn't happen, he called again and was told he'd be paid in June. Again, he did not receive a check.

By the time he contacted What's Your Problem? in July, he had almost given up.

"I have no indication when I'm going to get paid or even if I'm going to get paid," Dodaro said. "I called a couple times. They told me to call the controller for Mastro. I called. He never called back."

The Problem Solver called Doug Allen, a former Mastro employee who is president and chief executive at Legendary Auctions.

Allen said he no longer has any responsibilities at Mastro, which shut down because of financial problems. The first priority, he said, was to pay back money it owed to the bank. After that, Mastro intended to pay Dodaro and all other consignors, he said.

"They're not filing bankruptcy. They're not insolvent," Allen said. "They just have liquidity issues."

He said he remains in contact with the folks at Mastro, but Legendary Auctions is not responsible for Mastro's debts. Legendary, he said, is a completely separate entity.

"It's not a shell game where we said, 'Let's close this company and start a new one,' " Allen said. "It's not that."

Allen said he retained some records from Mastro, which showed Dodaro was owed $1,800 for his baseball cards. He promised to call Mastro's controller, Walter Tomala, and ask where Dodaro's money is.

The Problem Solver left repeated phone messages for Tomala but did not hear back. On Monday, the Problem Solver called Legendary Auctions' vice president and chief operating officer, Mark Theotikos, who also is a former Mastro employee. Theotikos promised to contact Tomala as well.

Tuesday morning, Tomala left a message on the Problem Solver's voice mail that said Dodaro's $1,800 check was in the mail.

"That's terrific," an elated Dodaro said. "When the check actually shows up and clears, I'll feel pretty good about it."

Dodaro said he plans to keep the half-dozen cards he still has, including the Gehrigs.

"They're probably going to be something I pass along to my future family," he said.

My favorite line: "It's not a shell game where we said, 'Let's close this company and start a new one,' " Allen said. "It's not that."

Doug is like the baseball player who holds out for a bigger contract and then turns to the camera and says "it's not about the money."

"It's not a shell game where we said, 'Let's close this company and start a new one,' " Allen said. "It's not that."

:confused::confused::confused:

As Hamlet said, the lady doth protest too much, methinks.

This crap has gotten so much negative public exposure,,, another black eye for the hobby and who do we have to blame for it?

"It's not a shell game where we said, 'Let's close this company and start a new one,' " Allen said. "It's not that."


I love that quote.

It reminds me of the Wizard of Oz....
"Pay no attention to that man behind the curtain."

I guess I don't see this as a black eye for the entire hobby. When a store I have a gift certificate for goes belly up, I don't hold the entire industry responsible, just that store and their owners.

I see this as a black eye for Mastro, for sure, and for the principals involved. The attempt to walk away from a financially struggling company and start up another company, with the purchased assets of the first, while not addressing the liabilities, is both troubling and transparent.

I don't even think that Mastro's, er... I mean Legendary's biggest problem is bidders boycotting. They will still have some, if not most bidders. Their biggest problem will be consignors not consigning, going forward. If word is out industry wide that a company is having trouble paying consignors, it won't take long for those consignments to dry up. When that happens, the whole bidder thing takes care of itself, very quickly.

As far as the hobby goes, there are still plenty of auction houses around and most pay their consignors, and pay them on a timely basis.

Has anyone ever seen John Rogers and Doug Allen in the same room together?

Jim, what I should have said is that there are so many individual black eyes getting publicity in the hobby that another one just adds to the negative public perception, especially when it happens to the industry "giant".
The king is dead, long live the king.

That's fair enough, but there are far too many good guys in this hobby to tar them all with the same brush.

I agree that continuing negative stories make the hobby look bad to any outsiders (if they bother to read news stories about baseball cards anyway.) But these outsiders don't feed and don't fund our hobby anyway. We "insiders" do. And we can continue to help clean it up by funneling our consignments and our money to the guys we know are clean.

Mastro being unable to, and/or refusing to pay their bills, should leave no mark on the other guys who operate cleanly.

I'll also add that I'm not naive about what has gone on, and still goes on, at many major auction houses. Cards are "sold" and then up for auction again far too often to be a coincidence. The volume of high grade material available is striking. I've collected, on and off for close to 30 years. How is it that there is more "mint" material available than there was 30 years ago. Not just a little more, but much more. Big finds account for some, but who is kidding whom? (Barry, did I get that who/whom thing right?)

I collect both Sports and Non-Sports. Looking at shows and auctions would lead me to one startling conclusion. For the last 100 years or more, people who collected routinely took better care of their baseball cards than they did their Non-Sports cards. Those damn kids were preserving their T206's carefully, while trashing their T59's! They were protecting their 1933 Goudey Baseball Cards at the same time they were destroying their Indian Gum and SkyBirds!

Obviously, like in every other phase of life, fraud and deception follows the money. It hit the Baseball Card hobby years ago while we weren't paying attention. It only grazed Non-Sports. It hit the autograph industry hard, while missing other collectible hobbies.

While I appreciate the help of the media and law enforcement, only collectors can clean it up.

ketap company
 

Of course, the website could be out of date, but according to the Illinois Secretary of State, Mastro Auctions now goes by the name Ketap Company and the President of Ketap is none other than Doug Allen.



--------------------------------------------------------------------------------
Entity Name KETAP COMPANY File Number 61148272
Status NOT GOOD STANDING
Entity Type CORPORATION Type of Corp FOREIGN BCA
Qualification Date (Foreign) 07/10/2000 State DELAWARE
Agent Name RICHARD L WEISS Agent Change Date 06/26/2007
Agent Street Address 801 SKOKIE BOULEVARD 100 President Name & Address DOUG ALLEN XXXXXXXXXXXXXXXXX, BURR RIDGE, IL 60527
Agent City NORTHBROOK Secretary Name & Address MATTHEW ROSZAK SAME
Agent Zip 60062 Duration Date PERPETUAL
Annual Report Filing Date 00/00/0000 For Year 2009
Assumed Name INACTIVE - MASTRO AUCTIONS, INC.

Old Corp Name 03/13/2009 - MASTRONET, INC.

Looks good to me.:)

Edited to add you can just as easily get away with "who is kidding who" as in "who's who" (you wouldn't see "who's whom").

As I get older I forget the rules anyway.

But wait, Dougie has nothing to do with Mastro. And nothing to do with paying off Mastro's debts to consignors. And has nothing to do with any lawsuit against Dave Forman. Yet you mean that Doug Allen is presently the President of Mastro? Now it makes sense: just have your dogs bark at Mastro's President (Allen) and you can get paid by Mastro's President (Allen).

I am stunned at this turn of events.

Jim- better leave the cleaning up to law enforcement, because I don't believe collectors are able to do it themselves. Collectors are addicted to the stuff, and when you're addicted you need help from the outside.

Jeff one would like to think the Illinois official state website would be reasonably up to date, and it does mention the name change on March 13, 2009, which I believe coincides with the Mastro-Legendary transaction. So apparently something was filed at that time to indicate the name change but that filing did not indicate a change in the president. But, as I said before it could be inaccurate. No information about Ketap's officers is available through the Delaware secretary of state's website.

Translation for Jeff's post:


Captain Renault: I'm shocked, shocked to find that gambling is going on in here!

[a croupier hands Renault a pile of money]

Croupier: Your winnings, sir.

Captain Renault: [sotto voce] Oh, thank you very much.

[aloud]
Captain Renault: Everybody out at once!

That's a huge part of the problem Barry. This stuff is like heroin for some. We're just pumping it into our veins. But some get upset when the media reports problems.

O'Keefe fielded a question at the dinner that asked something like this "I saw a dad and his son, going through the show today, buying lots of cards and spending $10-$20. Why don't you report that?"

I almost spit out my (free) beer. Why would an investigative reporter write about that?

As Lance said on one of the other threads, we have to control it by who we give consignments to. The guys with no decent consignments will get poor sales results and that will take care of them.

Because we're talking about some auction houses and their relationships with consignors/bidders, and because Anthony let the Kevin Bacon/Animal House genie out of the bottle, this also seems appropriate:

http://www.youtube.com/watch?v=qdFLPn30dvQ&NR=1

Jim- I was more than a bit skeptical when I saw the "I'm not bidding in Legendary Auctions" thread. I suspect most of those who vowed to boycott will end it at the first sign of a card they need.

I don't mean to be cynical but that's part of the problem. Auction houses know how obsessed collectors are and they take full advantage of it. They know that they can get away with just about anything and the collectors will still come back.

And they long ago identified those collectors who won't stop bidding on an item until they get it, regardless of the price. Those are the ones, sadly, who were shilled the most.

I agree that most houses will laugh off any attempted bidder boycott. But not paying consignors, and a subsequent consignor boycott, will catch up to them much faster.

Does anyone know if Bob Gibson has loud, barking dogs?

Auction house exec: I'm shocked, shocked to find that shilling is going on in here!

[a collector hands the exec a pile of money]

Collector: the winning bids, sir.

Auction house exec: [sotto voce] Oh, thank you very much.

[aloud]
Auction house exec: Everybody out at once!
------------

I agree that consignors can and should boycott.

Hopefully the more these articles make it into the mainstream media, more consignors will know of the issues. For someone like the consignor of the Goudey lot described in the article he wouldn't otherwise have any way of knowing about these issues. I can't imagine that anyone who knows they may not get paid for months and even then only with a fight would consign to such a house.

isn't Ketap backwards for Patek? Maybe former KC Royal Freddie Patek is somehow involved in all this..........

I can't imagine that telling Bob Gibson his consignment check was delayed would end well.

-

"It's not a shell game where we said, 'Let's close this company and start a new one,' " Allen said. "It's not that."


Riiiggghhhtttt.....

Well that settles it then. We were wondering.

I am still trying to digest this one Peter Spaeth posted yesterday.

From the NY Daily News
Allen says the matter is out of his hands. The responsibility to pay consigners and other creditors belongs to Mastro Auctions, which was owned by Silk Road Equity. Silk Road has a small stake in the new auction business, Allen adds, but Legendary Auctions is a completely separate entity from Mastro Auctions. "I will share their frustrations until everybody who did business with Mastro Auctions is made whole," Allen says. "I wish we could meet those old obligations and start with a clean slate. But legally, we have done everything appropriate."

I was remaining neutral with regards to my stance on the Mastro/Legendary issues however the above is completely distasteful and unacceptable. If Doug is being quoted accurately his days are numbered in the hobby.

This is exactly what I said a long time ago...I am certain they did everything legally to make sure their new enterprise has nothing to do with Mastro. It's sad that the only people Mastro seems to be taking care of are the ones that come to this board because they know a good portion of their customer base participates or reads this forum.

How can Doug distance himself from Mastro when he's the President of Ketap, the company formerly known as Mastro? Doug IS Mastro.

And how would you like to be a consignor of Mastr--woops Ketap--woops Legendary when the music stops and they've got your cards and money? And Doug doesn't take your calls or emails? Oh wait -- that's already happened.

Ha! Now THAT would be hilarious!

It is not sad that they are only taking care of the people who come to this board. It is a sign of their immorality.

I apologize, in advance, if what I am about to ask has already been revealed on a prior related thread, but does anyone know what Doug's ownership stake in Mastro/Ketap is (or was) as well as his ownership stake in Legendary or it's parent company?

When I first read Ketap I read it as Kaput.

Greetings from the Illinois Secretary of State's resident vintage collector. I can vouch for the accuracy of our website. A lot of folks work very hard to make sure that website (www.cyberdriveillinois.com) is up to date and accurate. If you go to the corp/LLC search on the site and punch in Mastro, you'll see three or four companies using the name. It seems to me that the old Mastronet Inc. was parceled off into three or four companies. As a result, any creditor (a consignor) of Mastronet would most likely have to file a lawsuit and name as defendants all the new Mastro entities and let the courts sort out which one or ones have liability.

As a side note, Illinois Secretary of State Jesse White played minor league ball in the 1950s and was a minor league teammate of Ernie Banks. He was a pretty good second baseman and not a bad hitter.

Tony, thanks for that. So apparently as of today, Doug Allen is the President of Ketap, formerly known as Mastro Auctions, Inc.

So why does Doug continue to say that he has nothing to do with Mastro?

Jeff, perhaps holding that office is just a technicality?

Lol

The most stunning part of all this, for me, is the apparent failure to anticipate the reaction hobbyists would have to pronouncements of the sort Doug made today and previously.

I have tried very hard to stay out of this, but that last comment from Mr. Allen was, at best, absurd. IMO, all you have to do to see that Mastro/Legendary are the same enterprise is to be moderately literate.

Based on what I have read, if I was an unpaid consignor I would file an alter-ego/instrumentality lawsuit, allege fraud, name all of the companies, sue the principals individually, get the financials, and look forward to the depositions. I suspect they would be really ugly.

Kenny Cole

Doug might have to bring a couple of hats to the deposition -- white, as he is a great guy.

What if ????

OK so if Legendary is a seperate enterprise from Mastro
and Mastro now no longer exists.
What if the past people pay off their debt to Mastro?
It is said that they have hundreds of thousands outstanding from their past auctions.

Who get the dough?

I'm confused about so many issues concerning the old auction house and the new & improved one.

Jay, Mastro still exists, it just changed its name to Ketap. So in the first instance that entity would get any money collected by or paid to Mastro.

What a great deal to get all the assets and none of the liabilities. I wanna make a deal like that.

Of which Doug is the President. But he claims that he's not responsible for paying any of Mastro's debts off.

The problem with public pronouncements is that they are public and thus, easy to force-feed the deponent who, after all, is sworn to tell the truth. I have watched this cluster-f___ unravel with a fair amount of amazement at the pronouncements, both written and oral, which have been made. If I was trying to skate paying folks I owed money to, I don't think I would probably have said some of those things.

I'd pony up some cash if for the next name change, Legendary becomes:

Drama......
 

In all seriousness i really do not get it. Doug and these guys are easily found. If this dude owed me money it would have been collected at the National. In my opinion they are just waiting to see if some of the consignors just go away so they can get out of paying. I strolled by Doug and the boys on several occasions and they looked at ease in my opinion as if they had no worries in the world.

Pride goeth before destruction, and a haughty spirit before a fall.

That proverb has rung true for centuries, whether it's shekels, dollars, or vintage baseball cards.

If Silk Road Equity's website is to be believed, it is a firm with substantial capital. One would think a sounder business strategy would have been to inject the cash necessary to pay off consignors (could it have been THAT much?), rather than to leave them unpaid, and generate a tremendous amount of bad will by insisting they aren't Legendary's problem.

Peter, you're forgetting the Mastro Rules of Conduct which are tattooed on every employee's arm upon hiring:

1) Money goes in, not out;

2) Lie always (even when unnecessary -- sometimes you just need to practice);

3) Leak lawsuits to the press to avoid questions about 1);

3) See 1) to 3).

"We typically make $1 million to $20 million equity investments, alone or as part of a syndicate, and can go much higher given our stable of relationships with institutional investors. Our financial strength gives us the flexibility to provide follow up rounds of funding and support your business through differing market conditions."

Hmmmm..... one would think.... oh well.......

I hate to keep beating a dead horse here, but does anyone know (rather than speculate) what Doug's ownership stake in Mastro/Ketap is/was and what it is in Legendary?

The issue is not really piercing the veil to get to Doug individually, in my opinion, but rather, whether Legendary (the ongoing business) is liable for Mastro's debts on an alter ego and/or fraudulent conveyance theory.

"As far as I can tell, your entire enterprise is nothing more than a solitary man with a messy apartment, which may or may not contain a chicken!"

"And with Darren’s help, we’ll get that chicken."

Rob, Thanks for getting me thinking.

That seems to be the issue. It doesn't sound like buyers never received their cards, but consignors didn't get the cash.

So it's safe to buy but not to consign, apparently.

Who then, would consign anything of significant value to them without a significant cash advance?

"You know Darren, if you would have told me twenty-five years ago that some day I'd be standing here about to solve the world's energy problems, I would've said you're crazy... Now let's push this giant ball of oil out the window."

Right - I agree 100%. But, hypothetically speaking (of course), if such claims are viable (key words here: "if" and "viable"), the same facts might (key word here: "might") implicate a veil piercing claim against the orchestrator(s).

Steve,

Your fly is open.

Signed,

Dean Jones

Good point. To take it a step further, aren't there enough other viable big (or medium sized) auction house consignment (not to mention non-auction house) options out there?

Dave,

I'm not an attorney, but some here would tell you that receiving your cards does not put you in the clear. If Mastro never pays the original consignor, no title has passed. The deal is incomplete and your cards could be confiscated at a later date and returned to the consignor.

Hypothetically speaking, it would be very interesting to see the documentation of the Mastro/Legendary transaction.

I agree, hypothetically (of course). :D

trans⋅ac⋅tion  Pronunciation [tran-sak-shuhn, -zak-]
–noun
1. the act of transacting or the fact of being transacted.
2. an instance or process of transacting something.
3. something that is transacted, esp. a business agreement.

If you are a Feb. Mastronet consignor who has not been paid until now(like me),and you've received the Aug. Legendary Auction catalogue,do this: re-package it and send it back to Legendary with Attn: Doug Allen on the front.Media mail will do fine.Include a courteous note that you would love to bid on their auction but you have not as yet received your Mastro consignment money.It can't hurt and you are simply stating a fact.I am doing this as my protest.

A nice way to say it. I wish that their next auction had more in it so that you could be paid back faster.

How could the auction have more in it? The word is getting out that consignors from Feb. have not been paid. Who wants to consign and worry about not getting paid?
Anybody want to forecast an over/under number on how long Legendary can stay in business. I make the line 13 months, over or under?

swimsuit models.

Gosh I think they may too great to even get to 13 months. Unless of course they can promote their business by listing some cards for $25,000 on ebay.

Already been done
 

American Memorabilia is already doing that. Unless Doug wants to put on a speedo (great, there goes my ability to sleep or keep down solid foods for the next few days.)....

I took a quick look at the Legendary August auction and it was a strange mix of some quality stuff and some "let's add more lots in spite of the values."I am sticking with my protest plan and will return the catalogue this weekend.

Is it not true that Legendary bills consignors for getting their items professionally graded?I would like to know since a friend of mine consigned to their first auction and received a bill for 1,000.00 for getting some of his stuff graded.Anyone out there have the same experience?

Unless I misread the post (very possible at my age and as a micro-mind), there is a post on the Non-Sports board where they sent out and billed a lady $40,000 for grading. I am sure at a level like that it was something that was agreed to beforehand.

I thought that Mastro had a deal with grading companies to have cards graded for $7 each irrespective of tier, but I guess that is not true. Doug Allen told me that the cost of grading a single card was $250, and that was the reason why Mastro could not pay the remaining $200 due to me from my February consignments.

$250 seems like a lot of money to grade one card, but I told Doug if he could show me a copy of the PSA invoice showing the $250 charge, that we could just call it the day. It has been three weeks and I still have not heard anything from Doug.

$250? I think that's the service tier where the return the card via unicorn.

Well played.