Definitely a great point...not only did this hurt the winning bidders of the missing cards, some of whom perhaps would have shifted their bidding money to other non-stolen lots, but the consigners of some non-stolen cards in the auction perhaps could have had the action on their lots potentially minimized because of the decision to keep the stolen auction lots open.

Condolences to all involved, and just a sucky situation all around that, with some common sense precautions, probably could have been avoided in the first place.


brianp(arker)-beme

I didn't see this yesterday, but this is one heck up of a wake up this morning.

99.9% sure this isn't related, but given the name of the town in the title:

https://www.news5cleveland.com/news/...-district-says

I received a call after Sunday night (a day after auction ended) telling me that a box of cards had been stolen. First, I was assured that I will be paid out 100%, on the final value of the auction, which I have no doubt will happen, whether insurance covers it or not (and I am sure they will). Second, I was told the auction had to continue in order to establish the fair market value of the cards, otherwise, how does anyone establish the value/hammer price. Third, I was told anyone who won a stolen card will be given the option, but not obligation, to buy the card at the hammer price + BP if they are found. Plus, they are optimistic the cards will be found.

A few other things:

1. The cards were stolen, not lost or misplaced. The cards got to their intended destination, were signed for and stored, and then taken. As far as I can tell, ML has done nothing wrong or irresponsible.

2. It sucks for the buyers, but they are out no money, only expectations. They may have missed out on another card, but they are in no worse position than before the auction started. The bigger issue would have been how much do you pay the consignors? Do you guess, do you just settle, do you litigate? Running the auction, which I am sure was done at the advice of both counsel and insurance, to establish value is certainly the best path with the least damage given the crappy situation that’s nobody’s fault. There is no winning answer under these circumstances. It sucks, millions $$ of cards got stolen and ML is on the hook. No bueno all around

3. ML owes me a lot of money. I have complete confidence I will get every dime (and have proactively been assured numerous times of that and I will get paid before insurance ever kicks in). I do not blame ML for this and I think they are doing all the right things under real crappy circumstances. I think it sucks balls for the collecting community bc the cards may be gone from the hobby forever. Hopefully the turn up.

From the way they shipped such expensive cards to running a phantom auction on items that were stolen seems pretty crazy. If I were an insurance company I’m not sure I’d take the results of a dummy auction as setting a value. Seems too easy to manipulate.

This is devastating, but only a matter of time until investigators work their way to the culprit and the cards are recovered.

I wonder if parties involved are thinking….

The Con goes on and on…..

I’m sorry for Ryan and for the collectors who thought they won these cards, but I am flabbergasted that ML decided to still run the auction with these cards in it. It’s not a good look for the hobby at all. I expect to see changes in the future.

Bad karma from the Goudey Gehrig situation?

Truly sad this happened. The moment it was known the cards were stolen, the auctions should have ended, so bidders could have focused their money on other cards they may have been interested in. If and when the cards were recovered, the cards could have been listed in a future auction.

And the end of the day, this sucks for everyone involved.

stolen
 

Best Western, they are OK,.. breakfast included, free Wi FI,

Probably should eat that buyers premium.

Perhaps Scott Russell of The Collector Connection can post about the legalities of an auction house selling items it knows it doesn't have in its possession. Scott has said he graduated from auction school, and I bet that topic was covered.

What does that mean? There is no con. ML had to do what they had to do and no doubt they took advice from counsel as well as others. There is a possiblity of the cards being recovered. It sucks for everyone involved. Hopefully, the cards will eventually be returned. Most of our pre war cards are like fingerprints, so there is a possibilty......
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+1

As a consignor, are you given the option of having your card(s) not included in a card show display case? Wonder where this is in the fine print of the consignor agreement. I would expect my consignment to be in a vault.

+2 (coming from the consignor with the most to lose and a bidder who won a very rare and expensive card that will almost certainly not come up again for sale for many years).

The people most impacted understand and are satisfied with how ML is handing it. The situation sucks and is unfortunate, but there is no perfect answer. That said, I am sure that ML proceeded on the advice of counsel, the insurance company, the cops, etc.

Hypothetical: A collector's prize card is a rare Old Judge, of a player who was his great-grandfather, that's almost never seen. An upcoming auction has an example of the same card, but in much better condition. The collector, to raise needed funds, sells his example, figuring that'll cover part of his anticipated upgrade.

The auction ends, the collector is thrilled because he's won and upgraded his prized card, but then the AH sends him and email, and SURPRISE!

"We didn't actually have the card we just auctioned and pretended to sell to you. We did it because we, for our own purposes, just wanted to see how high you would bid..."

But, hey, the collector is no worse off than before the auction, right? Except he no longer has his best, prized card.

When a catastrophe happens there are unintended victims. As a business, or a person with a conscience, you do the best thing at the time. The auction was handled correctly given all of the circumstances.

Completely SOL. I'm sure any of the good counselors could beg the question...."what are your damages"

This is horrible to hear. When I went through the same thing years ago, the defense switched from "where is your reciept for buying them" to a cock and bull story how I sold them cheaply, to 2 6'4" 250lb gentlemen, who knew nothing about cards, and subsequently wanted more money. FwIW they supposedly lost the entire sum on the Tyson/douglas fight that weekend.

I think it’s more than fair to question whether sending the package the way they did and continuing an auction of items they no longer had without saying a word are the best things.

Or just pick them up from the Fedex location near the airport on your way to the BW?

Not understanding the logic to send this shipment to the BW opposed to picking up at the Fedex location. At least if someone at Fedex pilfers the cards, the collectibles insurance would cover.

But this is not what happened. Also, there is a real expectation that the cards will be found and they will have the cards. Finally, regarding your hypo, what if the guy sold the card in anticipation of winning the other but was outbid and did not win it. Nobody made the guy sell his existing card BEFORE he wins the other card. That's on him.

I fully agree with Leon: "there are unintended victims. As a business, or a person with a conscious, you do the best thing at the time. The auction was handled correctly given all of the circumstances."

The situation blows. Plain and simple. There are no winners. You do the best you can under the circumstances, and, as any smart business would do, you follow the advice of counsel, the insurance company, and the police investing the case, all of whom (from what I have been told) said to run the auction.

Its a good question as to why the cards were not held at Fedex, but instead delivered to the hotel. My gut is that its because valuable cards have been sent to their end destinations a zillion times without incident, so there was no reason (until now), to change the practice. I bet going forward, AHs will send cards (if at all) to be held by FedEx/UPS for employee pickup. But there is no reason to change the way something has always been done until a reason presents to change.

I can't see how auctioning off cards you don't have can be either legal or ethical.

I would love for ML to comment on this, especially the last sentence. Maybe a statement will be forthcoming.

From the SCD article, ML is not the only one to do something like this:

"If it’s impractical to drive to a remote location for a show or other event, dealers often ship items ahead of time, tracking shipments and making arrangements to take delivery. One former auction house owner told us Monday that while the process can be nerve wracking, problems are rare."

Also, I would think that ML would have insurance to cover themselves for this type of occurrence. I doubt they would risk sending several million dollars worth of cards in a way that wasn't covered.

I agree with you Ryan. I won the Bat Off Cobb PSA 7.5. I don’t blame Memory Lane. I blame the thieves. Memory Lane is reputable and will do the right thing.

I am about as certain as I can be that ML would've consulted with counsel before making the decision they did. I don't remember ever discussing auctioning of things that have been stolen prior to completion of the auction. It's a pretty unique scenario.

A related concept that is covered and is legal is that there are a surprising number of auction companies (not necessarily sports) that auction items they don't have possession of. Whether they're allowing a consignor hold the item until they approve of the sale and in some cases even allowing them to ship it on to the final destination on behalf of the auction company. We are advised against the practice in school for a number of pretty obvious reasons. I've had consignors try and make these arrangements with me, we turn down the consignments. Amazingly though, it is not actually illegal (really isn't that in essence what an ebay auction is?)

I think it is admirable that a consignor, Ryan, is handling spokesperson duties here for Memory Lane. It has been established that Joe T. Is the best catalog writer in the business. Maybe he or another ML representative could come on the board and make a post or two to clarify the situation about what exactly happened and what expectations are moving forward.

This was my second thought after realizing that running the auction in silence was the best move to establish value for items that perhaps have aged comps or none at all.

It certainly seems like there has to already exist bonded receipt/delivery companies in all 50 states for high value shipments, collectables, art, etc. Just shipping to a contractor in Ohio and giving them a short drive vs. direct delivering 2 million in items to a business front that has likely 70% of in-house employees on minimum wage or close to it seems dangerously risky.

If this is not the case, I may have just come up with a business idea.

Tough call, you also want the auction to be promoting your items right?

Is it legal to list things on ebay one doesn't have? I'm sure it's against their rules.

I'm going to a flea market this weekend and I'm "optimistic" I'll soon have a green Cobb available. Can I list it on ebay now?

I don't think they should make comments while an investigation is going on, but that is up to them.. Isn't that law 101? Or is that common sense 101?
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Cards
 

There is probably a good reason they have handled it this way. Guessing:

1) They know the party that took them is and have sufficient confidence they will get them back.

2) If some have been sold, they didn't want the auction down for the investigation while they try and retrieve.

3) Short of the thief freaking out and throwing them in the trash (which is highly unlikely); the cards are probably under someone's bed until they figure out what the heck they got themself into.

We're all extremely hopeful they will be found and you'd think that's going to happen.

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Additionally.....
 

It sounds like ML has communicated clearly and directly with all affected parties - which IS business critical. At this point they don't owe anyone else any explanations. I suspect as this unfolds more details will be made available to interested but unaffected (directly) parties.

For ML, Ryan and all other affected consignors and winning bidders, I am very sorry to hear about this and hope the thief is caught and cards recovered.

To all those who are offering could have, should have and would have scenarios I remind you that hindsight is 20/20 and "easy" to see looking back. As previously mentioned it sounds like this was standard business practice with little or no historical problem(s) and was covered by insurance. I suspect that practice will be scrutinized and possibly modified moving forward.

While I understand the question of running the auction with the knowledge that the cards weren't available, I also understand that it really was the best way to establish current fair market value for insurance purposes.

I have and know of others that in the past had issue with Fedex stealing cards and hope they are being investigated here as well. I think their $1,000 cap on "collectible" claims (it's in the fine print) leaves them ripe for incidents like this.

Counter point if it was to establish value: They allowed their customers to waste their time bidding on a make believe auction to maximize their own insurance recovery.

If the choice was to follow what your insurance company told you to do or else they wouldn’t cover a penny of the loss, or do it your own way, not have the auction, and lose $2 million, what would you do?

Oh, sure. Questioning things is fine and needed. On the other hand, jumping to conclusions and spouting uninformed opinions without knowing the facts, as some on here like to do, is annoying.

Sent from my SM-S906U using Tapatalk

Oh, sure. Questioning things is fine and needed. On the other hand, jumping to conclusions and spouting uninformed opinions without knowing the facts, as some on here like to do, is annoying.

Sent from my SM-S906U using Tapatalk

The Con is the continued theft that has recently occurred on-site at these major card shows. At every major show, you hear from dealers being theft victims of multiple expensive cards/many graded. The people doing this are not heroin junkies….they seem to know what they're doing…does not appear to be rank amateurs with little to no knowledge of the value and workings of this industry.

Understood but is that the way it had to go down? We have many lawyers on this board, can we get an opinion? And no comments from ML doesn’t help this issue.

Did the insurance company tell them that? If not, the argument about running them in the auction to establish value is bogus. Thousands of insurance claims are made every day, and fair market value is determined by appraisers and/or recent, comparable sales.

You don't have a collector who suffers flood damage to his collection say, "Gosh, my high-end cards are ruined. I'd better find an AH that will run phantom auction listings for me so I can determine what they were worth... "

As soon as I find a lawyer to offer his opinion I’ll let you know.

Not so simple...
 

1) If the cards are not recovered, yes, it will turn out to have been a waste of bidders time and emotional energy - incredibly frustrating. Though, if the cards are recovered, it will be very clear who gets what and for how much.

2) I think it is quite an exaggeration to call the auction "make believe". The auction was real. The cards are real. It is not a simple situation with no easy answers.

3) "To maximize their own insurance recovery" - this is really the most perplexing part of your comment - First and foremost - the insurance company needs substantiation of current market value for a claim. The Ty Cobb shown in this thread and presumably some of the other cards involved have very few and/or current sales - running the auction was really the best way to assess current fair market value - as an example the aforementioned Cobb sold for about $7K less than the last time it sold 3 years ago, indicating a lower current fmv than the last sale and reducing the amount that might otherwise have been claimed - in fact, lowering the insurance recovery. Up or down - the auction best reflects current fmv. While ML may get to keep whatever % they were entitled to on the sales, the lion's share of the proceeds I presume will be used to compensate consignors.

Well there you have it
 

:)

I learn a lot from card land. Now I can add that auctioning off items you don't have and cannot deliver on to my list of things that are actually okay!


I would think it is basic common sense that mailing $2M of fairly small and easily stolen product to a hotel to then hold for you is a bad idea. I would think it is common sense that then selling items you do not have and cannot deliver on is pretty sleazy at best.


If I went on the BST and auctioned a nice card, waited for it to end, and then said "Hey, this card was actually stolen from me before this and I said nothing. Thanks for the bids, I just wanted to price it for insurance" would this board say I handled the situation in the best possibly way? Hell no, I would get roasted for days at best :rolleyes:

Only if you're an auction house and it's for insurance purposes. If you're not insured, it's probably still frowned upon.

Too good to take a backpack on a plane.

While definitely risky, shipping via FedEx or some similar shipper while having your own insurance in case of problems is presumably the cheapest way to do it and has likely been done that way for a long time (as indicated in the SCD article). Most companies these days will usually try to do things as cheaply as possible until there's a problem. Then they will reassess if it's worth spending more to do it differently.