Mastro consignors not paid yet?

Exhibitman · #10 06-28-2009, 09:06 AM

Mastro's silence towards its consignors is inexcusable. Look, we all know that the economy melted down last year and we are all feeling that pinch on one way or another. I have been doing a lot of collections, workouts and modifications for my clients cutting both ways (creditor and debtor). The most important factor in all of these situations is communication. If I do not hear from a debtor I must assume that the debtor has the money and is not paying for some reason. It would not surprise me if some bidders defaulted on Mastro. That does not give Mastro license to default on its consignors, to lie to them, or to ignore their inquiries. What they needed to do at the outset was to come clean with the consignors about those situations.

Now let me tell you my theory: Mastro violated a basic tenet of a consignment (bailment) business--placing its consignors at risk by favoring large bidders with prepayment shipment--and the powers that be over there have been advised (accurately) that if they admit to doing so they will be sued, personally, for intentionally breaching their duties to their consignors. Not disclosing a policy of shipping items without payment is called fraud: concealment of a material fact from a person in order to induce action. And it was a very material omission: would anyone here ever have signed a Mastro consignment agreement if it had stated that they have the right to ship your item to a buyer without receiving payment for it? Of course not, so it remains a dirty little secret. So, they choose to ignore the consignors they feel it is safe to ignore, hope that they can collect on the bad bills, and figure that if they don't guys like us will not bother to sue them.

Again, if it was me, I'd sue Mastro and its chief henchmen immediately and start taking depositions. Then we'd get to the bottom of things--or we'd get a lot of 5th Amendment pleading.

But I'm a professional cynic, so what do I know?