Peter and Adam,

A thought just occured to me, and I should have mentioned this before. Wasn't thinking, duh! If due to a bankruptcy there could be a potential seizure of consigned/stored assets at PWCC or Goldin because of them being a consignment seller/auction house, wouldn't the simple fix be to set up their "vaults" as separate legal entities then? Makes perfect sense to keep the cards and items they store separate from what they are selling/auctioning off, and also makes perfect sense for liability protection purposes. Should also help to remove any gray area on whether a card/item is being stored subject to a rental agreement or has been consigned for sale.

Now the question is, did PWCC and Goldin set up these "vault" operations as separate, legal entities from their consignment/auction businesses? I would guess yes on both counts as despite what others may say and think of them, they are both run by savvy and smart business people. I know if either one had been my client, I would have insisted they set up these "vault" operations as separate businesses.

So, does anyone know if PWCC and Goldin set their "vault" operations up as separate business entities?

In addition as at some point this will lead to ongoing revenue vs cyclical revenue from one time sales of items. Based on what I briefly read the fees are free for a year or so but will kick in eventually.

Banks are subject to separate and very specific regulations under Federal and state laws, so it is not analogous and does not carry the same risks. You are also granted specific possessory rights in the box itself; you aren't handing the contents to the bank and letting it do whatever with it. A separate warrant or court order is needed to enter the box. Leases are technically conveyances of an estate in land; the land becomes yours insofar as the authorities are concerned, which is why the cops need a separate warrant to enter each apartment. Storage lockers are much the same as leases; you are granted exclusive right to occupy the space, which is why the entry into and disposition of contents is highly controlled (see Storage Wars) and again, separate warrants needed.

AHs are just another business. Unlike the storage locker you are not granted an exclusive right to enter and use the space. You just hand over your stuff.

Alot more involved then I thought and alot of differences in opinions on how they work and how it might impact the people that use it

I will pass on it for now

I'm not sure you're renting a specific space in one of those vaults, as opposed to just making a bailment to the vault owner to store your cards for you. Until someone corrects my interpretation of the UCC which seems clear on its face I am standing by it in terms of consignment vs. bailment and UCC filing requirements. I do agree safety deposit boxes and storage lockers are in a different category for the reason you are obtaining righs with respect to a specific space, like a lease.

I figured the banks had separate rules so that seizure of assets didn't apply to safe deposit box contents, and pretty much knew the rental/leasing of storage units/apartments and such were also subject to do different rules and protections from the seizure of contents as well. But what if as I suggested, PWCC or Goldin set up an entirely new legal entity and business, separate from their auction/sales businesses, in a separate physical location from their AH/sales businesses, and actually kept people's storage "vault" items there in say separate spaces like they do with post offices boxes where you rent the mail box space and they separate your mail from everyone else's and keep it in your designated, separate mail box or space until you come and pick it up. I am fairly certain your mail is protected from such seizure if it is at the U.S. Post Office. What I'm referring to is for things kept and held in mail boxes run by private companies that offer a similar P.O. Box type service to individuals, under a specific, written rental or service agreement. Would that type of operation keep a person's assets safe from seizure were the private mail box company to go bankrupt? And if so, wouldn't such protection from seizure in that case also carry over to assets held in a "vault" operation, as I described above with a written and signed rental/service agreement, if kept completely separate from a related AH/sales business?

Believe me, I get that this is not a straightforward question with an easy, simple answer. And exactly why I was asking specific, detailed questions such as if a "vault" operator did have separate, sealed boxes or spaces where they stored a person's cards/items, instead of just putting everyone's stuff on the shelves in one big room or warehouse. Was being persistent with the questions to see if there was a particular scenario and set of circumstances from a legal standpoint where a person using a "vault" could be safe from seizure in the case of bankruptcy by the "vault" operator. And yes I know, probably a lot of people reading this stuff are wondering why should we be wasting time talking about something like this because the chances of one of these "vaults" actually going bankrupt is extremely remote. But if one of the "vault" operators is still involved with and potentially under an ongoing FBI investigation, that could possibly change the odds, right?

So in that case, if I was someone on this forum reading this, and also using such a "vault" service to hold my valuable cards/items, I may want to double check with that "vault" service to make sure they were set up and operating in such a specific manner so as to protect my valuable cards/items from such seizures. And if I found out they weren't protected, I may seriously want to look into making protective UCC filings just to be extra safe, or maybe look into doing something else entirely.

Maybe Adam can shed some light on this question -- suppose your inventory in the vault is changing on a very frequent basis. Assuming a filing is necessary or helpful, and I don't read the UCC that way but let's assume, do you have to make a separate filing every time you add an "asset"? I would imagine you do, that a blanket filing wouldn't really provide notice to anyone.

And exactly why I was bringing this all up, so others on the forum would possibly have a more thorough understanding of potential issues or concerns with using such services, and therefore be able to make better, more informed decisions for themselves about them.

Leaving aside whether there are really any legal concerns, I just wouldn't like the idea of having my cards in someone else's control hundreds or thousands of miles away, speaking as a collector of course not a flipper. It's one thing to go over to the local bank to look at your cards or take them out, quite another for them to be in Oregon or Delaware or whatever. And I wouldn't want any part of using them to avoid sales tax.

I'm with you 100%. I actually enjoy having my cards around and digging through them every now and then and re-discovering things I'd gotten a couple decades ago and had since forgotten I had.

Perhaps in the not too distant future all new cards will be issued only in electronic form and you'll store them in a wallet in the cloud, or whatever the jargon is. The upside would be no need for TPGs. :eek:

They'd find a way, and people would probably crash servers trying to pay them for the service.

(where's the bang-my-head-against-a-wall emoji?)

Now that would be a shame if they only issued cards in electronic form. Many times holding, touching, being able to feel things, and maybe being able to even smell them actually triggers a lot more memories and feelings than just viewing a digital image of something. How many times have you heard of a son who bought a particular card with his since departed father, and what holding and looking at that card now means to him. Doubt those same memories and feelings would always be there if we're talking about digital images instead. Would also do away with going to shows or shops. If you're just buying a digital image there's no need to ever go anywhere as long as you have a computer or cellphone with internet access. A huge part of the hobby is the hunt and interaction with others. Doing everything digitally would really appeal most to investing and flipping types, and take even more away from the hobby aspect. Hope that never happens.

Getting back to the Goldin "Vault", the main topic of this thread, I've always heard others mention how AHs very often had direct pipelines to TPGs in order to more quickly get items graded by the TPG and ready to be auctioned off. Also seems I remember some people would say that because of their volume and recurring use of these TPG grading services that they suspected some AHs would get not just preferential service and treatment from the TPG(s) they used, but maybe also more favorable grading of items they submitted. Not sure this would be the thinking currently due in large part to the pandemic and the impact its had on TPGs and grading in general, but if that thinking still exists, is one of the potential services Goldin's "Vault" could provide be to get raw cards that people have stored in the "vault" graded by a TPG for them? I do not know, but has anyone seen or heard if this may be offered as an added"vault" service by Goldin?

That would be a Great Benefit for those using the vault if it were possible.

But for me it is still not 100% clear how the rest of it works and if is really worth me doing.

Like others I like to have easier access to the Cards I enjoy to look at them and share the viewing with my friends and family

I'd be interested in this service just so I can use my George Costanza voice and say, 'IT'S IN THE VAULT BABY!!"

https://www.youtube.com/watch?v=_COs...hwartedeff0rts

What companies currently offer a vault? If the choice is between Goldin and Pwcc then I would use Goldin for sure.

One should ask Nat Turmer about the Lebron James card at the national.


Presented without comment

If no comment, how about some context?

Only conjecture and hearsay counselor

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PWCC says it received $100 million in vault submissions at the National. Business is good! According to my math and their report of 7800 items, that works out to a staggering 12K per item.

Do you believe what they say

I'd trim that number a hair

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With the insane direction this hobby is going, it wouldn't surprise me if it was pretty accurate.

Not our hobby any more. It's vaults and flippers and crypto and gem rates and weird million dollar BKB cards and social media and influencers and whatever.

It maybe true or it just maybe that they are just trying to Enhance their image and the image of their services.
Leading people to believe it is being used by so many people and with so much higher end products to try getting other people business

That's INSANE!

LOL. You're much too young to understand the reference but you reminded me of the old Crazy Eddie commercials: our prices are INSANE.

https://www.washingtonpost.com/news/...as-died-at-68/

i grew up watching those commercials and shopping there...the good ole days!!!

Eddie Antar was a serious fraudster, would have fit in well with the hobby.

Hmmm....at that value I would initially think that no sales tax would have had a lot to do with those vault submissions. But if these were submissions they received at the National, the owners would have already paid any sales tax due, so that can't be it. Would guess these submissions are mostly by flippers or others looking/expecting to sell in the near future, and not by more traditional collectors then who would more likely want actual/closer possesion of their valuable cards. Assuming they plan to use PWCC then for eventual sale, and likely made the submissions at the National for ease and convenience since they were going to be there, and then not also incur the cost/risk of having to mail their items to PWCC in Oregon. And some submissions could have been from acquisitions made at the National for real convenience.

Personally, unless I was using it to get around sales taxes, or planning all along to consign items to PWCC for sale at some point, I just don't see the attraction or advantage of using PWCC's "vault". Is there something I'm missing and not seeing/realizing that would be attracting such sizable submissions to PWCC at the National then if it was not simply for convenience or to save on sales taxes, especially in light of some of the questions and potential issues that have been discussed in this thread?

I think it's probably mostly "flippers." Someone on BO mentioned they will also loan money against your vault holdings, so maybe "investors" are looking to work that angle too and leverage more purchases, I don't know.

Aaaaahhh.....hadn't heard that one before. That sounds like a pawn shop operation then, which I believe are also subject to differing laws and regulations, depending on what state the pawn shop is operating from. I've heard of consignors sometimes getting advances on items they are putting up for sale with auction houses, but always thought that was only through actual, licensed auction houses for consigned goods. Thought outfits like PWCC and Probstein were different from fully licensed and state regulated AH's though, and therefore such advances would be considered more in line with pawn shop activities after all, especially if in PWCC's case the advances are being made on items kept in their "vault" that have NOT been formally consigned for actual sale by PWCC yet. I would think that distinction could make a difference. Have not seen or heard about what actual agreements or documents PWCC has people signing in regards to placing items in their "vault", what additional agreement or documents (if any) are also required to be signed to remove an item from their "vault" to then being formally consigned for sale, and whether or not the "vault" operation and PWCC's Ebay sales consignment operation are actual, separate legal entities, or all just one company. Would love to see blank/redacted copies of all these PWCC agreements and documents to get a better idea of exactly what they are doing.

Would also assume there could be a difference if these $100M of submissions were actually being made to just PWCC's "vault", or if they actually were tied to consignments for sale. An earlier poster questioned the veracity of the reported PWCC "vault" submissions at the National. Is it possible that figure could in reality be a combination of true "vault" submissions and sales consignments?

The whole third party holding idea leaves me cold.

https://photos.imageevent.com/exhibi...ize/img228.jpg

Gotta play with toys.

https://photos.imageevent.com/exhibi...ize/jerry1.jpg

+1

Definitely not for true collectors.

Talked to a guy at the national who has a BGS playoff contender Brady 10 at PWCC. He needed cash for a downpayment on a house and was able to get a $1mm loan on the card.

Interested to know what rate and terms?

Open an account and find out.

Ha, no thanks. I'm in the loan business so I enjoy running the numbers. I'll just keep building my collection "cash & carry" like the old days.

I wonder if there will be capital calls if the market for that card starts heading south.

Like I was saying earlier, would love to see some of the actual documents and paperwork they have these people signing. Also wondering if this isn't just an advance on a sale consignment of the card, as opposed to a true loan with PWCC holding the card as collateral. Regardless, this could possibly be a huge reason they got so much in alleged "vault" submissions during the National. The bulk of those $100M in submissions could have actually been consignments more so than just people putting cards in their "vault" to be held for some unknown period of time. Especially if those people doing the submitting were also looking to get advances/loans against their cards right away.

I understand PWCC does quite well, but if they are getting submissions and then giving out such advances/loans of the nature mentioned, I'd have to speculate they don't have that much cash just lying around to continue doing such advances/loans if they expect to continue this going forward. And if they do continue this, I would expect they would look to get financing to supply them with cash to cover such advances/loans. I don't see normal banks going to approve such financing (or being allowed to under current regulations) if the collateral is primarily sports cards, which would seem to leave it for private investment companies/investors to step in then.

OMG - If this is now going to be the case going forward, we are truly seeing the transformation of our hobby into an industry dealing in investment commodities. Instead of someone buying and selling cards to make money, this is where someone can make money off the capital loaned to others buying and selling their cards. So PWCC (and/or whomever is supplying them with cash) is possibly becoming the first J.G. Wentworth type of company to start taking advantage of people dealing in cards. Unbelievable if this turns out to be true.

And now would like to find out even more how these advances/loans are going to be paid for with charged interest, or some other type of payment/charge to cover the carrying costs of whomever is fronting the money. If there is an interest charge in their somewhere, that in and of itself could have different tax implications depending on whether or not the person paying the interest is a dealer, investor, or collector. And if not necessarily an interest charge per se, can whatever charges are being incurred then be applied towards the basis of cards eventually sold so the seller gets some tax break? This could get real interesting going forward?

I’ve been saying it since it started the vault is a brokerage/trading account for your slabs. I don’t want any part of it. I want the cards in my possession for the long term. It’s also a easy way for the AH to keep you as their customer, not venturing to other AH’s.

It’s also about leverage buying with cards as collateral etc. They attract customers/investors with tax shelter marketing well guess what it only saves you from sales tax, not profit on gain. Wait till you get that check your gonna have to claim it.

Very Well said and I am of the same basic mind set

LOL

Good one, but that is why I'm guessing such loans/advances are at least initially going to be more short term in nature, and are likely tied to sales consignments rather than "vault" submissions to be held for an indeterminate amount of time.

Great observation, though I initially assumed the main focus of the "vault" concept was precipitated by the sales tax loophole idea, and to then use that to channel and retain more business for the AH. Just look at the timing and creation of the concept relative to the S Dakota Vs. Wayfair case decision by the Supreme Court, and the fact that the original PWCC "vault" operation was specifically set up in one of the few states without a sales tax.

The idea of using it like a brokerage account is I think possibly more a function of the impact the pandemic has had on the hobby overall, and the unbelievable surge in prices that have occured as a result. That impact didn't start till around two years after the Supreme Court decision so, would assume it was less of a factor in creating the "vault" concept, at least initially. If nothing else, the pandemic impact has radically quickened the additional use of such an operation as a type of brokerage account, and possibly even supplanted the original main concept of using it as a sales tax loophole. How else do you explain the $100M in "vault" submissions PWCC allegedly got during the National? The sales tax savings only occurs if the items are purchased online and shipped directly to a location in a state with no sales tax, not hand delivered by the owner while in Chicago.

What will be extremely interesting is to see how this "vault" concept grows, and possibly morphs, in the future. The fact that Goldin took on the concept that PWCC originally started already tells you that others in the hobby have recognized this as a possible way to grow and make more money in the business. So does that mean other AHs may start getting into the "vault" business to compete and maintain their current clientele and standing, or that entirely separate companies that don't even sell or auction off cards could jump into the "vault" business and end up being like financial advisors, only dealing in cards? Who knows at this point where this could go. I would think a lot of this will be predicated on how the card market reacts and goes as we eventually get out of the major effects from the pandemic and back into more normal times, whatever the new normal ends up being post pandemic. If the card markets end up severely tanking post pandemic, and we see major price drops in the high end market across the board, I think that would negatively impact the use of "vaults" other than for those still looking to take advantage of the sales tax loophole. But bcause of all the the changes and infusion of new money and investors in the "hobby", I think there is already too much invested by those new people to just let things fail apart and bottom out. An adjustment to the market and correction of prices for a time, yes can see that, but would also suspect it to have greater impact on the modern card side of things. I would think the vintage market will continue to do well and maintain, if not actually seeing increases overral as collectors/investors may move from modern to vintage at some time. At least for the foreseeable future. Guess we'll have to wait and see.

+1

Spot On.

First thread about the vault I think.

https://www.net54baseball.com/showth...ighlight=vault

Nevermind, my bad. I thought you were referring to this current thread being the first about the "vault".

As I recall sales tax was certainly a big emphasis of his initial pitch.

Oh yes, I believe that was the entire pitch. Definitely done with the then recent Supreme Court case in mind. This new twist is definitely due to the effects of the pandemic. Got to give them credit, this could be huge for them being the first to do something like this. Let's see how quickly Goldin adopts this loan/advance idea. If PWCC really got $100M in submissions at the National, the rest of the industry is already buzzing.