Shanus v. R.L. Americana, Lifson, Robert Edwards Auctions, et al.

[brianp-beme]

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Brian


For example, REA wishes to seal sections of the April 30th and May 1st transcripts that describe Mr. Lifson's relationship with Mr. Nash and outline their scheme. The disputed transcripts explain how Mr. Nash consigned items that he owned for sale in REA auctions. After placing his items in the auctions, Mr. Nash bid on some of those very same items as Cooperstown, an entity that he completely controlled.

Mr. Nash then extended credit to Cooperstown for the cost of the successful bids, therefore preventing any money from actually changing hands between Mr. Nash and Cooperstown. Essentially, Mr. Nash would loan Cooperstown, an entity under his control, money to pay himself for Cooperstown's purchases of his own memorabilia.

Mr. Lifson, as the auction representative, would normally receive a buyer's commission and fees from items sold in REA auctions. However, Mr. Nash would not pay the full fees, accruing debt with REA. Instead, Mr. Lifson had an agreement with Mr. Nash that the items Cooperstown purchased would be held as collateral for Mr. Nash's debt, but it is unclear whether Mr. Lifson ever intended on collecting this debt.

Mr. Lifson would then report these sales on his website, but REA never actually removed these items from their inventory, until offering them for sale at some point in the future. Because successful sales potentially increase the value of items, Mr. Lifson and Mr. Nash's scheme would artificially inflate the prices of items that they intended to sell in future auctions.

For the above reasons, the materials that REA seeks to seal are directly relevant to the heart of this case, meaning that the basis for the judgment rests upon the disputed transcripts and exhibits. If the Court sealed the disputed materials, it would essentially conceal the very mechanism that REA used to perpetuate the scheme, leaving the public with little more than the judgment itself to establish the existence of the scheme. Consequently, the Court finds that the public interest in disclosure outweighs any private interest to seal….