Legendary Auctions. Should I call the police on them about having possible stolen material

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Posted By: Peter_Spaeth

I think most people running auction houses -- which from all appearances continue to do remarkably well across the board -- perceive it as against self-interest to subject themselves to cross-examination in a public forum, particularly this one, WHETHER OR NOT they have anything to hide. What's the incentive? If they have the cards we want, we are going to bid.

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Posted By: Jeff Prizner

I'll be bidding. Stuff trumps all for me. I'm not going to fool myself into thinking that I'm able to 100% accurately determine which auction houses (if any) never do anything wrong. I'll bid with anyone, just will always proceed with caution. In the words of the great Bruce Dorskind - "trust no one" (well... at least to a certain extent).

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Posted By: JimCrandell

Barry,

Not saying they should answer it on Net 54 but it would be nice if they found a place they could address the primary concerns of hobbyists. I am sure you would have no problem answering questions forthrightly over bidding practices, card alteration and related topics. There are major areas of concern to collectors that to my knowledge none of the major dealers except Rob have addressed.

Five to ten years ago I would have bought a graded card from anyone as long as it was graded. Now have a considerable list(as do many collectors I talk to) of dealers I won't buy from based on what I believe to be true.

Jim

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Posted By: barrysloate

It would have been nice if they found some way to respond, but now that I think about it it was unrealistic to expect them to do so. Many were probably told that if they came over here and posted they would be attacked mercilessly.

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Posted By: Peter_Spaeth

Jim, there are people I wouldn't buy from either but it really doesn't do much good as "they" consign tons of material to all the auction houses and you can't really avoid them unless you choose not to deal with anyone -- in my opinion.

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Posted By: Jeff Prizner

agreed Peter, that's the only way to know for sure that you're not dealing with someone who has ever done anything wrong in the hobby -- not collect.

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Posted By: Rob D.

I still remember the day Kit Young, with assistance from Leon, posted on the board. Within 10-15 posts there were attacks regarding transactions from 3-5 years prior. That's not an isolated example. I'd say more often than not when a prominent dealer or a representative from a major auction house -- who's not already a regular poster on the board -- makes an appearance, he is attacked in a pretty short time. I don't blame them at all for staying away.

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Posted By: leon

If I remember correctly that transaction was from 1987. Yes, 1987. That episode still makes me upset. The gentleman (Kit) couldn't even get his foot in the door before he got slammed. I was appalled...He and I have met a few times and he has always been one of the friendliest dealers I know...

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Posted By: Steve

Does it freaking matter when it happened?

The fact of the matter is, it did happen.

Steve

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Posted By: Peter_Spaeth

LOL.

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Posted By: leon

I just went back and read the thread....Yes, it did happen and I am sure, from knowing you more now, that it was probably not handled well. I think that was the main issue. I saw where I offered to make it right financially but that wasn't really what the issue was about....At any rate, as I said in 2007, I think there is a time and place for everything. The first welcoming thread of someone is not really the perfect time to jump down their throat. Others may disagree.....

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Posted By: Rob D.

Like I said, I don't blame them at all for staying away.

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Posted By: Steve

And I said I was sorry at that time.

I even spoke to Kit well after that when his wife passed on.


Steve

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Posted By: G.H. Counter

Aaron, Rob Lifson is not a saint either.

"The most powerful members of our community have a shattering secret..."

Not sure if any of those members is willing to bring the skeletons out of the closet.

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Posted By: Aaron M.

"Aaron- Leon has been a good friend to those of us (myself included) that were unable to get paid from Mastro, despite many attempts to contact them thru a variety of channels. He got swift settlement.
I don't really care who else he's friends with, I'm just glad to count him among one of mine."

Completely agree Anthony. Leon has been very helpful in acting as an intermediary for those having trouble with Mastro.

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Posted By: Aaron M.

Hey, Marty. As others have mentioned, my questions were of the rhetorical variety. I've known Rob for several years and his honesty and responsiveness and business standards have been above reproach. What is particularly interesting to me is how far ahead of the curve he was with many of these troubling auction issues. And with that in mind, I become a bit incredulous when Leon seems to view Rob and REA disfavorably (at least with regard to business practices) yet backs Mastro/Legendary so resolutely. You'd think my questions would be answered in the reverse.

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Posted By: Sean C

Can anyone confirm whether the old Mastro consignment contract allowed for consigned items to be transfered to another auction house? Let's try to keep the pot shots at Mastro / Legendary to a minimum until this central question is answered.

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Posted By: Dan Bretta

Aaron, Leon and Rob have worked out their differences and are amicable. Please don't dredge up stuff that was solved more than a year ago.

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Posted By: Aaron M.

Jim, it's been my experience in my admittedly limited years in relation to some of the more veteran collectors here on N54, that Rob Lifson and his REA have really been the only auction house always willing to answer these questions -- and what Rob does that really sets him apart is that he anticipates these questions and answers them and takes action before they become issues. Other auction houses just don't seem to be able to view a particular issue and know what an ethical response should be. Rob, meanwhile, was instituting policies of transparency and honesty before anyone was really asking him to.

This is what gets me about the current Mastro/Legendary situation and why I find it hard to believe nay real change has occurred.

Only now in the face of a seemingly failed business and criminal investigation has Doug instituted changes to his auction house (no employee bidding, maintaining bidding records, etc.) after years of resistance, whereas Rob has been doing that since the reintroduction of REA back in 2003, right?

Meanwhile, let's give Doug the absolute benefit of the doubt -- that if there were any unethical and/or illegal business practices going on they were part of the former business regime and Doug, Ron Oser and their partner were completely insulated from such activities and Legendary represents a completely fresh start. Great.

But the first thing he does is takes Mastro consignments and sticks them in his new venture's auction without notice or consent from the consignors.

Again, that's just a basic break-down of a threshold question of a person's business and ethical judgment. How can Doug not know that that is wrong?

I mean, if there's a provision in the consignment agreements that allows for unlimited transfer and/or assignment of the contract, I'd be surprised but at least what he did was not illegal in the sense that his actions were a breach of contract. But even if that provisions exists -- it's unethical, and at minimum just bad customer service, and does not treat the consigners (his business pipeline) with the respect and open and responsive communication they deserve.

Mastro is gone. The witch to Legendary even if an obvious attempt to keep that business alive, still lacks the former company's infrastructure and brand name. This is a major change that could effect the service and value offered to consignments. Consignors have no idea how this auction house will be run, what market reaction will be, what kind of prices it will command, and obviously whether their items will be features and promoted as they hoped. This is a major decision and consignors deserved a say in whether they wanted their material included. And yet Doug takes the consignments as if he owns them and had them in a published auction before the consignors even knew what was going on.

I just don't get it. How does Doug not understand this? Why doesn't he get it?

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Posted By: Aaron M.

Are you sure Dan?

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Posted By: Aaron M.

G.H. I am listening and am open-minded. Anyone want to elaborate on poor dealings with Rob, the floor is yours.

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Posted By: Anonymous

Aaron,

As others have pointed out, how certain people are now are not how they have always been. This goes for dealers, grading co people etc. This may keep a lot of the truth under wraps.

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Posted By: Aaron M.

I'm listening.

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Posted By: marty q

aaron- my bad, sorry pal..i got tunnel vision for a moment, i couldnt understand why somebody would jump on rob? because you didnt....again sorry for "my" confusion....now that i read it again it makes sense, and also a stern point that i think you were after.

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Posted By: Larry P.

I guess I agree with Jeff. I will still be bidding in the Legendary auction because they have stuff I want. I'm sure there are a lot of shady dealings in the hobby, as there are in many other aspects of life, but I prefer to withhold judging others until I see stronger evidence. With regard to the original question in the post, I don't see it as Legendary stealing your stuff, but maybe my view is too simplistic.

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Posted By: Aaron M.

Just to be clear, I'm not saying anyone shouldn't bid with Legendary.

Everyone has to determine their own comfort level, and until the FBI's investigation proceeds further, alot of what's out there is speculation. So while I think it would be foolish to consign to them until the results of these next couple auctions are in (and even then I'd be worried that they disappear and/or their "assets" might be seized by the government), but as far as bidding, it's a tough and individual call.

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Posted By: Steve

I'd say more often than not when a prominent dealer or a representative from a major auction house -- who's not already a regular poster on the board -- makes an appearance, he is attacked in a pretty short time. I don't blame them at all for staying away.



Yeah I would think the title of this thread is making them all want to post here.

Brilliant deduction Wolfie.


Steve

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Posted By: Jay

While the version of the Mastro Master Consignment Agreement that I have appears silent on the specific issue of reassignment of auction lots, it does state the following:

(2)...........We will offer the Memorabilia at auction ("Auction") at the venue where we conduct auctions in the ordinary course of business.......

(17) Neither you nor we may ammend this Agreement, unless both of us agree, in writing, to do so.......................

I am no lawyer, but it sure sounds to me like the assignment of a consignment to a new auction house is prohibited without prior written approval by the consignor. It would be good if a lawyer could comment.

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Posted By: Alan

This thread reminds me of the Seinfeld episode where George needs an electrician to keep the Pac Man machine running while they move it. Kramer says he is not a friend of the electrician and doesn't like him, but he is the best electrician around.

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Posted By: Jodi Birkholm

Slippery Pete?

"HOLES! WE NEED HOLES!!!"

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Posted By: Peter_Spaeth

In my view, if there is no express contractual provision for transfer consigned material to another auctioneer, then it would be a breach to do so. I think it would be difficult to argue that the consignor impliedly agreed to the transfer, because for the reasons Aaron articulated the consignor might well prefer to get the item back. That said, do we know for sure that Legendary didn't contact the consignors and get permission?

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Posted By: Jay

Peter--I had nothing on consignment for the auction so I don't know. Possibly someone like JC could comment. Also, if this assignment was a breach of contract, how would the agreeved party establish damages?

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Posted By: Peter_Spaeth

I am speculating that a difficulty for Legendary may be that they simultaneously want to be a brand new company and the close successor to Mastro. A fine line to walk, perhaps.

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Posted By: 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.

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Posted By: Aaron M.

Jay, you could establish damages by siting past examples of previous sales figures for similar items if the item in question fared significantly worse with Legendary. The damages could be the difference in price. Damages could also stem from the stress of having the items essentially misappropriated without consent. It's interesting, but again, I wonder if Doug hasn't already considered this. Maybe he thinks that the damages wouldn't be significant enough for people to actually sue him over. Or maybe he thinks he'll cut deals with unhappy consignors (either discount fees on this auction or offer a break for future auctions) to help ease the pain.

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Posted By: boxingcardman

On the assignment of the consignment agreement. While the agreement itself is silent on the issue, as has been pointed out, it repeatedly uses the term "we" in allocating responsibilities to Mastro. "We" is specifically defined in paragraph 1 as "MastroNet, Inc." As I read things, therefore, MastroNet, Inc. is given the right to sell the item. Not Mastronet, Inc. or its assignee. Now, that said, I don't know IL law; it is possible that IL law allows a contract to be assigned unless it is expressly forbidden by the contract. An IL attorney would have to answer that one.

Regardless of the law, taking consignments to a new company and refusing to give them back to consignors who don't want to do business with the new company is really lousy customer relations. I know that if I ever dealt with an auctioneer who did that, I'd be very unhappy and if I asked for it back and they refused, it would be my last dealings ever with either company.

Sic Gorgiamus Allos Subjectatos Nunc

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Posted By: Aaron M.

Jim Clarke, I'm curious -- what was Doug's explanation for your material ending up in his Legendary auction without your consent or even the existence of a consignment agreement? Have you been paid yet for previous consignments?

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Posted By: CoreyRS.hanus

While the legal issues here are interesting, as a practical matter (except for the most high-ticket items) it seems hard to imagine the damages could ever be great enough to justify the expense and aggravation of a civil action. After all, this is a nationally-distributed auction with a significant website and published catalog with a distribution list that is probably substantially similar to (or even better than) most of their competitors'. Also, I wonder for those contemplating suing WHO DID NOT REQUEST THEIR CONSIGNMENTS BE RETURNED could have any potential damage award be reduced/eliminated for failure to mitigate.

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Posted By: leon

I have no issue with you stating your opinions just like anyone else that is NOT anonymous. I won't allow anonymous posts as is the general rule. A couple quick points though. I don't see me going back and forth with Doug to get your questions answered. I posted his cell phone number on this board so anyone is free to call him. BTW, that phone number, or any phone number, won't be allowed to be posted on this board unless we are absolutely positive it is ok with whomever is having their number posted. Generally speaking we really shouldn't be posting phone numbers on the board. My cell is 214-282-4943.....I never have an issue with someone posting their own #.

I don't think you can go by previous sales to get "todays" market prices. In our collectibles field the prices are too sporadic to know, even within a reasonable amount (imo), where the item will end especially in todays economy. Now, on some more common but expensive items I think your case could be made. A red T206 Cobby with a common back, in ex condition, with no other extraordinary issue will go from approx. $1900-$2300, almost every time (currently).....Too much more or less and it becomes suspect. Most items aren't that expensive, or that common, so it's even more difficult to quote a value. Even the range I quoted is fairly substantial but it's what I see from present sales. The point being is that it would be difficult to compare venues in who gets the most for consignors cards. I tend to agree the Mastro website was a bit more visually appealing but I think the current one is good and very functional. I just now placed about 20 bids and every one was easy with no complications. Flowery write ups are great for reading in the morning (if you know what I mean) but in the end we collect cards and not descriptions. And btw, all descriptions should always be verified, imho....take care

edited typo

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Posted By: barrysloate

Aaron- I have a question:

Even though Legendary is a new auction house, under what circumstances would they get less money for a lot than Mastro? It's the exact same customer base. Besides, if somebody is willing to pay $500 for a lot in a Mastro auction, are they going to limit themselves to only a $400 bid with Legendary?

While I agree that consignors should have been consulted in advance I can't imagine a nickel of difference in the prices realized. If you feel otherwise, please explain.

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Posted By: Aaron M.

"Aaron- I have a question:

Even though Legendary is a new auction house, under what circumstances would they get less money for a lot than Mastro? It's the exact same customer base. Besides, if somebody is willing to pay $500 for a lot in a Mastro auction, are they going to limit themselves to only a $400 bid with Legendary?

While I agree that consignors should have been consulted in advance I can't imagine a nickel of difference in the prices realized. If you feel otherwise, please explain."

Barry, I think there could be issues of trust/confidence in the new venture that could curtail bidding. Given the on-going FBI investigation and the now rather drastic step of essentially folding Mastro as a brand, there could be concern over the legitimacy of the auction. You could say that there were bidders who were on the fence about the whole issue, but now that Mastro has been disbanded, perhaps there was truth to the allegations of card doctoring, shilling etc., and those bidders stay away from Legendary or simply limit the amount they are willing to bid for fear of being shilled or otherwise ripped off.

There could also be fear over whether or not you will actually receive your item once paid with the possibility that Legendary could have their assets frozen or seized by the government at any moment. Again, maybe this causes bidders to stay away entirely or simply limit the amount of their bidding to limit their exposure.

Since the launch of Legendary was rather fly-by-night, and there are reports of unpaid consignors, there could be fear that Legendary will not survive financially as a functioning auction house and will simply take payments and never ship items -- either tied up in a bankruptcy or simple disappearance. Or that Legendary stays in business but will not be able to process and ship items in a timely manner. Again, maybe this causes bidders to stay away entirely or simply limit the amount of their bidding to limit their exposure.

There could also be basic awareness issues in terms of brand recognition of the new auction house from the (I would imagine many) collectors who don't regularly read this board and have the opportunity to learn more about the company and the circumstances of the "switch" like we do, so the change could seem sudden and unexplained. Mastro's brand attracted certain collectors. Will those collectors follow Mastro to Legendary?

I'm not saying it will happen, just that it could weigh into the decision-making process and deter bidding.

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Posted By: barrysloate

Aaron- those are fair points but in the end I doubt there will be any perceptible difference in prices realized. If there is a cloud over the new Legendary brand then the same cloud hung over Mastro, so the issue would not be the transfer of lots from one to the other.

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Posted By: Dan Bretta

In the end it's about the "need to have" which afflicts a strong majority of us. I doubt Legendary is affected one way or another.

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Posted By: Peter_Spaeth

I agree with those who have opined they would be very speculative and difficult to prove. Nonetheless, IF the contract does not allow transfer of consigned material without consent, and IF in fact Legedndary did not obtain consent, it does raise at least an ethical question.

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Posted By: Sean C

Only in this hobby can:

- an auction house be the subject of an FBI investigation and still receive consignments
- have said auction house fail to pay consignors in a timely manner, pay consignors with checks from an account that had insufficient funds, then blame the private equity fund that owned the auction house for the problem
- have the auction house close, only to reopen the next day under a new name and assuming the assets of the old company
- have the new auction house fail to properly communicate with both their customers and consignors of the old auction house
- have the new auction house fail to timely pay the consignors for the old auction house's last auction, essentially giving the new auction house an interest free loan
- have the new auction house run an auction with the items that had been consigned to the old auction house without contacting the owners of the items, helping to establish the identity of the "new" auction house on the backs of others.

and yet still have people in the hobby support the auction house and those running it. I'm sorry, but I'm not a big fan of people and companies that use their customers in such a manner.

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Posted By: JDRUM

Sean,
That's why they call it an addiction.

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Posted By: Wesley

Hi Peter S,

Long time no chat. Mastro sent out an email advising current Mastro consignors that their consignments will be auctioned in Legendary's April auction. If upon receipt of this email, consignors do not raise objection, then have the consignors implicitly consented to the assignment?

I don't know the answer to that question, but that is not my situation. I did, in fact, raise objection to the assignment of my consignments, and I asked that Mastro return my cards to me. Doug Allen refused and told me that he is not allowing anyone to pull their consignments. My lots are only a few thousand dollars, so it is not worth the effort to sue Mastro/Legendary, but if more money were at stake, I certainly would consider it.

I have been a very good customer for the past decade and can't believe the way they handled this situation.

Wesley

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Posted By: Sean C

If I were in your situation, then I would be contacting the local police dept. or possibly the FBI (since they are already investigating what was Mastro), if nothing else for the principal of it.

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Posted By: Peter_Spaeth

I think that would suffice for implied consent. That said, it appears to have been a cynical gesture as objections (yours, at least) appear to have been wilfully ignored. An interesting way to start a "new" business.

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Posted By: Peter_Spaeth

Did Doug give an explanation to you?