SUBJECT: BEWARE Steve Verkman, Keith Vari, Leland’s, Clean Sweep & Paragon auctions

[brianp-beme]

Originally Posted by Leon

Steve Verkman is out of pocket and asked me to post this for him. I am cutting and pasting....thanks


Hi Leon,

Can you please post this for me:

"This post is not accurate. With very large collections that involve hundreds and hundreds of lots and photographs, we do have to charge an extra fee.

The labor involved in this is extremely extensive and we take care to break these collections up over hundreds of lots to maximize the value for our consignors.

Mr. Borozny will get 60% of the buyer's premium, this was explained to him over the phone.

We explained to Mr. Borozny at the time how much work would be involved in this collection, that literally a team of people would be working on it, so we will have to charge for that.

We have never and would never take advantage of someone. The amount of work going carefully through a collection of this size, with most items not organized or authenticated, is a massive endeavor.


Thanks much - Steve Verkman"



.

Looking at this response, it does seem to only indicate that the consigner would be getting 60% of the buyer's premium. I believe the buyer's premium is 20%, so if this was the case the consigner would only be receiving 12% of the final winning bid amounts.

Of course this can't be correct, so once again a little better communication would hopefully clear things up.

Brian

[Casey2296]

-
OP, best of luck recovering from your life/health situation.

I know nothing of the amount/value of items in your collection, the negotiation that took place, or what industry standard is for an AH within those parameters, so I will defer to others responding to that aspect of the post.
-

[joeb]

1) I didn't know Steve was coming, I had been in touch with Keith. Steve showed up with him. In looking at his consignment terms on his website under the "Integrity" section - see attached screenshot - he states they charge a 10% commission on items selling over $500 and 15% for those selling under $500.

2) While Steve says I am getting 60% of both the hammer and buyers premium that leaves the "house" taking 40% of the entire sale - considerably higher than advertised and considerably more than industry standard for such a valuable collection. I have already been contacted by another auction house telling me if I am successful getting the collection returned they would take it on consignment and give me 100% of the hammer + a percentage of the buyers premium.

3) Additionally, while I was looking for other items to show them, Steve was digging through and took items without my knowledge which I discovered after they were gone. My suspicion was confirmed when Steve sent me a list of items in his possession.

[puckpaul]

Sounds like the consigner is getting 60% of all including the buyer’s premium. That doesnt seem out of line considering the esoteric nature of this collection (i would hardly call the noted items top sellers like a Ruth or a mainstream set or card), the fact that it seems like most of it is ungraded and unauthenticated (costs involved there as well), and it sounds like a lot of smaller items that all need to be catalogued and written up for sale, there is a lot of work here for Steve and crew. Many AH and dealers would have trouble selling the low end items at all, something that Steve can handle.

I have worked with Steve V for 36 years in this hobby and find him to have the highest integrity in the business, a knowledgable dealer who works hard for his consigners and clients. While we dont have all of the information involved, I dont think this is a fair portrayal by the OP.

Paul

[notfast]

There is no way that diner receipt looking piece of paper with scribble on it is what a company uses for a 6 figure consignment contract….right?

[BobbyStrawberry]

Originally Posted by notfast

There is no way that diner receipt looking piece of paper with scribble on it is what a company uses for a 6 figure consignment contract….right?

Sure looks like it.

[notfast]

So we have 3 options here. I think…

Consignor gets one of these:

• 60% of hammer and 60% of buyers premium
  
• 60% of total sale price (hammer + BP) same as above
  
• 60% of hammer

All of these are horrible for the consignor but with a $15k cash advance I could see them being valid unfortunately.

[Mark17]

Originally Posted by notfast

So we have 3 options here. I think…

Consignor gets one of these:

• 60% of hammer and 60% of buyers premium
  
• 60% of total sale price (hammer + BP) same as above
  
• 60% of hammer

All of these are horrible for the consignor but with a $15k cash advance I could see them being valid unfortunately.

Points 1 and 2 are the same thing. Point 3, plus the email clarification Leon shared, becomes the same as points 1 and 2. Conclusion: it's a straight 60-40 split with no additional costs assigned to seller.

I'm not a lawyer, and I don't play one on TV or Net54, but my guess is the $15,000 cash advance is something auction houses like to do, to seal the contract. In other words, I think the willing exchange of cash makes a contract more binding.

Lawyers, please correct me if I'm wrong.

[gregndodgers]

It may be possible to void or rescind any contract. It depends on the circumstances. On the one hand is an older gentleman with a severe medical problem. On the other, we have a very sophisticated auction house who negotiates these contract a lot. Hmmmm.

[Vintage Vern]

Do they have any termination clause listed?

[sflayank]

In response to the comment
If the consignor is getting 60% of the total
That's. Okay,?...wow...the auction house taking 40%
He might as well bring his cards to a loan shark
Extra work?...,isn't that the JOB of the auction house
To organize, take pictures etc
Geez

[bbcard1]

Let me attempt to translate and I speak misconstrued emails, partial communications, and knee jerk reactions fairly fluently.

I believe the buyer will receive the full amount to the sale plus sixty percent of the hammer fee but will be assessed some unspecified fee for the the labor involved or for some lower priced lots...

I believe in general terms if an item sold for $1000 and the hammer fee was $200, the consignor would get $1120 but may be assessed an undetermined fee.

I think the fact that two auctionhouses showed up with trucks didn't help a lot. I can see the wisdom of it as big collections need a lot of outlets and some things would fit better with Lelands while others would fit better with CSA. This could have been allayed with better up-front communications, preferably in writing, which may or may not have happened.

I suspect if they had just shown up and offered 100% of the hammer fee and arranged for pick up later, everyone would have been happy.

[conor912]

Originally Posted by bbcard1

Let me attempt to translate and I speak misconstrued emails, partial communications, and knee jerk reactions fairly fluently.

I believe the buyer will receive the full amount to the sale plus sixty percent of the hammer fee but will be assessed some unspecified fee for the the labor involved or for some lower priced lots...

I believe in general terms if an item sold for $1000 and the hammer fee was $200, the consignor would get $1120 but may be assessed an undetermined fee.

I think the fact that two auctionhouses showed up with trucks didn't help a lot. I can see the wisdom of it as big collections need a lot of outlets and some things would fit better with Lelands while others would fit better with CSA. This could have been allayed with better up-front communications, preferably in writing, which may or may not have happened.

I suspect if they had just shown up and offered 100% of the hammer fee and arranged for pick up later, everyone would have been happy.

Agreed. Numbers aside, the pickup was sloppy. Give the guy a couple days heads up to look through and enjoy his collection one last time.

[egri]

Originally Posted by ocjack

I'm late to the party, but in a quick review of the postings, I don't see anywhere that Steve Verkman actually commented on the transaction. Just a lot of "I spoke to Steve..." and "Steve told me..." comments.

Is there a reason Steve doesn't come on and explain the transaction himself? Wouldn't that be better than alot of heresay evidence? If I missed Steve's comments, I'm sorry. But short of that, it appears - to my mind - that he may not want to be on the record with any comments.

Just my 2cents.

There is this message Steve sent to Leon to post at the beginning of the thread:

Originally Posted by Leon

Steve Verkman is out of pocket and asked me to post this for him. I am cutting and pasting....thanks


Hi Leon,

Can you please post this for me:

"This post is not accurate. With very large collections that involve hundreds and hundreds of lots and photographs, we do have to charge an extra fee.

The labor involved in this is extremely extensive and we take care to break these collections up over hundreds of lots to maximize the value for our consignors.

Mr. Borozny will get 60% of the buyer's premium, this was explained to him over the phone.

We explained to Mr. Borozny at the time how much work would be involved in this collection, that literally a team of people would be working on it, so we will have to charge for that.

We have never and would never take advantage of someone. The amount of work going carefully through a collection of this size, with most items not organized or authenticated, is a massive endeavor.


Thanks much - Steve Verkman"






.

Other than that and OP’s two posts, there hasn’t been anything else from either of the two principals.

[Mark17]

Originally Posted by egri

There is this message Steve sent to Leon to post at the beginning of the thread:



Other than that and OP’s two posts, there hasn’t been anything else from either of the two principals.

But that hasn't deterred us from creating an additional 200+ posts filled with speculation and opinion.

[BobbyStrawberry]

So is OP being charged interest on the advance or not?

[clydepepper]

Originally Posted by BobbyStrawberry

So is OP being charged interest on the advance or not?

FINALLY...some levity to lighten things up...

PEACE!

[egri]

Originally Posted by Mark17

But that hasn't deterred us from creating an additional 200+ posts filled with speculation and opinion.

‘Twas ever thus.

[sflayank]

the way it reads and the response sounds like the op would end up with $720 not $1120
if 1120 hes doing great if 720 hes being robbed
the op would not be complaining if hes getting 1120 on 1000

[Jewish-collector]

So, if it sells for $100,000 how much does he get ?

[bbcard1]

Originally Posted by sflayank

the way it reads and the response sounds like the op would end up with $720 not $1120
if 1120 hes doing great if 720 hes being robbed
the op would not be complaining if hes getting 1120 on 1000

I think he was being proposed was not well explained or else not well understood.

[gunboat82]

The contract is not very detailed, so I can understand the consignor's confusion. In the first column, under "Schedule A: The Property > Description," it just says:

MASS CONSIGNMENT BETWEEN LELANDS/CLEAN SWEEP AUCTIONS
60% CONSIGNOR 40% AUCTION HOUSE
CASH ADVANCE $15,000
NO ADDITIONAL FEES
60/40 SPLIT [illegible] AUTH.

In the second column, under "Seller Reserve," it just says what appears to be:

60/40 SPLIT
40% LELANDS

[G1911]

Now it makes sense why the rebuttal was incredibly vague about how the OP is untrue and the only specific was about a phone call and not the contract.

The contract sure seems to give the cosigner only 60%. I don't see the BP mentioned at all, but maybe that relates to the sellers reserve column. I don't know why, but I expected a vaguely professional real contract for a six figure plus deal. OP's claims seem to be on the main points factually correct.

Hard to see 60% (possibly even lower in reality with the vague or non-existent BP references in this 'contract') being fair and reasonable. If they did indeed cherry pick only the good items as OP said, and thus are not doing a ton of work with low value stuff to get rid of, OP has been bent over.

[daves_resale_shop]

Originally Posted by G1911

Now it makes sense why the rebuttal was incredibly vague about how the OP is untrue and the only specific was about a phone call and not the contract.

The contract sure seems to give the cosigner only 60%. I don't see the BP mentioned at all, but maybe that relates to the sellers reserve column. I don't know why, but I expected a vaguely professional real contract for a six figure plus deal. OP's claims seem to be on the main points factually correct.

Hard to see 60% (possibly even lower in reality with the vague or non-existent BP references in this 'contract') being fair and reasonable. If they did indeed cherry pick only the good items as OP said, and thus are not doing a ton of work with low value stuff to get rid of, OP has been bent over.

Also stated that the cost of authentication will be shared with the consignor… important to note is that not everything was taken and the collection was cherry picked… seems like a pretty hefty consignment fee to pay for only the good stuff.

[rand1com]

What you see pictured here IS the contract in my opinion.

It is pretty clear that the consignor gets 60% of the hammer and additionally 60% of the buyer premium based on Steve's note.

So, if the hammer is $100K, he gets $72K minus his 60% of the authentication fees which could be substantial.

I doubt any other auction house would have done any better on the cut based on what is likely a very unorganized collection with little authentication and hundreds of hours of work involved.

Ebay takes 12.35% with the seller doing all of the work.

Sure, you give an auction house 5 items worth $100K they will be happy to give you the hammer and half of the BP as they make $10K for a few hours of work. Do that 100 times equals a million dollar take for probably less time than this collection will take to process and sell.

I know Steve Verkman well and he has always been very fair in my dealings with him.

You would have to know the actual volume and contents of the collection to make an intelligent evaluation of what is a fair deal to the consignor.

If you offered to sell outright a collection like this one that was worth $100K on the back end to any auction house, you would be very fortunate to get $50K for it. He will do much better in this scenario.

There truly are two sides to every story and we have almost no information on either of them but Steve has been in this hobby for 35 years or so and has a record to stand on that I trust based on 30+ years of experience dealing with him.

[jayshum]

Originally Posted by rand1com

What you see pictured here IS the contract in my opinion.

It is pretty clear that the consignor gets 60% of the hammer and additionally 60% of the buyer premium based on Steve's note.

So, if the hammer is $100K, he gets $72K minus his 60% of the authentication fees which could be substantial.

I doubt any other auction house would have done any better on the cut based on what is likely a very unorganized collection with little authentication and hundreds of hours of work involved.

Ebay takes 12.35% with the seller doing all of the work.

Sure, you give an auction house 5 items worth $100K they will be happy to give you the hammer and half of the BP as they make $10K for a few hours of work. Do that 100 times equals a million dollar take for probably less time than this collection will take to process and sell.

I know Steve Verkman well and he has always been very fair in my dealings with him.

You would have to know the actual volume and contents of the collection to make an intelligent evaluation of what is a fair deal to the consignor.

If you offered to sell outright a collection like this one that was worth $100K on the back end to any auction house, you would be very fortunate to get $50K for it. He will do much better in this scenario.

There truly are two sides to every story and we have almost no information on either of them but Steve has been in this hobby for 35 years or so and has a record to stand on that I trust based on 30+ years of experience dealing with him.

The contract says no additional fees so if there are significant costs for grading or authentication, those apparently are being paid from the 40% that the auction house is getting which does make the fee seem more reasonable.

[rand1com]

Originally Posted by jayshum

The contract says no additional fees so if there are significant costs for grading or authentication, those apparently are being paid from the 40% that the auction house is getting which does make the fee seem more reasonable.

Last line on the contract appears to state 60/40 split on authentication which likely means the same ratio for that expense as on the final take. At least, that is how I interpreted that line.

I doubt very seriously the AH is covering all of the authentication fees.

[jayshum]

Originally Posted by rand1com

Last line on the contract appears to state 60/40 split on authentication which likely means the same ratio for that expense as on the final take. At least, that is how I interpreted that line.

I doubt very seriously the AH is covering all of the authentication fees.

You're right. I missed that.

[Luke]

Based on Steve's response via Leon, it looks to me like the consignor gets 60% of the total sale (hammer plus BP) and the AH gets 40%. In a vacuum, if the collection really took 2 trucks to haul away, I agree with Steve that that sounds like a massive amount of work (and payroll for his employees) to go through and scan and list. That's just looking at the monetary part.

It would be interesting to hear from other AH owners on how they structure taking a massive collection that is going to take them tons of hours to bring to market.

[Mark17]

Originally Posted by rand1com

Last line on the contract appears to state 60/40 split on authentication which likely means the same ratio for that expense as on the final take. At least, that is how I interpreted that line.

I doubt very seriously the AH is covering all of the authentication fees.

Would the prior line, stating no additional fees, contradict (or negate) that final line?

Also, on that last line, who pays the 60% and who pays the 40% isn't specified. In other places, the consignor GETS the 60%. Does that final line imply the consignor gets, or pays, the 60%?

Would that ambiguity create a legal loophole?

[rand1com]

Originally Posted by Mark17

Would the prior line, stating no additional fees, contradict (or negate) that final line?

Also, on that last line, who pays the 60% and who pays the 40% isn't specified. In other places, the consignor GETS the 60%. Does that final line imply the consignor gets, or pays, the 60%?

Would that ambiguity create a legal loophole?

Maybe, but I doubt it.

I know lawyers look for detailed contracts but these are very basic. There is a clause somewhere in there that states your signature makes it a binding contract based on the terms agreed to or some statement like that.

I believe the consignor pays 60% of the authentication fees based on the way it is written but that is a guess on my part.