Goldin Vault

[Exhibitman]

Originally Posted by Peter_Spaeth

Why is simply shipping your cards to the vault a consignment that implicates UCC filing requirements? At least if you haven't instructed Goldin to sell them? And even if Goldin was so instructed, the UCC says it still isn't a consignment because Goldin is an auctioneer and is known to be selling the goods of others.

"UCC Section 9-
102(a)(20) defines a consignment as a
transaction in which a person delivers
goods to a merchant for purposes of sale,
and (a) the merchant deals in goods of that
kind under a name other than the name of
the person making delivery, is not an auctioneer
and is not generally known by its
creditors to be substantially engaged in
selling the goods of others"

In any case, while it is not my area, it seems to me at least some transactions in which the cards are shipped to Goldin would be more like a bailment in which there is no need to file a UCC-1.

"A bailment is a delivery of goods by the
owner, the bailor, to another party, the
bailee, for some express purpose. After fulfilling
this purpose, the bailee is obligated
to return the goods to the bailor or dispose
of the goods according to the bailor’s
instructions. As such, a bailment is an
entrustment under UCC Article 2-403(3).
The bailor has a right to the goods with
priority over the bailee in possession of the
goods and creditors of the bailee with a
security interest or lien in such goods. A
bailment is not a sale or consignment, and
is therefore not subject to the Article 9
UCC filling requirements and other rules."

I could be completely wrong but I'm not seeing the need to file a UCC-1 to keep those cards from Goldin's creditors?

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

[Peter_Spaeth]

Originally Posted by Exhibitman

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

Was Mastro different because the items on the premises truly were consigned to him irrevocably for purposes of sale, whereas that might not be true of the Goldin vault?

[BobC]

Originally Posted by Exhibitman

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

Adam,

So does that mean that if a bank files for bankruptcy that everything in the safe deposit boxes they rent out to customers can just be taken by the court/creditors unless everyone has filed a UCC statement? That does not seem possible. But if it is, the same would be true for a storage locker rental place, and everything people stored there could be taken as well? So now I have to ask, what about an apartment building or even just a double, the property owner goes bankrupt and all the renter's personal property, belongings, and assets they have in their apartments can be taken by the courts/creditors??? If that is actually true, that is pure insanity!

[Peter_Spaeth]

Subject again to the caveat that this is not my area, the safe deposit box and storage locker seem like bailments where one tenders possession of goods to someone else for a specific purpose, and need not file a UCC to protect oneself against the bailee's creditors.

[Peter_Spaeth]

To take it further, unless the contract says it's a consignment, if I ship my cards to Goldin to store for me subject to my later decision what to do with them (including send them on to me), that feels like a bailment not a consignment.

[BobC]

Originally Posted by Peter_Spaeth

Subject again to the caveat that this is not my area, the safe deposit box and storage locker seem like bailments where one tenders possession of goods to someone else for a specific purpose, and need not file a UCC to protect oneself against the bailee's creditors.

That was what I always thought and seemed to remember. Was CFO/Controller of a commercial real estate development company for about 15-16 years, and read and saw more leases and talked with more attorneys than you can imagine. Never heard of anything like this possibility in regards to leases and rental rights and so on.

To assure the correct treatment and classification as bailments, I think you would definitely want to at a minimum have a properly signed and current lease/rental agreement, and to make sure to keep up on the payments and not ever let it get in arrears.

[BobC]

Peter and Adam,

A thought just occured to me, and I should have mentioned this before. Wasn't thinking, duh! If due to a bankruptcy there could be a potential seizure of consigned/stored assets at PWCC or Goldin because of them being a consignment seller/auction house, wouldn't the simple fix be to set up their "vaults" as separate legal entities then? Makes perfect sense to keep the cards and items they store separate from what they are selling/auctioning off, and also makes perfect sense for liability protection purposes. Should also help to remove any gray area on whether a card/item is being stored subject to a rental agreement or has been consigned for sale.

Now the question is, did PWCC and Goldin set up these "vault" operations as separate, legal entities from their consignment/auction businesses? I would guess yes on both counts as despite what others may say and think of them, they are both run by savvy and smart business people. I know if either one had been my client, I would have insisted they set up these "vault" operations as separate businesses.

So, does anyone know if PWCC and Goldin set their "vault" operations up as separate business entities?

[Fred]

If I understand this correctly the purchaser of a card is supposed to pay for the card and then let it sit in a vault instead of taking possession of it? Crap, I guess I'm doing this wrong because for some reason or other I want the pretty piece of card board in my hand after I purchase it.

This almost sounds like you purchase a card, allow the auction company to hold on to it until you feel the time is right to allow the AH to put it up for auction again.

It doesn't matter if the card sells for more or less than the previous auction because the AH collects the 20% buyers premium, again, without any risk of losing $$ on the material that is being auctioned because they don't own it.

This sounds more like a new hobby where you ride the ride and hope you're not left holding the bag at the end of the bubble.

[Mark17]

Originally Posted by Fred

This almost sounds like you purchase a card, allow the auction company to hold on to it until you feel the time is right to allow the AH to put it up for auction again.

Yes, for people who treat their cards as assets, and think of their transactions as stock trading, that's exactly what it is. You buy a stock (or card,) hold it for some time, and eventually sell it when you think the market is favorable, or when you need the cash.

The vault makes it easy to buy and sell, and saves you shipping costs both ways, not to mention insurance if your stuff is very valuable.

Since I'm a traditional collector the vault isn't for me, but I can see how it might not be a bad concept for some.

[mrreality68]

Originally Posted by Mark17

Yes, for people who treat their cards as assets, and think of their transactions as stock trading, that's exactly what it is. You buy a stock (or card,) hold it for some time, and eventually sell it when you think the market is favorable, or when you need the cash.

The vault makes it easy to buy and sell, and saves you shipping costs both ways, not to mention insurance if your stuff is very valuable.

Since I'm a traditional collector the vault isn't for me, but I can see how it might not be a bad concept for some.

+1 agree

That is why it is important for each person to understand both how the vault works and what are the pro’s and con’s for each individual.

For me as a collector It is not right for me.