Goldin Vault

[Schlesinj]

Just saw Goldin is offering a vault service with digital photo and instant access to selling if that is something you are interested in doing.

[Republicaninmass]

All in lovely Delaware!


16 1986 fleer Jordans in one auction. What a disservice to consignors. I remember auction houses refusing items they had copies of, now anything goes.


Good luck to them and the Red Sox

[Johnny630]

Come On Man !

[mrreality68]

Just got an email on the Goldin Vault. Need to research it to see what the pro's and con's are.
The only other I am aware of is PWCC on Ebay and have reservations about them

[Johnny630]

IMO I Avoid.

I don’t like having my cards tied up in someone else’s hands, ie Auction House it seems like these AH’s are trying to be a brokerage account that’s not something I’m comfortable with my cards being tied up in. Each major auction house wants to ensure that you only use them this is a way for them to have leverage over the competition. They don’t want you thinking we’ll try this one try that one no we want you here. Plus I don’t flip-flop in and out of my cards like I'm at a trading desk. That's all I see with these vault type situations list relist list relist in and out. Nah I'll pass

[mrreality68]

Originally Posted by Johnny630

IMO I Avoid.

I don’t like having my cards tied up in someone else’s hands, ie Auction House it seems like these AH’s are trying to be a brokerage account that’s not something I’m comfortable with my cards being tied up in. Each major auction house wants to ensure that you only use them this is a way for them to have leverage over the competition. They don’t want you thinking we’ll try this one try that one no we want you here. Plus I don’t flip-flop in and out of my cards like I'm at a trading desk. That's all I see with these vault type situations list relist list relist in and out. Nah I'll pass

Very good points. Thanks
For the most part I rarely flip cards unless I can upgrade or get a key card I really want.

With that being said it never hurts to do my research to see the pro’s and con’s as it may work for myself or others.

[Exhibitman]

The vault idea is a manifestation (metastasis?) of the investment mindset. Why own a card if all you have is a scan of it? I am not crazy about the fact that my good cards are in a bank or even that I have to play with them in plastic holders. Not having them at all...might as well buy f***ing Tesla stock instead.

[Qcards]

I think the vault idea is a valid selling option and I have considered using it but my major concern is that there is some type of lawsuit filed against the vault owner and that the assets would be frozen during a legal tie up or worse, the company claims bankruptcy and assets (cards) are frozen.

Any opinion on how valid these concerns are?

[Jay Wolt]

Some buyers like to avoid sales tax & I'm sure if you win a lot at Goldin, there will be no shipping fees if you place it in their vault.
That's how PWCC does it.

Me, I like to have my purchases sent to me & I open them like Xmas gifts.
Wouldn't want to take that away.

[Snapolit1]

Originally Posted by Exhibitman

The vault idea is a manifestation (metastasis?) of the investment mindset. Why own a card if all you have is a scan of it? I am not crazy about the fact that my good cards are in a bank or even that I have to play with them in plastic holders. Not having them at all...might as well buy f***ing Tesla stock instead.

Well I guess with one of these new outfits you could buy a 1/5,000th share of a sweet card is a plastic holder held by someone else. Imagine what a gas that would be!

[bnorth]

Originally Posted by Jay Wolt

Some buyers like to avoid sales tax & I'm sure if you win a lot at Goldin, there will be no shipping fees if you place it in their vault.
That's how PWCC does it.

Me, I like to have my purchases sent to me & I open them like Xmas gifts.
Wouldn't want to take that away.

+1 Bought an insanely rare card of my favorite player from a fellow member recently. I was expecting it to arrive while I was away. I had just finished loading my travel trailer to go camping for the week. My mail lady showed up early with the card so it was like Christmas here 2 Mondays ago.

[Johnny630]

Originally Posted by Jay Wolt

Some buyers like to avoid sales tax & I'm sure if you win a lot at Goldin, there will be no shipping fees if you place it in their vault.
That's how PWCC does it.

Me, I like to have my purchases sent to me & I open them like Xmas gifts.
Wouldn't want to take that away.

Yeah but when you get that check back from the Sale you have to claim it as income. So short term sales tax sure long term your still gonna have to pay. I’ll keep my cards safe and sound with me :-).

[Peter_Spaeth]

It looks like there is some competition going on between Goldin and PWCC. PWCC went after Goldin with its high end auction, and Goldin is going after PWCC with a rival vault. Competition is good, no?

[Peter_Spaeth]

Originally Posted by Qcards

I think the vault idea is a valid selling option and I have considered using it but my major concern is that there is some type of lawsuit filed against the vault owner and that the assets would be frozen during a legal tie up or worse, the company claims bankruptcy and assets (cards) are frozen.

Any opinion on how valid these concerns are?

Consider this very superficial and don't rely on it, but if I understand the vault concept the cards would not be Goldin's assets, the buyer would still own them and they wouldn't be subject to any action by Goldin's creditors. It's a "bailment" or something similar. But that would all be specified in the agreement.

Your basic Wikipedia definition:
Bailment is a legal relationship in common law, where the owner transfers physical possession of personal property ("chattel") for a time, but retains ownership. The owner who surrenders custody to a property is called the "bailor" and the individual who accepts the property is called a "bailee".[1] The bailee is the person who possesses the personal property in trust for the owner for a set time and for a precise reason and who delivers the property back to the owner when he or she has accomplished the purpose that was initially intended.

[chriskim]

After I won a Wagner from Goldin auction and asked them to store it in their vault (no sales tax right there!). After a wk, I want Goldin to ship the card back to me, do I need to pay sales tax?

[Johnny630]

Originally Posted by chriskim

After I won a Wagner from Goldin auction and asked them to store it in their vault (no sales tax right there!). After a wk, I want Goldin to ship the card back to me, do I need to pay sales tax?

I'm sure having your card in their vault is going to have stipulations and rules... possible early exit fees as well. I have no idea other then the Vault isn't just to benefit you, trust me they are doing it for a reason.

[Peter_Spaeth]

Originally Posted by chriskim

After I won a Wagner from Goldin auction and asked them to store it in their vault (no sales tax right there!). After a wk, I want Goldin to ship the card back to me, do I need to pay sales tax?

If you live in a state with sales/use tax, you most likely owe it, yes. The difference is it is now up to you to pay it/report it.

[morris_14226]

Yes you will need to pay sales tax. My guess would be they would charge the sales tax when they ship it to you.

If you buy high end cards (like a Wagner) you’re an idiot for trying to doge sales tax. States are just salivating to catch those folks. It’s low hanging fruit for them and you have zero defense (like gee I didn’t know I had to pay sales tax on the purchase).

The only way to avoid would be all cash and you’d have to keep the cash out of the banking system, so for a Wagner, you’d have to have like $200 grand in cash on hand. Once you put it someplace (bank) or sell itbe card and put the $ somewhere the governments (state and federal) are going to come asking how you came about $200 grand with no trace.


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[Peter_Spaeth]

Originally Posted by morris_14226

Yes you will need to pay sales tax. My guess would be they would charge the sales tax when they ship it to you.

If you buy high end cards (like a Wagner) you’re an idiot for trying to doge sales tax. States are just salivating to catch those folks. It’s low hanging fruit for them and you have zero defense (like gee I didn’t know I had to pay sales tax on the purchase).

The only way to avoid would be all cash and you’d have to keep the cash out of the banking system, so for a Wagner, you’d have to have like $200 grand in cash on hand. Once you put it someplace (bank) or sell itbe card and put the $ somewhere the governments (state and federal) are going to come asking how you came about $200 grand with no trace.


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My guess is that once the card has been shipped to the vault, sales/use tax becomes the owner's responsibility. That's probably why people do this, so it isn't automatically collected.

[buymycards]

I must be missing something. Even if it goes to the vault, you purchased it, you own it, why would the location of the card matter? It seems like you will owe the sales tax whether it is stored under your mattress or whether it is stored in Goldin's vault.

[Peter_Spaeth]

Originally Posted by buymycards

I must be missing something. Even if it goes to the vault, you purchased it, you own it, why would the location of the card matter? It seems like you will owe the sales tax whether it is stored under your mattress or whether it is stored in Goldin's vault.

If you win something from Goldin and he ships to a state without sales tax, he doesn't have to collect the tax for the state at the time of sale. So, as I understand how this works, it then shifts responsibility to the buyer, and of course buyers just don't pay sales tax on internet transactions all the time, unless the seller collects it from them.

[morris_14226]

It’s dependent on were Goldin ships the card. If they ship it to a state without state sales tax, (Texas say) they don’t have to collect state sales tax. If they do ship to a state with sales tax (NY say) they have to collect sales tax. My guess is Goldin’s physical vault is in a state with zero sales tax so when they ship it there they don’t collect sales tax. So when a vault holder sells the card, he just pays tax once on the proceeds of the sale.

You could do the same thing and get an address in a no tax state(Texas) and have the card shipped there.

Again-the issue is how you account for the cash on the sale. In NYS, they specifically ask you if you’ve earned any money outside the state. If you did-you have to claim it.


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[Peter_Spaeth]

Originally Posted by morris_14226

It’s dependent on were Goldin ships the card. If they ship it to a state without state sales tax, (Texas say) they don’t have to collect state sales tax. If they do ship to a state with sales tax (NY say) they have to collect sales tax. My guess is Goldin’s physical vault is in a state with zero sales tax so when they ship it there they don’t collect sales tax. So when a vault holder sells the card, he just pays tax once on the proceeds of the sale.

You could do the same thing and get an address in a no tax state(Texas) and have the card shipped there.

Again-the issue is how you account for the cash on the sale. In NYS, they specifically ask you if you’ve earned any money outside the state. If you did-you have to claim it.


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Yes it's in Delaware.

[Tabe]

When PWCC came out with their vault, didn't a few folks say something along the lines of "if you leave the card in the vault long enough sales tax no longer applies"? Something like that?

[mrreality68]

Originally Posted by Peter_Spaeth

Yes it's in Delaware.

Very interesting and lots to think on.
I do not believe it is for me but good to know what is out there
Appreciate everyones feedback

Thanks

[Peter_Spaeth]

Originally Posted by mrreality68

Very interesting and lots to think on.
I do not believe it is for me but good to know what is out there
Appreciate everyones feedback

Thanks

IMO, if your intent is to let Goldin sell the card and you intend never to take possession of it, it makes some sense. If your intent is to avoid paying sales tax, not so good, although I should emphasize that I don't think Goldin is doing anything unlawful and nonpayment would be an issue only for the buyer.

[D. Bergin]

It's similar to a non-resident parking a boat in a state with no property tax. Sometimes the tax authorities will catch up to you..........and sometimes they won't.

[chriskim]

Originally Posted by Peter_Spaeth

If you win something from Goldin and he ships to a state without sales tax, he doesn't have to collect the tax for the state at the time of sale. So, as I understand how this works, it then shifts responsibility to the buyer, and of course buyers just don't pay sales tax on internet transactions all the time, unless the seller collects it from them.

I always wonder whether auction houses really file those sales tax that they collected from buyers to IRS "completely"..... or they just end up become "jerked up" buyer's premium.

[Peter_Spaeth]

Originally Posted by chriskim

I always wonder whether auction houses really file those sales tax that they collected from buyers to IRS "completely"..... or they just end up become "jerked up" buyer's premium.

It's individual states not the IRS, right? Sales tax is not federal. But I am sure they comply with the law, would be really stupid to take that risk.

[buymycards]

Originally Posted by Peter_Spaeth

If you win something from Goldin and he ships to a state without sales tax, he doesn't have to collect the tax for the state at the time of sale. So, as I understand how this works, it then shifts responsibility to the buyer, and of course buyers just don't pay sales tax on internet transactions all the time, unless the seller collects it from them.

Thank you for clarifying that. I have the feeling that some states will catch on to that scenario and modify their rules. It seems like if I live in Wisconsin, if I purchase an item, I owe the tax and it doesn't matter where the item is shipped to.

[Peter_Spaeth]

Originally Posted by buymycards

Thank you for clarifying that. I have the feeling that some states will catch on to that scenario and modify their rules. It seems like if I live in Wisconsin, if I purchase an item, I owe the tax and it doesn't matter where the item is shipped to.

That would be my belief.

[morris_14226]

My understanding would be that Goldin is responsible for collecting the appropriate state sales tax. They are the ones who pay each state. So for every shipment to say NY, they need a corresponding entry that shows the sales tax was collected and then the entry that it was paid to the appropriate state for the correct amount.

As to statue of limitations on tax fraud-that I’m not sure. Remember however when you are caught, you pay the fine plus the correct tax amount plus interest. That interest can really pile up over time.


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[Johnny630]

I can't see how this is geared towards collecting. It's geared towards investing, like I said earlier it's a brokerage account. You still have to pay taxes on the profit of your card when they send you a check. This doesn't seem like much fun to me, hell like one poster said above I might as well just buy Tesla Stock, lol.

What's Next are they going to have a Sports Card ETF or Mutual Fund? Good Grief lol.

I want the card in my collection as a long time piece to enjoy, In the long run that's what makes me smile, not so much the profit.

[mrreality68]

Originally Posted by Johnny630

I can't see how this is geared towards collecting. It's geared towards investing, like I said earlier it's a brokerage account. You still have to pay taxes on the profit of your card when they send you a check. This doesn't seem like much fun to me, hell like one poster said above I might as well just buy Tesla Stock, lol.

What's Next are they going to have a Sports Card ETF or Mutual Fun? Good Grief lol.

I want the card in my collection as a long time piece to enjoy, In the long run that's what makes me smile, not so much the profit.

Agreed This is not right for me. I am more a collector with some flips for other cards or upgrades.
But for those that want to do it as an investment. It is an option for them and it must work for some people since PWCC does it and now Goldin is getting into the game.

[Exhibitman]

On the asset seizure question, in order to keep your items separate from Goldin's you would need to file a UCC1 financing statement with Delaware. This is true of anything you consign or deliver to anyone. If the UCC1 is filed it puts the world on notice that the items are yours. If not, the seizing party is entitled to lump them in with the assets of the holder.

[BobC]

Originally Posted by Exhibitman

On the asset seizure question, in order to keep your items separate from Goldin's you would need to file a UCC1 financing statement with Delaware. This is true of anything you consign or deliver to anyone. If the UCC1 is filed it puts the world on notice that the items are yours. If not, the seizing party is entitled to lump them in with the assets of the holder.

Hey Adam,

I believe you are more on the legal side, whereas I am from the accounting side of things. I haven't really looked into it, but I kind of thought the original concept PWCC started with their "vault" in Oregon, and that Goldin now seems to be following with their "vault" in Delaware, was based on the fact that neither of those states had a sales tax. For anything bought online or through the mail, the seller would collect sales tax, if applicable, based on the mailing/shipping address where the buyer was receiving the item(s) purchased. So if a buyer decided to use either the PWCC or Goldin "vault", they could simply have their purchases shipped there and no sales tax would be supposedly charged. My understanding was that a purchaser didn't have to actually buy/acquire their item(s) through PWCC or Goldin to avail themselves of the respective "vaults" either, and therefore get around the sales tax, or so I thought. Someone setting up a "vault" with either PWCC or Goldin could for example win something off Ebay, and list their delivery address as either in Oregon or Delaware, depending on which "vault" service they used. Also, if I remember correctly, isn't there supposed to be some fee or rent being charged by PWCC and Goldin for the use of the "vaults" as well? If my assumptions and thinking are correct, doesn't that mean that someone using the "vault" at either location is therefore technically renting/leasing space for their items being stored there, somewhat similar to a safe deposit box at a bank, or a space/unit at a storage rental operation? And if that is true, doesn't that not give the owner of the item(s) in their respective "vault" some additional protection from claims by outside creditors should the bank or rental storage business fail? In other words, if you rent storage space from someone and keep an item in it, as opposed to consigning that same item to someone to sell/auction off for you, isn't the item you stored protected from being grabbed by an outside creditor of your landlord/lessor, as opposed to an item you consigned to someone being grabbed by an outside creditor of your consignee?

I've never heard of a single instance where someone who rented a safe deposit box or storage unit had to go to court or file a protective UCC claim to keep outside creditors of a bank or storage rental company away from items they legally own. Am I wrong about that?

Now if what I was previously saying is accurate, wouldn't a person who had an item(s) stored in either of these "vaults" that suddenly decided they wanted to sell something, and they contacted whomever controlled the "vault" it was stored in, PWCC or Goldin, and authorized them through a formal consignmment agreement to now sell that item for them, wouldn't that be tantamount to technically the same thing as that person going to their safe deposit box to remove an item and then giving it to some auction house on consignment to sell for them, thereby putting the item being consigned now at risk of seizure by a third party creditor of the auction house/consignee?

If there is such a difference between an item being stored or consigned, I would hope for the sake of people using these "vaults" that PWCC and Goldin have everything fully and properly documented so there is no doubt as to whether an item is being stored for an owner, or on consignment from an owner, and there is no doubt as to which is which. I would even be curious to find out if these "vaults" were physically separate from where they stored consignments and other items being handled by PWCC and Goldin, so as to further prove and validate the status of items in the "vaults".

Obviously such rules and laws vary state by state, but I would think these would be somewhat similar in Oregon and Delaware, the two states directly involved in these questions.

[BobC]

Originally Posted by buymycards

Thank you for clarifying that. I have the feeling that some states will catch on to that scenario and modify their rules. It seems like if I live in Wisconsin, if I purchase an item, I owe the tax and it doesn't matter where the item is shipped to.

Not necessarily. Especially if you are talking about someone who is into buying/investing as opposed to simply collecting. Businesses can have a main office that receives and pays everything out of one location, yet they can have offices and other locations all around the country. The sales tax paid on items purchased by the business is based on where an item is ultimately shipped to and used/kept, not where the main office is or the bills are paid from. If a person is using one of these companies, PWCC or Goldin, to also later on act as their consignor and eventually start selling some of these things for them, you could easily argue the items are collected and stored in the "vaults" for their protection (like a safe deposit box), and for later ease of handling and operation of their sale through PWCC or Goldin, and justify why you did not keep them in a state you lived in. As long as proper records are kept and there is evidence to show items are physically being kept in a state with no sales tax, I'm thinking you have a valid argument. (And also, if you truly are a dealer and the purchases represent inventory, you would technically be exempt from paying sales tax on your purchases as long as you had the proper license(s) and filed the proper resale exemption certificate(s) with the seller(s)).

Lots of people have assets and property in multiple states, and the state their main residence is in does not automatically take precedence over other states you may have assets or property in.

Now as far as having something sent to a state with no sales tax, and then suddenly bringing it back to that state where you now live that does have a sales tax later on, not so sure you would automatically owe sales tax to the state you live in. Say you live in Wisconsin, and also have a vacation home in Delaware. You go to local stores in Delaware and buy all your furnishings and stuff for the vacation property free of sales tax. You also go to a Delaware card or antique shop and find and buy a bunch of N172 Old Judge cards, with again no sales tax since purchased in Delaware, and have them framed and displayed in your vacation home as well. And then the following year, for whatever reason, you sell the Delaware vacation home and move pretty much everything, including the Old Judge cards, back to your main home in Wisconsin. Are you telling me you would now have to pay Wisconsin sales tax on all that stuff you brought back from Delaware, including the OJ cards? What about if you moved items from a former place where you paid a 4% sales tax on everything to a new state/location where you're now subject to an 8% sales tax, do you now owe the additional 4% sales tax difference to the new state/location you brought the items to?

Now if you instead would buy and have cards shipped to one of the PWCC or Goldin "vaults", and then wait say six weeks or so after you had something delivered there before telling whoever (PWCC or Goldin) was holding them for you to now send those cards to you at your Wisconsin home, and you kept doing it with every card you purchased and initially had sent to your "vault", now I can definitely see a potential problem if Wisconsin ever figured out what you were doing. So there may be a big gray area in there.

[Peter_Spaeth]

Originally Posted by Exhibitman

On the asset seizure question, in order to keep your items separate from Goldin's you would need to file a UCC1 financing statement with Delaware. This is true of anything you consign or deliver to anyone. If the UCC1 is filed it puts the world on notice that the items are yours. If not, the seizing party is entitled to lump them in with the assets of the holder.

Why is simply shipping your cards to the vault a consignment that implicates UCC filing requirements? At least if you haven't instructed Goldin to sell them? And even if Goldin was so instructed, the UCC says it still isn't a consignment because Goldin is an auctioneer and is known to be selling the goods of others.

"UCC Section 9-
102(a)(20) defines a consignment as a
transaction in which a person delivers
goods to a merchant for purposes of sale,
and (a) the merchant deals in goods of that
kind under a name other than the name of
the person making delivery, is not an auctioneer
and is not generally known by its
creditors to be substantially engaged in
selling the goods of others"

In any case, while it is not my area, it seems to me at least some transactions in which the cards are shipped to Goldin would be more like a bailment in which there is no need to file a UCC-1.

"A bailment is a delivery of goods by the
owner, the bailor, to another party, the
bailee, for some express purpose. After fulfilling
this purpose, the bailee is obligated
to return the goods to the bailor or dispose
of the goods according to the bailor’s
instructions. As such, a bailment is an
entrustment under UCC Article 2-403(3).
The bailor has a right to the goods with
priority over the bailee in possession of the
goods and creditors of the bailee with a
security interest or lien in such goods. A
bailment is not a sale or consignment, and
is therefore not subject to the Article 9
UCC filling requirements and other rules."

I could be completely wrong but I'm not seeing the need to file a UCC-1 to keep those cards from Goldin's creditors?

[BobC]

Originally Posted by Johnny630

I can't see how this is geared towards collecting. It's geared towards investing, like I said earlier it's a brokerage account. You still have to pay taxes on the profit of your card when they send you a check. This doesn't seem like much fun to me, hell like one poster said above I might as well just buy Tesla Stock, lol.

What's Next are they going to have a Sports Card ETF or Mutual Fund? Good Grief lol.

I want the card in my collection as a long time piece to enjoy, In the long run that's what makes me smile, not so much the profit.

Not necessarily geared for investors either. Maybe more for for flippers or dealers who can simply have their purchases sent to one of these "vaults", and then just tell them when to put things up for sale/auction. The idea of investing has the potential for holding on to things for quite a while in many cases.

I wonder if the two "vault" operators aren't also assuming a lot of people will use their services to simply get around paying sales taxes on their purchases, and then hope that since these individuals are so cost conscious that instead of asking for their items back at some point to maybe send out to a different seller/AH, they can save on the shipping costs and fuss and risks in handling and just have either PWCC or Goldin handle the subsequent sales/auctions for them. Basically these "vaults" could end up being built-in pipelines for additional consignments to both PWCC and Goldin.

[Casey2296]

Originally Posted by BobC

Y

Not necessarily geared for investors either. Maybe more for for flippers or dealers who can simply have their purchases sent to one of these "vaults", and then just tell them when to put things up for sale/auction. The idea of investing has the potential for holding on to things for quite a while in many cases.

I wonder if the two "vault" operators aren't also assuming a lot of people will use their services to simply get around paying sales taxes on their purchases, and then hope that since these individuals are so cost conscious that instead of asking for their items back at some point to maybe send out to a different seller/AH, they can save on the shipping costs and fuss and risks in handling and just have either PWCC or Goldin handle the subsequent sales/auctions for them. Basically these "vaults" could end up being built-in pipelines for additional consignments to both PWCC and Goldin.

That's 100% the business model, sales tax is not due until it is determined which state it's going to, same reason you see dozens of buy it now options immediately after a Heritage auction.

[Exhibitman]

Originally Posted by Peter_Spaeth

Why is simply shipping your cards to the vault a consignment that implicates UCC filing requirements? At least if you haven't instructed Goldin to sell them? And even if Goldin was so instructed, the UCC says it still isn't a consignment because Goldin is an auctioneer and is known to be selling the goods of others.

"UCC Section 9-
102(a)(20) defines a consignment as a
transaction in which a person delivers
goods to a merchant for purposes of sale,
and (a) the merchant deals in goods of that
kind under a name other than the name of
the person making delivery, is not an auctioneer
and is not generally known by its
creditors to be substantially engaged in
selling the goods of others"

In any case, while it is not my area, it seems to me at least some transactions in which the cards are shipped to Goldin would be more like a bailment in which there is no need to file a UCC-1.

"A bailment is a delivery of goods by the
owner, the bailor, to another party, the
bailee, for some express purpose. After fulfilling
this purpose, the bailee is obligated
to return the goods to the bailor or dispose
of the goods according to the bailor’s
instructions. As such, a bailment is an
entrustment under UCC Article 2-403(3).
The bailor has a right to the goods with
priority over the bailee in possession of the
goods and creditors of the bailee with a
security interest or lien in such goods. A
bailment is not a sale or consignment, and
is therefore not subject to the Article 9
UCC filling requirements and other rules."

I could be completely wrong but I'm not seeing the need to file a UCC-1 to keep those cards from Goldin's creditors?

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

[Peter_Spaeth]

Originally Posted by Exhibitman

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

Was Mastro different because the items on the premises truly were consigned to him irrevocably for purposes of sale, whereas that might not be true of the Goldin vault?

[BobC]

Originally Posted by Peter_Spaeth

Why is simply shipping your cards to the vault a consignment that implicates UCC filing requirements? At least if you haven't instructed Goldin to sell them? And even if Goldin was so instructed, the UCC says it still isn't a consignment because Goldin is an auctioneer and is known to be selling the goods of others.

"UCC Section 9-
102(a)(20) defines a consignment as a
transaction in which a person delivers
goods to a merchant for purposes of sale,
and (a) the merchant deals in goods of that
kind under a name other than the name of
the person making delivery, is not an auctioneer
and is not generally known by its
creditors to be substantially engaged in
selling the goods of others"

In any case, while it is not my area, it seems to me at least some transactions in which the cards are shipped to Goldin would be more like a bailment in which there is no need to file a UCC-1.

"A bailment is a delivery of goods by the
owner, the bailor, to another party, the
bailee, for some express purpose. After fulfilling
this purpose, the bailee is obligated
to return the goods to the bailor or dispose
of the goods according to the bailor’s
instructions. As such, a bailment is an
entrustment under UCC Article 2-403(3).
The bailor has a right to the goods with
priority over the bailee in possession of the
goods and creditors of the bailee with a
security interest or lien in such goods. A
bailment is not a sale or consignment, and
is therefore not subject to the Article 9
UCC filling requirements and other rules."

I could be completely wrong but I'm not seeing the need to file a UCC-1 to keep those cards from Goldin's creditors?

Hey Peter,

Was basically asking Adam the same thing in Post #36, without your excellent, specific references. I went a little further to also get his thinking on what happens when someone then does ask for something to be taken from the "vault" and put up for consignment. I think you'd want the people running the "vaults" to have their paperwork and records in order, including physically separating what is in the "vault" from what is consigned, and documenting the hell out of it so there is no question as to the status of anything these "vault" operators hold. What do you think?

[Peter_Spaeth]

Originally Posted by BobC

Hey Peter,

Was basically asking Adam the same thing in Post #36, without your excellent, specific references. I went a little further to also get his thinking on what happens when someone then does ask for something to be taken from the "vault" and put up for consignment. I think you'd want the people running the "vaults" to have their paperwork and records in order, including physically separating what is in the "vault" from what is consigned, and documenting the hell out of it so there is no question as to the status of anything these "vault" operators hold. What do you think?

I'm interested in Adam's response to my suggestion how Mastro might have been a different legal situation. A bunch of irrevocable consignments versus items more in the nature of bailments. Let's see what Adam thinks.

[Peter_Spaeth]

https://www.lowenstein.com/files/pub...nov%202006.pdf

This suggests to me on a relatively quick read that a bailment is not part of the bankruptcy estate subject to the estate's creditors' rights.

[BobC]

Originally Posted by Exhibitman

Yes, you are completely wrong. One of the hard lessons from the Mastro-Legendary fiasco was that when an AH goes into bankruptcy any assets on its premises are deemed part of the bankruptcy estate unless there is a perfected security interest in the items, aka a UCC-1, filed in the state where the items are located. You as the consignor become another unsecured creditor with a claim against the AH for the value of your stuff, aka the lowest form of life in the bankruptcy food chain. If you file the UCC-1, which is cheap and easy to do online, then the world is on notice that those items are yours, not the holder's and if there is a seizure or bankruptcy, you won't have to fight a nasty case to retrieve them from the seizing authority or stand in line with the other unsecured scumbags.

Adam,

So does that mean that if a bank files for bankruptcy that everything in the safe deposit boxes they rent out to customers can just be taken by the court/creditors unless everyone has filed a UCC statement? That does not seem possible. But if it is, the same would be true for a storage locker rental place, and everything people stored there could be taken as well? So now I have to ask, what about an apartment building or even just a double, the property owner goes bankrupt and all the renter's personal property, belongings, and assets they have in their apartments can be taken by the courts/creditors??? If that is actually true, that is pure insanity!

[Peter_Spaeth]

Subject again to the caveat that this is not my area, the safe deposit box and storage locker seem like bailments where one tenders possession of goods to someone else for a specific purpose, and need not file a UCC to protect oneself against the bailee's creditors.

[Peter_Spaeth]

To take it further, unless the contract says it's a consignment, if I ship my cards to Goldin to store for me subject to my later decision what to do with them (including send them on to me), that feels like a bailment not a consignment.

[BobC]

Originally Posted by Peter_Spaeth

I'm interested in Adam's response to my suggestion how Mastro might have been a different legal situation. A bunch of irrevocable consignments versus items more in the nature of bailments. Let's see what Adam thinks.

Peter,

That's what I was alluding to in regards to something being held in one of these "vaults", where you are technically renting space to keep something of yours in, versus just sending or consigning something to a third party to do something with on your behalf. I was aware of the Mastro-Legendary situation, but didn't think this could also apply to items legally being stored in rented spaces at PWCC or Goldin. I'd addressed an earlier post to Adam also, but he only responded to you. Probably has me on ignore. LOL

Very curious now to see what he comes back to you with because I additonally asked if this has implications then for bank safe deposit boxes, or even people's apartments.

[BobC]

Originally Posted by Peter_Spaeth

Subject again to the caveat that this is not my area, the safe deposit box and storage locker seem like bailments where one tenders possession of goods to someone else for a specific purpose, and need not file a UCC to protect oneself against the bailee's creditors.

That was what I always thought and seemed to remember. Was CFO/Controller of a commercial real estate development company for about 15-16 years, and read and saw more leases and talked with more attorneys than you can imagine. Never heard of anything like this possibility in regards to leases and rental rights and so on.

To assure the correct treatment and classification as bailments, I think you would definitely want to at a minimum have a properly signed and current lease/rental agreement, and to make sure to keep up on the payments and not ever let it get in arrears.