Mastro/Legendary Article in Today's NY Daily News

[slidekellyslide]

"Forman's attorney, Jeffrey Lichtman, says that his client doesn't deny that he has an outstanding balance. But that figure is less than the lawsuit contends because Mastro officials did not subtract the value of baseball cards sold by the auction house against Forman's wishes. Forman had given the cards to Mastro Auctions for a future sale, but when the economy turned sour - and with the FBI probe tarnishing the auction house's reputation - Forman decided to hold on to the cards. Instead, Lichtman says, they were sold at a Mastro Auction for much less than Forman might have gotten at a future date with a different auction house."


-------------------------------------------------------------

I'm sorry, but Forman's defense sounds ridiculous to me....The shilling allegations against Mastro have been going on for years and I don't think for one minute that Forman didn't know about them...I also think it's ridiculous to hold Mastro responsible for an outside sale that didn't go through because the seller lost the comic book...no money changed hands! And why would Mastro return cards to Forman if he owed them $400,000?? What did Forman do with the items he won from Mastro?? And how does Forman/Lichtman know that he could have gotten more for the cards at a later date with a different auction house?? Especially considering the economy.

[Exhibitman]

It had no credit to extend. The "credit" was other peoples' possesions that were entrusted to Mastro, that Mastro did not own, and that Mastro did not have the owners' permission to "lend" to the bidders.

I reviewed a Mastro consignment of mine to see whether it said anything about making loans with my stuff. Not surprisingly, there isn't a word in there to that effect, but it does say this:

"If any Buyer does not pay us for any Memorabilia within sixty (60) days after the end of an Auction, you have the option to withdraw the Memorabilia and have us return it to you, at your expense, or you may leave the Memorabilia with us for placement in another Auction."

So, not only did Mastro NOT inform consignors that it had the right to send their stuff out without payment, they promised consignors that if the item was unpaid for 60 days, it could be reclaimed. You cannot possibly tell me that what Mastro promised to its consignors is consistent with Mastro "extending credit" by "loaning" the consigned items to bidders. By definition, if the item's owner had the right to take it back from Mastro after 60 days, the item never, ever should have been sent out by Mastro to a bidder without payment first being received by Mastro. I do not think I would have any problem in court proving that this condition in the contract constitutes a promise by Mastro that it will hold onto the items until they were paid for by the winning bidders, and that continuing to make this promise despite what is now apparent was a long history of repeated violation of this promise is evidence of a management policy of actively defrauding consignors. The fact that they weren't caught until now is not an indicator of the soundness of the practice; by that logic Bernie Madoff did nothing wrong except to the last people who didn't get their principal back.

As far as SGC goes, that is another case. Right now it is supposition and innuendo--we don't know what really happened, yet. What we do know, right now, is that Lege-stro screwed some of its consignors. It is a much "bigger" story to me at this point because it is proven. Some of our members have had the pleasure of watching their cards sold on Ebay with no money to show for it from Lege-stro.

[rhettyeakley]

I in no way am defending what Mastro/Legendary has done in the past. They seem to have shot themselves in the foot several times, and are guilty of at least being terrible businessmen. That being said, I guess I'm not all that surprsed that Mastro/Legendary is in the middle of this thing. They certainly seem to deserve most of what is being heaped on them at this point.

However, when reading this story for the first time earlier today what WAS surprising to me was he Dave Forman/SGC thing. I literally thought to myself after reading it "Holy crap, this is NOT going to go well for Forman". The Mastro stuff isn't as surprising to me because none of what was in there was "new", most of it had been at least alluded to over the past several months. The SGC/Forman thing is "new" and it is rightfully being scritinized based on the information that we have. I must admit though it doesn't pass the smell test.

I am far from a PSA apologist but if this was Joe Orlando/PSA the pitchforks would already be out. It does seems like a bit of a double standard from many here.

[dennis]

"I am far from a PSA apologist but if this was Joe Orlando/PSA the pitchforks would already be out. It does seems like a bit of a double standard from many here."[/QUOTE]
who will start the thread i will not send in cards to sgc?

[JamesGallo]

So no one has addressed what impact Dave has on day to day activity. I don't think Joe Orlando is sitting grading cards or unpacking orders, I don't think Dave is either.

I am not saying he is without guilt, but to fry him without pretty much any facts would be getting very much ahead or ourselves.

I think each person will have to make a decision on if they really believe that the graders do not know who the cards belong to. If that is the case then it really doesn't matter who submitted the cards and therefore I think some of the conflict of interest is removed, not all but sum.

Like I said without knowing any facts or what Dave's daily duties are I certainly can't make a decision to fry him or not.

Sometimes owners of companies can make bad decisions that doesn't mean the company as a whole is a pile of crap. I am not happy about this news, but I don't think it is as damaging as not opening on Mondays :-)

In a way I hope this goes to court, but there are always 3 sides to a story and I am not sure we will ever really know what the truth is regardless of the outcome of the case. It is very possible that the person who is right could very well get screwed.

James G

James G

[rhettyeakley]

James, we are pretty much in agreement. I have no intention to "fry" him. It just looks really bad, and his explanation in the story (if accurate) is kinda disturbing. In the end it will all play out and those that have done wrong will bear the consequences of their actions/decisions so I agree 100% with you that no pitchforks are neded.
-Rhett

[JamesGallo]

Originally Posted by rhettyeakley

James, we are pretty much in agreement. I have no intention to "fry" him. It just looks really bad, and his explanation in the story (if accurate) is kinda disturbing. In the end it will all play out and those that have done wrong will bear the consequences of their actions/decisions so I agree 100% with you that no pitchforks are neded.
-Rhett

Rhett,

But in the story all your hearing is what the writer wrote and that generally in my mind isn't the whole story. Heck it might not even be the whole quote :-)

James G

[tbob]

The way things are going this might be a perfect storm for Mike Baker to regain a foothold for his new GAI company in the grading business. I'll guess we'll just have to see how this plays out.
Even though I have regularly used SGC for my card grading, I have to agree with the posters who state that if this story involved Orlando and PSA (instead of Forman and SGC) there would be a storm of outrage.

[Sean_C]

I seriously doubt that will ever happen. Baker won't give up the dream though, even if the company is toast.

Originally Posted by tbob

The way things are going this might be a perfect storm for Mike Baker to regain a foothold for his new GAI company in the grading business. I'll guess we'll just have to see how this plays out.
Even though I have regularly used SGC for my card grading, I have to agree with the posters who state that if this story involved Orlando and PSA (instead of Forman and SGC) there would be a storm of outrage.

[2dueces]

Seeing all that is going on, is this the hobby we all expected it to be? Is this how we thought collecting cardboard would turn out? A childhood passion tainted with everything that goes on. Really is a shame that a few ruin a great passion for everyone else.

[oldjudge]

Adam--Mastro Auctions didn't lend lots, they loaned money. I think you would lose that case in court.

So far, when discussing Mastro Auctions and Foreman, in my mind at least, there is only one who is clearly wrong--Foreman. Mastro may have done some horrible things, but nothing has been proven. I have more problems with what Legendary has done, based on what has been proven so far, than anything that Mastro Auctions has done.

[Wite3]

Got my usual , "please consign with us email today" from Legendary...aside from the really poor taste in my mouth about their trustworthiness, the email had two different spelling errors...maybe they should use some of their stolen money and pay for a spell check program.

Joshua

[sox1903wschamp]

Originally Posted by rhettyeakley

However, when reading this story for the first time earlier today what WAS surprising to me was he Dave Forman/SGC thing. I literally thought to myself after reading it "Holy crap, this is NOT going to go well for Forman". The Mastro stuff isn't as surprising to me because none of what was in there was "new", most of it had been at least alluded to over the past several months. The SGC/Forman thing is "new" and it is rightfully being scritinized based on the information that we have. I must admit though it doesn't pass the smell test.

I am far from a PSA apologist but if this was Joe Orlando/PSA the pitchforks would already be out. It does seems like a bit of a double standard from many here.

This was the first thing that hit me about Dave Forman and I think I also exclaimed "holy crap" or something close to that. I do not know Dave but I sure know his company. Not ready to boycott them but I would like to see many more facts on this case.