New lawsuit accuses PWCC of massive shill bidding

[Tabe]

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

[tjisonline]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

i'm def not giving the old pwcc regime a pass but it sure sounds like ALT needs money in a bad way and are reaching here. they bought cards from pwcc at the peak to have cards in their marketplace? yeah, didn't turn out to be a good idea.

[Leon]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

I think, but not sure, I read that the amount includes punitive damages.

.

[sacentaur]

CGC recently lost a $10 million lawsuit (they jury deliberated less than an hour) from a couple who restored/recreated high-end comic books claiming they were slandered by CGC (who also refused to grade their books), so I wouldn’t be so sure that this action has no chance of prevailing (even via a smaller settlement).

[Balticfox]

Hmmmm, shill bidding? How many hours do you think it will take now for a class action lawsuit to be filed against PWCC?

And what did the initials PWCC stand for anyway?

[perezfan]

Originally Posted by Balticfox

Hmmmm, shill bidding? How many hours do you think it will take now for a class action lawsuit to be filed against PWCC?

And what did the initials PWCC stand for anyway?

Profiting
While
Cutting
Ccards

[nolemmings]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

Their damages analysis is creative but speculative, and not likely to carry the day. They assert that they lost $4.5M from the cards they won in PWCC auctions, then allege that PWCC's conduct artificially and wrongfully inflated values throughout the hobby by over 40%, such that cards they won in other auctions were overpaid by another $9.2M. That's how they get to $13.7M. See paragraphs 48-51. Good luck with that.

Personally I thought the Complaint was rather meh and lacked some basic allegations on causation and malice, even if those can be inferred and later added through amendment. Still, it could be interesting to follow this, especially if affidavits/declarations are part of the record. I would expect Brent and spouse to be added if the matter continues, and will pony up some $$$ if it quietly settles.

[ASF123]

Originally Posted by nolemmings

Their damages analysis is creative but speculative, and not likely to carry the day. They assert that they lost $4.5M from the cards they won in PWCC auctions, then allege that PWCC's conduct artificially and wrongfully inflated values throughout the hobby by over 40%, such that cards they won in other auctions were overpaid by another $9.2M. That's how they get to $13.7M. See paragraphs 48-51. Good luck with that.

(Aside for the non-lawyers here: In the legal community, “creative” is a term of art meaning “absolute bullshit.”)

[Peter_Spaeth]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

Part of that is their claim (no comment on the merits) that PWCC's activities artificially inflated the entire market. The same claim that many made with regard to Mastro, so it's nothing new.

[raulus]

As a business owner, the whole situation fascinates and flummoxes me.

It sure seems like PWCC had a perfectly solid business that was basically printing money through normal operations by operating their boring little monthly eBay auctions. Seems like only a fool would mess with that. I guess you could argue that it was too boring and pedestrian as far as business models go, without a whole lot of flash and pizzazz.

And yet the only way that these allegations make any sense is if PWCC decided that they needed even more, and the only way to get there was by engaging in shenanigans and monkeyshines, because they thought they could get away with it?

I suppose to some extent they did get away with it, in terms of not going to jail or facing any serious consequences, aside from the business basically collapsing, and who knows how much (or little) in value accruing to the original ownership in the sale to Fanatics. I think we've had some debates around here about that point, but none of us seems to really know whether the original ownership actually got any cash in the sale. If they got nothing, then that has to hurt. If the payout was 8 or 9 figures (seems unlikely to me), then I guess it worked out well for them in the end.

But for my money, particularly with the benefit of hindsight, it sure seems like a terrible idea to take a perfectly solid business and basically bet the farm by chasing a little more. But maybe as an accountant, I'm just way too conservative in my approach to managing my business to swing out of my shoes at every pitch that comes my way.

[Peter_Spaeth]

Originally Posted by raulus

As a business owner, the whole situation fascinates and flummoxes me.

It sure seems like PWCC had a perfectly solid business that was basically printing money through normal operations by operating their boring little monthly eBay auctions. Seems like only a fool would mess with that. I guess you could argue that it was too boring and pedestrian as far as business models go, without a whole lot of flash and pizzazz.

And yet the only way that these allegations make any sense is if PWCC decided that they needed even more, and the only way to get there was by engaging in shenanigans and monkeyshines, because they thought they could get away with it?

I suppose to some extent they did get away with it, in terms of not going to jail or facing any serious consequences, aside from the business basically collapsing, and who knows how much (or little) in value accruing to the original ownership in the sale to Fanatics. I think we've had some debates around here about that point, but none of us seems to really know whether the original ownership actually got any cash in the sale. If they got nothing, then that has to hurt. If the payout was 8 or 9 figures (seems unlikely to me), then I guess it worked out well for them in the end.

But for my money, particularly with the benefit of hindsight, it sure seems like a terrible idea to take a perfectly solid business and basically bet the farm by chasing a little more. But maybe as an accountant, I'm just way too conservative in my approach to managing my business to swing out of my shoes at every pitch that comes my way.

Never underestimate greed and hubris. There are countless criminals who probably could have made a nice living with a legitimate version of their business.

[raulus]

Originally Posted by Peter_Spaeth

Never underestimate greed and hubris.

And I guess a willingness to cross a lot of red lines. If the allegations are true, then there doesn’t seem to be much in the way of a moral compass in play.

[Peter_Spaeth]

Originally Posted by raulus

And I guess a willingness to cross a lot of red lines. If the allegations are true, then there doesn’t seem to be much in the way of a moral compass in play.

BTW Brent was hooked in with notorious card doctors amost from day one. Not like he had a completely legit business then went south.

[raulus]

Originally Posted by Peter_Spaeth

BTW Brent was hooked in with notorious card doctors amost from day one. Not like he had a completely legit business then went south.

Fair enough.

And maybe that's how the business really survived, with the auction platform being more of a side show, with the real action in the shadows.

Not sure if that's 100% true, simply because it seemed like they were running huge volumes of cards through their eBay auction service by 2017 and beyond. But maybe the initial success from all the doctoring helped to jumpstart the auction service?

[ASF123]

Originally Posted by raulus

And I guess a willingness to cross a lot of red lines. If the allegations are true, then there doesn’t seem to be much in the way of a moral compass in play.

Allow me to introduce you to American capitalism. You must be new here.

[Tabe]

Originally Posted by nolemmings

Their damages analysis is creative but speculative, and not likely to carry the day. They assert that they lost $4.5M from the cards they won in PWCC auctions, then allege that PWCC's conduct artificially and wrongfully inflated values throughout the hobby by over 40%, such that cards they won in other auctions were overpaid by another $9.2M. That's how they get to $13.7M. See paragraphs 48-51. Good luck with that.

Originally Posted by Peter_Spaeth

Part of that is their claim (no comment on the merits) that PWCC's activities artificially inflated the entire market. The same claim that many made with regard to Mastro, so it's nothing new.

Thank you both. Appreciate the explanation.

[steve B]

Originally Posted by Tabe

I'm curious to see the math behind their numbers. They claim they sustained losses of $13.9m because of PWCC but spent just over $10m on PWCC's platform. So they're blaming PWCC for a LOT of losses outside of the PWCC platform. OK...

Maybe an accounting thing?

Having huge bids outstanding means tying up money that could be spent somewhere else. So purchases not made and profits lost because of that?

Not that it would have been a good practice to operate with so little reserve cash like that. But they admit placing stupid bids to get showy stuff to auction.