Do you utilize a vault service for your cards?

[raulus]

Originally Posted by BobC

Last paragraph, post #20. Had been discussed before in other thread(s) how if the vault company has a problem (bankruptcy, etc.) that your cards may not be automatically returned to you. Making a UCC filing with the applicable Secretary of State's office listing all your cards held in a vault would be how to protect your property being held for you by someone else. The filing documents your ownership of the listed property. You'd need to update and keep making new UCC filings as you made changes to what was being held in a vault for you, so it isn't necessarily just a one-time filing to protect your assets being held in a vault.

How bulletproof is a UCC filing in this situation?

And how much time/energy/work would it take to enforce your rights?

[Peter_Spaeth]

Originally Posted by raulus

How bulletproof is a UCC filing in this situation?

And how much time/energy/work would it take to enforce your rights?

IMO a UCC filing is not necessary as a technical matter for reasons previously discussed at length, but it sure as hell cannot hurt, is inexpensive, and would make things cleaner should there be a problem. But to me that someone even needs to contemplate filing a UCC is a red flag that this is not a great idea.

[BobC]

Originally Posted by Peter_Spaeth

IMO a UCC filing is not necessary as a technical matter for reasons previously discussed at length, but it sure as hell cannot hurt, is inexpensive, and would make things cleaner should there be a problem. But to me that someone even needs to contemplate filing a UCC is a red flag that this is not a great idea.

Adam (exhibitman) seemed pretty convinced it was the smart thing to do, if I remember correctly, for anyone going to use one of these vaults. I agree with you, technically you don't/shouldn't need to do such a filing, but if something did end up happening with a vault owner/operator, I can see and understand how such a filing could help you in getting your cards/items back as quickly as possible, and with the least amount of potential hassle.

[Peter_Spaeth]

Originally Posted by BobC

Adam (exhibitman) seemed pretty convinced it was the smart thing to do, if I remember correctly, for anyone going to use one of these vaults. I agree with you, technically you don't/shouldn't need to do such a filing, but if something did end up happening with a vault owner/operator, I can see and understand how such a filing could help you in getting your cards/items back as quickly as possible, and with the least amount of potential hassle.

Yes i agree it's a smart thing to do, it makes documenting your ownership much easier for little time and money spent. What I don't know off the top of my head is how specific the filing needs to be, in other words, if your stored inventory changes constantly do you need to keep refiling/amending. I suspect the identification of what's yours needs to be precise but again I don't know that for sure.

[BobC]

Originally Posted by Peter_Spaeth

Yes i agree it's a smart thing to do, it makes documenting your ownership much easier for little time and money spent. What I don't know off the top of my head is how specific the filing needs to be, in other words, if your stored inventory changes constantly do you need to keep refiling/amending. I suspect the identification of what's yours needs to be precise but again I don't know that for sure.

I'd posed that exact question to Adam, and he agreed you would want to try and keep the filings up to date with your actual inventory of items on file with the Secretary of State's office being as accurate as possible. As I mentioned to him though, I doubt if many people would ever spend the time, effort, and money, to continually keep doing this, let alone making the initial UCC filing to begin with. But if you have enough value in cards/items sitting in a vault somewhere, better safe than sorry, right?

[Peter_Spaeth]

Originally Posted by BobC

I'd posed that exact question to Adam, and he agreed you would want to try and keep the filings up to date with your actual inventory of items on file with the Secretary of State's office being as accurate as possible. As I mentioned to him though, I doubt if many people would ever spend the time, effort, and money, to continually keep doing this, let alone making the initial UCC filing to begin with. But if you have enough value in cards/items sitting in a vault somewhere, better safe than sorry, right?

Yes.

[Snowman]

I occasionally send cards to a PWCC vault if I'm looking to upgrade them in my collection. That way, as soon as I find a replacement for them, I can just send the current copy to auction right away and put those funds toward the upgraded copy. But that's pretty much the only thing I use the vault for. I prefer being able to actually look at and enjoy my collection.

[BobC]

Originally Posted by Peter_Spaeth

IMO a UCC filing is not necessary as a technical matter for reasons previously discussed at length, but it sure as hell cannot hurt, is inexpensive, and would make things cleaner should there be a problem. But to me that someone even needs to contemplate filing a UCC is a red flag that this is not a great idea.

Forgive me for not noting/bringing this up before, but isn't the idea and protection from such a UCC-1 filing then also technically applicable in the case of cards sent to a TPG for grading as well?

Obviously, this was much more pertinent during the recent height of the pandemic when cards were known to be in the possession of TPGs for in excess of a year in many cases. And even with the vastly reduced turnaround times TPGs have gotten back to today, there still exists the ever so faint risk one of them could suddenly go bankrupt (or maybe get raided and shut down by the FBI) and thus put one's recent submission at risk of not being promptly or properly returned. Any red flags for you there as well then?

[BobC]

Originally Posted by raulus

How bulletproof is a UCC filing in this situation?

And how much time/energy/work would it take to enforce your rights?

Adam (exhibitman) pointed this out in an earlier thread. He's the attorney, I'm just repeating it since he hasn't weighed in on this thread yet. I'll defer to him or other attorneys as to the effectiveness of filing, but he seemed pretty confident in it as an effective way to more fully protect your cards/items being held in a vault. He mentioned being able to easily download the UCC form(s) online, and that the filing fee(s) are negligible (believe he mentioned something like $5). Of course, you have to file with the Secretary of State's office for the state where the vault is actually located. So, there could be some differences in the filings or costs, depending on which state(s) you would end up filing in. And I guess the time/effort would also be dependent on how many different items you have to list, and how often you add or remove things from your vault so you end up having to revise and update your UCC filing. Again, I'll defer to the attorneys for better details.

[Peter_Spaeth]

Originally Posted by BobC

Adam (exhibitman) pointed this out in an earlier thread. He's the attorney, I'm just repeating it since he hasn't weighed in on this thread yet. I'll defer to him or other attorneys as to the effectiveness of filing, but he seemed pretty confident in it as an effective way to more fully protect your cards/items being held in a vault. He mentioned being able to easily download the UCC form(s) online, and that the filing fee(s) are negligible (believe he mentioned something like $5). Of course, you have to file with the Secretary of State's office for the state where the vault is actually located. So, there could be some differences in the filings or costs, depending on which state(s) you would end up filing in. And I guess the time/effort would also be dependent on how many different items you have to list, and how often you add or remove things from your vault so you end up having to revise and update your UCC filing. Again, I'll defer to the attorneys for better details.

I don't see any risk other than there can always be wrong decisions and there can always be a hassle when one is dealing with bankruptcy courts. If the law is applied correctly, your stored cards should not become assets of the debtor's estate subject to creditor claims, even without a UCC-1.

[BobC]

Originally Posted by Peter_Spaeth

I don't see any risk other than there can always be wrong decisions and there can always be a hassle when one is dealing with bankruptcy courts. If the law is applied correctly, your stored cards should not become assets of the debtor's estate subject to creditor claims, even without a UCC-1.

And exactly why I said I agree with you. But in the case of say a bankruptcy, there can end up being some confusion as to what items really belong to whom, and no telling how long you might have to wait to get things sorted out and items returned to their rightful owners. The UCC filing could prove helpful if issues or delays do come up, or ownership questions arise. It can't hurt.

[Peter_Spaeth]

Originally Posted by BobC

And exactly why I said I agree with you. But in the case of say a bankruptcy, there can end up being some confusion as to what items really belong to whom, and no telling how long you might have to wait to get things sorted out and items returned to their rightful owners. The UCC filing could prove helpful if issues or delays do come up, or ownership questions arise. It can't hurt.

Yes we are on the same page.

[Casey2296]

Originally Posted by Peter_Spaeth

I don't see any risk other than there can always be wrong decisions and there can always be a hassle when one is dealing with bankruptcy courts. If the law is applied correctly, your stored cards should not become assets of the debtor's estate subject to creditor claims, even without a UCC-1.

I learned the hard way as a creditor who didn't file one, that a properly filed UCC-1 takes senior position over debt not protected by one. The Vault assets may not be viewed as company assets but you never know what the BK Trustee is going to do when things go South, your cards could be tied up for years. If you have a substantial dollar amount in the vault it would be prudent to file a UCC-1.

Like my Dentist says, "you don't have to floss all your teeth, just the ones you want to keep".

[BobC]

Originally Posted by Casey2296

I learned the hard way as a creditor who didn't file one, that a properly filed UCC-1 takes senior position over debt not protected by one. The Vault assets may not be viewed as company assets but you never know what the BK Trustee is going to do when things go South, your cards could be tied up for years. If you have a substantial dollar amount in the vault it would be prudent to file a UCC-1.

Like my Dentist says, "you don't have to floss all your teeth, just the ones you want to keep".

Exactly right Casey (and sorry to hear you ended up having to learn it the hard way). Plus, does anyone truly know what the exact recordkeeping and documentation functions and procedures are of these vault operators? If their records and/or documentation are not all they should be, it can make proving someone's ownership of items they are holding all the more difficult and definitely prolong recovery of them.

Believe it or not, there actually may be a way to find out and better assure yourself that these vault operators are handling and keeping your vault-held items safe and properly accounting for and keeping records of them. And you can thank CPAs for it. If you are already using, or thinking of using, a vault service, simply ask them for a copy of their most recent SOC-2 report on their vault service. And if they tell you they don't have one done (or even worse have no clue what you're talking about), ask them when they're going to start having one done so you can get a copy.

I'm going to guess none of them currently have one done, nor want to voluntarily go through the time and expense of doing so. But if they did, doing so would definitely enhance their transparency of what and how they do things and add tremendously to public/customer confidence in their services being provided.

And for those that don't know (which is likely most anyone reading this) what an SOC-2 report is, SOC now stands for "System and Organization Controls" (and originally stood for "Service Organization Controls) and is basically a detailed description, examination of, and report on what a service company like a vault operator/provider does (or at least says they're supposed to be doing), how they do it, and how well they do it. There is no explicit legal requirement for any service company to have such a report done, but can be a definite determining factor in people and businesses deciding who they will ultimately choose and hire to provide services for them.