Plus, even if no lot was shipped before payment was received, this problem may not have been eliminated. Remember, major auction houses pay cash advances for new consignments (and pay salaries, returns to equity holders, rent, etc). The auction business is a dynamic process. Before, after and during auctions money is going out for these advances so that material comes available for the upcoming auctions. Once the credit lines dried up, even if every lot auctioned off up to that point was paid for, there may have not been sufficient funds to pay consignors. The credit lines were the safety net to overcome cash flow timing issues. Poor credit decisions only exacerbated the problem.
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