Beware of Beckett!

[BobC]

Originally Posted by Exhibitman

One problem: the cards may not be PSA's to return. Technically, the assets of the debtor, even if they are held for others, become part of the BK estate, unless the bailor filed a UCC-1 with the State of CA establishing that the items are theirs. PSA may hear from the BK Trustee demanding that it turn over all of the cards. They would then be sold and the proceeds used to pay creditors in order, with the bailors treated as unsecured (last in line) unless the UCC-1 was filed.

And Adam, this is exactly one of the reasons ordinary people often come to the point of despising and hating courts and attorneys. It is very clear to pretty much everyone with half a brain and any common sense that these cards are NOT PSA or Marx's property, yet the bankruptcy laws in seeking to protect and look out for the interests of creditors in such bankruptcy proceedings are basically stealing the cards from totally innocent submitters. I am aware of the UCC filings that may be required to show ownership of the cards, but most of these submitters have no clue as to what that means and why they may need to do such a filing in a timely manner. It is often too late for a submitter to do something before finding out their cards are taken. Instead of the courts working to protect the interests of ALL innocent parties in such cases. Instead, they can end up creating even more victims by legally stealing property that belongs to innocent card submitters.

What is ludicrous is that these submitters have to be proactive and go through the time and expense to file claims just to prove their property is actually theirs. Whatever happened to due process and the rights of the actual card owners? And the courts and attorneys involved usually know damn well who those cards really belong to, but don't give a $hit about those innocent people's property. If anything, it should be the bankruptcy court's burden to prove those cards do not belong to the submitters and true owners, and not the other way around. But that would make too much common sense, wouldn't it? And if any of you wonder why anyone would possibly have a reason to treat the innocent card submitter's property this way and just take it, that is simple, guess how the appointed bankruptcy/case trustee gets paid for overseeing what I assume in this Marx case is a Chapter 7 bankruptcy filing? Aside from a flat fee they get from the extremely nominal (probably less than $100) bankruptcy filing fee, they get paid on commission a percentage of the proceeds of funds or proceeds from asset sales they collect to pay off the creditor's debts. So, by keeping or grabbing an innocent submitter's cards in this particular Marx case, and selling them off to raise funds to pay off Marx creditors, the appointed Trustee is also putting more money into their own pocket. Now there's a big incentive for them to do the right thing by innocent card submitters, huh?

And it can even get worse than that in creating more innocent victims in a bankruptcy case. Most ordinary people don't know this, but there is actually a sort of look-back rule in place in regards to a bankruptcy. If a business files for bankruptcy, the case Trustee can actually go back to anyone they paid more than $600 to for up to 90 days before the bankruptcy filing, and declare that was a preferential payment and legally force the person/business to return the full amount they were paid (wages, tax payments and such are generally exempt). The only other requirement is that the now bankrupt company was insolvent (debts greater than assets) at the time the payment was made, which they probably were, or why else would they be filing bankruptcy? This is in place to stop the bankrupt company from being able to get funds out to parties that may be friendly, related, or even helping the bankrupt company owner(s) remove or hide assets from the bankruptcy trustee. But the 90-day cutoff is a completely arbitrary rule that allows the Trustee to take money back from totally innocent people and businesses that were honestly paid in the normal course of business, and who likely needed and used those monies to pay their own bills and employee wages, and probably weren't even aware of the pending bankruptcy filing in many cases. But now they have to find the money to pay back to the Trustee, and then they get added into the rest of the unsecured creditor pool to see if they ever get any of their money back from the court. No telling when, or even if, they'll ever get anything back. And to top it off, the Trustee likely gets a percentage of what they had to pay back, so they had the added privilege of being forced to literally pay for getting screwed, and most definitely not in a "happy ending" way.

Oh, and I'll give you three guesses as to what profession these Trustees usually belong to, and you probably don't need the first two! (And this is not to personally disparage our own resident legal minds as there are a vast majority of truly great attorneys out there, but as with most all professions, there will always be a fair share of dirtballs and scumbags mixed in as well.)

And worst of all, in many cases more often than not, the party(ies) truly responsible for the whole situation to begin with, which in this particular case is most likely the owner(s) of Marx, will end up walking away with no personal liability or any other serious consequences from the bankruptcy proceeding. As long as they were smart and incorporated the business filing for bankruptcy, or filed to set it up as an LLC type of entity, the owner(s) of a bankrupt business are generally pretty much absolved of any personal liability and walk away clean. In such cases, the only thing they stand to lose is what they invested/put into the business and hadn't taken/gotten back out by the time of the bankruptcy filing.

Can be a truly fair and just world we live in, huh? Just wait till one of you is driving to a show with a lot of your cards and such in the back, and you get pulled over by a criminal wearing a badge who claims and takes your entire collection/inventory (or your cash you were bringing to buy cards with) as an asset forfeiture! Good luck to you should that ever happen.