Goldin Vault

Peter_Spaeth · #1 07-27-2021, 09:55 PM

Quote:

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?

Exhibitman · #2 07-27-2021, 10:41 PM

Quote:

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 · #3 07-27-2021, 10:44 PM

Quote:

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 · #4 07-27-2021, 11:03 PM

Quote:

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 · #5 07-27-2021, 11:09 PM

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 · #6 07-27-2021, 11:19 PM

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 · #7 07-27-2021, 11:41 PM

Quote:

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.

BobC · #8 07-28-2021, 12:49 AM

Peter and Adam,

A thought just occured to me, and I should have mentioned this before. Wasn't thinking, duh! If due to a bankruptcy there could be a potential seizure of consigned/stored assets at PWCC or Goldin because of them being a consignment seller/auction house, wouldn't the simple fix be to set up their "vaults" as separate legal entities then? Makes perfect sense to keep the cards and items they store separate from what they are selling/auctioning off, and also makes perfect sense for liability protection purposes. Should also help to remove any gray area on whether a card/item is being stored subject to a rental agreement or has been consigned for sale.

Now the question is, did PWCC and Goldin set up these "vault" operations as separate, legal entities from their consignment/auction businesses? I would guess yes on both counts as despite what others may say and think of them, they are both run by savvy and smart business people. I know if either one had been my client, I would have insisted they set up these "vault" operations as separate businesses.

So, does anyone know if PWCC and Goldin set their "vault" operations up as separate business entities?

Fred · #9 02-01-2022, 08:01 AM

If I understand this correctly the purchaser of a card is supposed to pay for the card and then let it sit in a vault instead of taking possession of it? Crap, I guess I'm doing this wrong because for some reason or other I want the pretty piece of card board in my hand after I purchase it.

This almost sounds like you purchase a card, allow the auction company to hold on to it until you feel the time is right to allow the AH to put it up for auction again.

It doesn't matter if the card sells for more or less than the previous auction because the AH collects the 20% buyers premium, again, without any risk of losing $$ on the material that is being auctioned because they don't own it.

This sounds more like a new hobby where you ride the ride and hope you're not left holding the bag at the end of the bubble.

Mark17 · #10 02-01-2022, 08:10 AM

Quote:

Originally Posted by Fred

This almost sounds like you purchase a card, allow the auction company to hold on to it until you feel the time is right to allow the AH to put it up for auction again.

Yes, for people who treat their cards as assets, and think of their transactions as stock trading, that's exactly what it is. You buy a stock (or card,) hold it for some time, and eventually sell it when you think the market is favorable, or when you need the cash.

The vault makes it easy to buy and sell, and saves you shipping costs both ways, not to mention insurance if your stuff is very valuable.

Since I'm a traditional collector the vault isn't for me, but I can see how it might not be a bad concept for some.

BobC · #11 07-27-2021, 10:45 PM

Quote:

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 · #12 07-27-2021, 10:50 PM

Quote:

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 · #13 07-27-2021, 11:03 PM

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 · #14 07-27-2021, 11:30 PM

Quote:

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.

Peter_Spaeth · #15 07-28-2021, 09:15 AM

Quote:

Originally Posted by BobC

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.

I'm not sure you're renting a specific space in one of those vaults, as opposed to just making a bailment to the vault owner to store your cards for you. Until someone corrects my interpretation of the UCC which seems clear on its face I am standing by it in terms of consignment vs. bailment and UCC filing requirements. I do agree safety deposit boxes and storage lockers are in a different category for the reason you are obtaining righs with respect to a specific space, like a lease.

BobC · #16 07-28-2021, 01:29 PM

Quote:

Originally Posted by Peter_Spaeth

I'm not sure you're renting a specific space in one of those vaults, as opposed to just making a bailment to the vault owner to store your cards for you. Until someone corrects my interpretation of the UCC which seems clear on its face I am standing by it in terms of consignment vs. bailment and UCC filing requirements. I do agree safety deposit boxes and storage lockers are in a different category for the reason you are obtaining righs with respect to a specific space, like a lease.

Believe me, I get that this is not a straightforward question with an easy, simple answer. And exactly why I was asking specific, detailed questions such as if a "vault" operator did have separate, sealed boxes or spaces where they stored a person's cards/items, instead of just putting everyone's stuff on the shelves in one big room or warehouse. Was being persistent with the questions to see if there was a particular scenario and set of circumstances from a legal standpoint where a person using a "vault" could be safe from seizure in the case of bankruptcy by the "vault" operator. And yes I know, probably a lot of people reading this stuff are wondering why should we be wasting time talking about something like this because the chances of one of these "vaults" actually going bankrupt is extremely remote. But if one of the "vault" operators is still involved with and potentially under an ongoing FBI investigation, that could possibly change the odds, right?

So in that case, if I was someone on this forum reading this, and also using such a "vault" service to hold my valuable cards/items, I may want to double check with that "vault" service to make sure they were set up and operating in such a specific manner so as to protect my valuable cards/items from such seizures. And if I found out they weren't protected, I may seriously want to look into making protective UCC filings just to be extra safe, or maybe look into doing something else entirely.

Peter_Spaeth · #17 07-28-2021, 01:36 PM

Quote:

Originally Posted by BobC

Believe me, I get that this is not a straightforward question with an easy, simple answer. And exactly why I was asking specific, detailed questions such as if a "vault" operator did have separate, sealed boxes or spaces where they stored a person's cards/items, instead of just putting everyone's stuff on the shelves in one big room or warehouse. Was being persistent with the questions to see if there was a particular scenario and set of circumstances from a legal standpoint where a person using a "vault" could be safe from seizure in the case of bankruptcy by the "vault" operator. And yes I know, probably a lot of people reading this stuff are wondering why should we be wasting time talking about something like this because the chances of one of these "vaults" actually going bankrupt is extremely remote. But if one of the "vault" operators is still involved with and potentially under an ongoing FBI investigation, that could possibly change the odds, right?

So in that case, if I was someone on this forum reading this, and also using such a "vault" service to hold my valuable cards/items, I may want to double check with that "vault" service to make sure they were set up and operating in such a specific manner so as to protect my valuable cards/items from such seizures. And if I found out they weren't protected, I may seriously want to look into making protective UCC filings just to be extra safe, or maybe look into doing something else entirely.

Maybe Adam can shed some light on this question -- suppose your inventory in the vault is changing on a very frequent basis. Assuming a filing is necessary or helpful, and I don't read the UCC that way but let's assume, do you have to make a separate filing every time you add an "asset"? I would imagine you do, that a blanket filing wouldn't really provide notice to anyone.

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