Auction Houses-Going, Going..Gone?

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Posted By: Eric B

Would one of the lawyers (or someone who stayed at a Holiday Inn) please check over Mastro's terms and clarify what happens if a bidder should win a lot, send in his money and then Mastro goes under? Is there risk of the card being seized or would it definitely be delivered to the winning bidder?



That's a good question Matt. If you were to pay for a service, and the company goes under, you are out the money. But if you pay for an item, then you have Title to that item.....except that so does the Consigner if he hasn't been paid. But I bet the Consigner has better legal recourse since he is the Owner UNTIL he gets paid (definition of to consign).

So Barry, I'm not so sure it's a bargain. I wouldn't bid unless I could work out a in-person switch of payment and item. Even then, if the company goes under, and the cash doesn't get to the Consigner, you will have to return the item. There was an article recently about folks buying used cars from Dealers who never paid off the loan from the trade-in. The courts took the car from the buyer and they were out the money since the Dealer had gone bankrupt - the lienholder (similar to consigner in this case) had all the rights.

I think I just answered Matt's question. The buyer would be out the cash AND even if he was to receive the goods, he would have to return it and file a non-secured claim.

So it may be safe to consign to an Auction House, but not to buy. But who would consign to a Auction House with no buyers? Mastronet is Dead unless they can post collateral to a 3rd party.