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Aaron M.Jay, you are correct in that language you quoted does NOT allow for Mastro to assign, transfer or otherwise sell their consignments to a third-party.
A good analogy would be in the film business when dealing with distribution agreements between a studio and a producer of a film. These agreements almost uniformly include language that prohibits the distributing studio from transfering the film to a third-party distributor because the producers of the film entered into the distribution agreement for the specific purpose of having that particular studio distribute its film. The idea is that that particular studio is unique and able to afford a degree of value in its services that another studio may not.
Here, an established auction house with particular infrastructure, brand-name, market value, exposure, and history attracts consignors because they feel that Mastro will bring a specific set of service, value, and experience to their lots. If the consignors wanted to go with another auction house with a different sets of strengths and weaknesses, they would have done so, so the choice is unique.
But now, without consignors consent their lots have been "sold" to a brand new third-party auction house that could greatly decrease and/or change the value of their lots and the service experience they receive (the Legendary site is a functional mess raft with technical glitches, and even when operating correctly is a huge step down from the Mastro site, meanwhile, Legendary infrastructure is so poor consignors are unable to get paid or even return phone calls without taking their complaints public and enlisting the help of an independent forum operator, what will hapen with shipping noth in terms of turnaround and quality?, etc.).
Basically, this is not what the consignors signed up for and unquestionably they should have been consulted beforehand and their consent sought by Doug and his revamped crew. If not legally, then as a basic matter of customer service and ethics, so as to establish that Doug and Legendary are getting off on the right foot. Obviously, they didn't because they wanted to keep the consignments and the revenue they may receive rom them, as well as use them as a basis to launch their new company as quickly as possible. Clearly, greed won out.
My bet would be the following: Because the consignment agreements were silent on the issue, Doug's attorneys advised him that he could take the consignments without consignors consent and then deal with legal challenges from unhappy consignors later (return the consignment and withdraw the item from the auction, etc.) banking on the idea that most consignors won't ask for their items to be returned since the auction was already underway and their item listed. What I wonder about is if some consignors are unhappy eith the results after the auction closes, do they sue for breach of contract? Has Doug thought of that?
In any case, that's a question I would love for Leon to pose to Doug -- exactly what were the mechanics in coming to the decision to "buy" these consignments and publish them under his new company name.
Another things I'd like to know is what the purchase price for the assets were, since Doug keeps trumpeting that Legendary "bought" the assets of Mastro. I have a feeling the purchase price was a nominal fee ($1) where Doug basically just transferred these "assets" to his new company in an act either of self-dealing or settlement with the other former Mastro principles, all under advice from his attorney. But again, that's just speculation and I'd love for Leon to speak to Doug and get some of these issues out in the open here on the N54 forum.