Mastro consignors not paid yet?

[Leon]

Since I am in discussions and contemplation about the immediate future of the Legendary Banner ads, which at this time have been pulled, I need to hear from any board member that has not been paid from Mastro, asap. This is nothing formal at all but I want to see the extent of members not being paid and seeing if we/I can help. I know Gary N has gotten help so far. Doug has promised to help consignors still due money, but doesn't have all of the consignor information from Mastro. Depending on several factors we will make a decision to have their banner back in the rotation or not. I realize the sentiment about not wanting the banner there but it's mainly due to people still being owed money, from what I can tell...which I am in complete agreement with. Please send responses to leonl@flash.net.. Thanks much.....

[three25hits]

Its a shame you have to do this Leon, but I am sure that those who are owed money are thankful you're willing to help.

I hope your efforts are successful.

[barrysloate]

My two cents:

While I do not believe the principals at Legendary have made a conscious decision to not pay consignors, the way they have launched their new business is nothing short of stupefying. On the one hand they apparently had consignments left over from Mastro that they wanted to sell; on the other hand they were not in a financial position to properly conduct business. While I am certain bidders will still participate in their auctions if they see something they need, consignors will surely look elsewhere to place their material. I find this whole thing unfathomable.

[calvindog]

Originally Posted by barrysloate

My two cents:

While I do not believe the principals at Legendary have made a conscious decision to not pay consignors....

Really? Is there a scintilla of evidence (other than self-serving statements) that this is not the case? Who decided not to pay consignors?

[barrysloate]

I am speculating, and I have to assume they have some financial issues. Do you think their business model is to not pay consignors? If it is, that is plain psychotic.

[calvindog]

Barry, at that rate you'll never be a character witness for the Mastr--woops--Legendary guys when the time comes.

[Adam]

Originally Posted by barrysloate

While I am certain bidders will still participate in their auctions if they see something they need . . .

I love the use of the word "need."

[barrysloate]

Adam- you know that most collectors are junkies...the good kind, of course.

[benjulmag]

Before I give it, I want to make clear that in no way am I condoning shill bidding or any illicit activities.

Let's talk about prudent business models for ANY business. Businesses typically have lines of credit that they continually tap into. When those lines are withdrawn, ANY business can be without notice thrust into survival mode. I'm in the real estate business. The bulk of my tenants are retailers. With the current credit crunch, I can't overstate how many of them lost their lines of credit and are struggling to survive (and in the process either pulling out of deals or coming to me demanding rent concessions). So what does this have to do with Legendary Auctions? As someone mentioned some time ago in a previous thread, my strong suspicion is they lost their line of credit. Their ability then to borrow against it to pay consignors or cover shortfalls from nonpaying debtors went out the window. When this happened they were holding many consignments for their next auction. Yes, they could have returned the consignments and gone out of business. Or they could have tried to survive by keeping the consignments and continuing as a going entity (under the Legendary banner). They chose the latter and here we are. Almost certainly they have no line of credit. Too I believe what Jay said is correct -- they are owed substantial sums from people who based on reputation and past dealings they had every reason to expect would pay them in timely fashion (which had that happened all consignors would have been timely paid).

Yes, one can argue that a consignor's right to be paid on time should not be subject to the ability of an auction house to properly assess the credit risk of anyone they lend money too. Also one can argue that excessive reliance on a line of credit can be very risky and can cause survival issues if it is unexpectedly pulled. But the point is that many many businesses in all fields operate in similar fashion, and the cash flow problems Legendary is currently having are quite typical in today's unprecedented recessionary economy. I strongly suspect Doug Allen is well aware of the need to as quickly as possible pay his consignors, and that he understands the implications to his company's survival prospects by them remaining unpaid. While I hold no crystal ball as to what the future holds, I'd be surprised if they were not paid in the not-too-distant future.

[Knuckles]

I really appreciate what you're doing here as it has been just plain wrong to have not received payment yet. An e-mail has been sent to you Leon.

Thank you,

- Garret

[Exhibitman]

There is no real difference between Mastro and Legendary. Silk Road Equity owns them both and simply pulled off a paper shuffle and rebooted Mastro as Legendary. Lazy bastards even used the same promotional language. If you want to ask who is to blame, you need look no further than one rung up the Legendary/Mastro corporate ladder. Similarly, if the powers that be over there wanted to do the right thing for the consignors, they could. The fact that they haven't, that they were perfectly happy to consign their consignors to the "go pound sand" category until and unless someone bitched loud enough to force their hands, tells me that they are not to be trusted. They will never, ever get another consignment from me no matter how many times they relocate their offices and rename their business.

[daviddbreadman]

Barrysloate you are right on in your post #3 in this thread. Your words describe things exactly. It simply makes no sense. I just don't know what they were thinking. I agree that they are not purposely trying NOT to pay people but instead think that they are 1) too dumb to recognize its importance, 2) unable to pay at this time for cash flow reasons 3) too focused elsewhere.

Nevertheless its the worse business decision they could have made.

People will definitely buy from them, no matter what they say to the public. Lets face it if you want the card and its there you'll bid. But WHO will consign to them?

[autograf]

I think maybe they though the problems of Mastro were the problems of Mastro and they could avoid them in the new endeavor but the consignors of Mastro are/would be the consignors of Legendary and the bidders would be the same, so it's hard to divorce themselves of the issues from Mastro. With Silk Road Equity still involved, it gives us all reason to pause a little too. If it'd been the way it was with Mastro, then Doug, Ron & Brian 'bought the assets' and started Legendary with SRE completely out of the picture we could suppose that they were really looking to move forward away from the past though. It's just basically the same minus Bill Mastro at a different physical location with a different website. So....time will tell. I agree with Barry that it'll be tough to get quality consignments going forward. Without consignments, no bidders, no auction. Hopefully, they can right the ship from the Mastro debacle to get the consignors and bidders back on their side. At one point, we all know what Mastro was....we consigned, we bought, we paid, we got paid, we got the goods. It was a pretty well-oiled machine. I think Doug, Brian & Ron will get that back at some point. They just have to take care of the people like Gary but that clouds the issues of the transition a little though, doesn't it? If they are taking care of the obligations of the former entity, that ties them just a little bit more TO it. Don't know. Tough situation for everyone involved......hope it works out.

[oldjudge]

As I understand it there is more to this than has come out on the board so far. From what I have heard, the reason that Mastro Auctions has not yet paid all consignors is that they are owed significant amounts from certain well respected people in the hobby. When these funds come in the consignors can be paid. Without going into names, supposedly two people owed Mastro Auctions about $400,000 each. In at least one case I have heard the matter is being litigated.

We have long stated

Trust no one
Double check everyone


It is disappointing (and criminal) that consignors have not been paid
by certain auction houses.

Given the time, energy and money that long-time collectors have invested
in a hobby, when it is time to sell, it is imperative that said collectors
are treated with dignity and respect.

The Board should dedicate all its efforts to removing any auction houses and/or dealers who violate their legal and moral obligation to the collecting community.

The Board should publish a list of auction houses that do not pay on terms and distribute at the National. And their practices should be reported to the Post Office, FBI and local law enforcement.

Perhaps there is a few extra rooms in Mr. Madoff's prison to house hobby thieves. Just think by the time they get out their 2009 Topps cards will be more than 100 years old. Perhaps, then they can pay their debts.
In the interim, it is time to severely punish the hobby thieves.

[calvindog]

Bruce lives!

[barrysloate]

Bruce's post does not include the universally recognized "America's Toughest Want List" byline...has it been retired?

Thanks Rich...just a typo

[Rich Klein]

Has it be retired?

I guess grammar is taking off for the three-day weekend as well

Barry -- I know buddy -- was just giving you a hard time; after all; due to my and my wife's surgeries this week -- we've had the M-I-L over as a guest and you can imagine how that goes on a full time basis

Rich

[Rob D.]

Great to see Bruce back posting again. Lots of really insightful points in his latest effort — and none of the self-congratulatory stuff we used to read.

[Leon]

Originally Posted by barrysloate

Bruce's post does not include the universally recognized "America's Toughest Want List" byline...has it be retired?

calling the grammar police....clean up on aisle 1.....