Mastro/Legendary Article in Today's NY Daily News

[jmk59]

Sometimes I swear I must be the biggest dumb-ass in the world. Or just incredibly naive. I know that credit is normal, and all that. But if Mastro was giving the big guns time to pay, wouldn't it just stand to reason that there is a "Gotcha covered" buried in there somewhere? That it was an extension of a business courtesy on their part to cover the money short term and not an offer at the risk of the consignor? Would you think anyone would even have to ask that? I know I wouldn't.

And am I also naive to think that, if these courtesies are going to be extended, Mastro (or anyone else handling so much of other people's cards or money) would take even the most basic precautions around the process? Like getting it in writing, at least. Or retaining some interest or ability to retrieve either the cards or the value if the payments fell through.

Here's what bugs me. First of all, I don't remember a time in this hobby in which there wasn't chronic speculation and grouching about favoritism to bigwigs while the individual small and medium or unconnected collectors sat on the sidelines playing by the rules. That's been out there on everything from auction house practices to grading preferences for the big submitters. Now the favoritism is crashing the news today, with the exact outcome that the little guy got nailed so the big shots could play mover and shaker.

At the center of it all is Mastro. I know there are people that didn't pay Mastro. But these people were not in a position to limit the fallout and shield the collectors and consignors that had owned the items. Mastro was the only entity that could have done that, and they didn't.

Personally, I couldn't pick either Dave Forman or Bill Fisher out of a crowd of two - don't know them at all. But I think it's unfortunate that their money issues are playing out in public, especially since I absolutely don't believe that the issue of consignor non-payment has the slightest thing to do with them. It's just more noise around the central issue of Mastro's behavior.

I understand that some of the bigger players in the hobby might want to look at what it means that Forman is still in cards while owning a grading company (although the recent REA auction had some pretty impressive disclosure) and wonder if there is an appearance of impropriety.

I'm more concerned with the actual improrpriety by Mastro that has already come out, already affected real people and collectors and is by far the biggest taint on the hobby in this whole mess.


J

[Peter_Spaeth]

I respectfully disagree with the above for the most part. Two or three people stiff Mastro for hundreds of thousands of dollars (allegedly of course), and Mastro is the evildoer? EDIT TO ADD I don't understand the comment that the issue of consignor non-payment has nothing to do with Fisher or Forman or Jay's third person. If Mastro is out $1 million or whatever and has no access to its credit line, then it is going to affect its ability to make payments. Could one fault Mastro, in hindsight, for extending credit? Perhaps, perhaps not -- there were likely very good reasons to do it. But to suggest the people reneging (allegedly) on their obligations are beside the point does not seem reasonable to me.

[jmk59]

Yes Peter, I really think they are. They were the ones that let it affect individual consignors and collectors. The non-payers didn't do that. They may not even have known that a default would do that. The consignors certainly didn't know it. Mastro was the only one that could control that outcome.

Somehow it is different with a consignment. It's not the same as Company X buying raw materials from Company Y with 30-day terms and then not being able to pay Y because the customers of X didn't come through.

With consignments, you are trusting someone with your individual specific property. You aren't selling them inventory on a commercial basis. The process and duty seems different.

This is why I think I may miss something in these kinds of situations. I do look at the consignors that got shafted as the innocent victims - individuals and collectors that trusted Mastro with selling cards for them. Maybe that's where I'm naive. If these consignors are all, themselves, turning these things over as part of an ongoing business, then maybe it is more like the commercial vendor selling inventory as a matter of course.

But it seems to me that just because the back half of the process - the relationship between the auctioneer and dealer/bidders - looks more like a normal commercial environment, the front half where the consignors are still looks sort of like innocent individuals.

J

[Peter_Spaeth]

As Jay and or Corey already pointed out, the willingness to extend credit probably resulted historically in making huge sums FOR consignors, as otherwise numerous bids would not have been placed. In hindsight it is easy to point the finger, but one has to assess the wisdom and propriety of a practice contemporaneously.

Now if as has been alleged there was shill bidding, that is a horse of another color.

[jmk59]

But Peter, I don't think I'm pointing the finger after the fact because it looks clearer that way. I'm more genuinely dumbfounded that someone would do this with someone else's property, especially on such a large scale.

It's not like people gave them money to invest. Or entered the transaction from a commercial standpoint with all of the normal commercial risks. These were individuals that sent specific pieces of property to Mastro simply to sell, keep a cut and pass on the proceeds.

Again, this is where I'm not sure if I am naive or not. I have never consigned to an auction house, but if I did I would not have the foggiest notion that I am undertaking commercial risks normally associated with business. It would be my actual physical and identifiable card that I'm sending. What could go wrong? If anything happens, I just get my card back, right?

That's what I'd think, anyways. Probably the reason that I am sympathetic to the consignors is because it could so so so easily be me, and no doubt I would absolutely NEVER have seen it coming - would never even have considered the possibility of someone selling my cards and keeping the money as I made the decision to consign.

J

[cyseymour]

Joann,

I hear where you are coming from, but remember - if you take something and don't pay for it, that's stealing. It's illegal. Mastro may have enabled it, but the people who did it, still did it. It was Forman who took items without paying, and has caused great grief and stress to the people who need the money the most - the "small time" collectors. It is stealing. You can say what you want about the possibility of shill bidding, but if Forman never paid and took the cards anyway, then it's irrelevant.

Anyone who sides with Forman on this matter, I think, I wouldn't have a lot of interest in buying cards from them on the B/S/T board - cause who really knows if I'd get my side of the deal?

Jamie

[mightyq]

also dont forget that dave formans brother ..steve is a dealer....he is around philly buying all the time. does he submit cards to sgc? does he sell cards for dave? i could go on, way way to many questions here. he may be not guilty, (dave) but way to many questions where there shouldnt be!

[WarHoundR69]

I might be the only one here, but I'm most intrigued by the comic book debacle. How do you "LOSE" a collectible worth a couple hundred grand?

Doesn't pass the smell test.

Plus was it a raw Action Comics No. 1 or a CGC9.6 Marvel Key such as Amazing Fantasy No. 15, FF No. 1 or Spiderman No. 1?

In others words a raw Golden Age Key or a very High Grade (Graded) Silver Age Key?

I would just like to know what the comic book was - not too many are worth several hundred grand.

For that matter it could even be a graded Golden Age Key - a few of those in high enough grade would fetch those bucks.

[sreader3]

The bombshell here is not the well-known cloud over Mastro / Legendary auctions, but that Dave Forman was (is) involved in the hobby as a major buyer/seller. I can only imagine how this Board would react if Joe Orlando had been a major player in Mastro Auctions and bought (at least) $400K in cards! I, for one, would like to have SGC aver that it has never graded a card submitted by Mr. Forman (although I seriously doubt that such a declaration will be forthcoming).

I look forward to the future Daily News articles investigating the Mastro / Forman / SGC connection.

[uniship]

You need not worry, it's not you. You just happen to be a logical thinker here analyzing an insane situation.

Rest assured that there are many many others like you who are utterly shocked and basically horrified at this information.

[Peter_Spaeth]

And JoAnn if they told you they could realize 10-20-30 percent more for your item by extending credit to bidders who were substantial persons in the hobby with perfect payment records, and that of course they would pay you out of their general funds or go to their credit lines if necessary in the remote event there was an issue, what then?

[uniship]

they didnt tell her that

[jmk59]

Peter, in that scenario I would have the option to weigh the risks and decide. I might very well decide to do it. Or not. But no one was given the option or even told.

It's just a bad deal all the way around.

J

(And it's possible that I would have said no anyways, or at least asked a LOT of questions about whether this was normal practice, where would I be in line, what happened if someone didn't pay, had it ever happened before? I may have asked all of those questions and been a general pain in the rear b/c I'm sometimes sort of like that when I don't really understand something very well.)