Mastro/Legendary Article in Today's NY Daily News

[oldjudge]

Joe--If Dave won cards, then thought he had been shilled, and then decided not to pay for them why did he keep bidding in the first place? If the bidding was getting to an unrealistic level why didn't he question things then and just stop bidding? I guess that it is possible that these were left "up to" bids but, if Dave was suspicious of Mastro Auctions, why would he leave these?
Was Dave intending to pay these debts off through grading services? Did this strategy fall apart when Mastro Auctions went belly up forcing Dave to have to come up with the cash? These are questions I would like answers to. Also, I wonder if you can be completely objective in grading cards for someone that you owe a lot of money to?

[Sean_C]

Just me, but I'm hoping that none of the parties settle, as I'd love to see this one aired out in the public.

[Basilone]

Originally Posted by oldjudge

Was Dave intending to pay these debts off through grading services? Did this strategy fall apart when Mastro Auctions went belly up forcing Dave to have to come up with the cash? These are questions I would like answers to. Also, I wonder if you can be completely objective in grading cards for someone that you owe a lot of money to?

Excellent questions...

[RichardSimon]

Originally Posted by Basilone

Excellent questions...

There are so many excellent questions to ask Mssrs. Mastro and Allen that who would know where to begin? I think our Mr. Lichtman might .

[sportscardtheory]

The glaring omission from this article and from everyone's replies, is the fact that the consignments were sent out before they were paid for. This entire situation is hinged on the fact that Mastro/Legendary sent out consignments without being paid first... otherwise, there is no story whatsoever. The items would be returned or re-auctioned. The fact that they sent out consignments without being paid makes it entirely their fault/problem. Another thing, if the guy from SGC bought items from them, never paid and resold the items he won, how could he not have the funds to pay for his winnings??? And if he didn't sell them, why has he not returned them? That is as shady as it gets and he (and anyone else that did this) should go to prison for theft for not returning the items he never paid for. I guess what I'm saying is, these people should go to jail. This shouldn't be a "you owe me money" situation. This is a "you stole my items" situation.

[Rob D.]

You might want to go back and search the archives regarding REA sending items to high bidders before payments were received. Pay particular attention to the adulation and fawning from Net54 board members over this business practice.

[RichardSimon]

Originally Posted by Rob D.

You might want to go back and search the archives regarding REA sending items to high bidders before payments were received. Pay particular attention to the adulation and fawning from Net54 board members over this business practice.

I have never bid or consigned with either of these auction houses, but I would believe, judging by all that I have read on this board, that REA had the money on hand to pay their consignors.

[RichardSimon]

Originally Posted by sportscardtheory

The glaring omission from this article and from everyone's replies, is the fact that the consignments were sent out before they were paid for. This entire situation is hinged on the fact that Mastro/Legendary sent out consignments without being paid first... otherwise, there is no story whatsoever. The items would be returned or re-auctioned. The fact that they sent out consignments without being paid makes it entirely their fault/problem. Another thing, if the guy from SGC bought items from them, never paid and resold the items he won, how could he not have the funds to pay for his winnings??? And if he didn't sell them, why has he not returned them? That is as shady as it gets and he (and anyone else that did this) should go to prison for theft for not returning the items he never paid for. I guess what I'm saying is, these people should go to jail. This shouldn't be a "you owe me money" situation. This is a "you stole my items" situation.

I was going to bring that up in one of my posts, but was not certain that was the case, but apparently after rereading everything here, it certainly is.
What a way to run a business!! Here take this and pay me when you can, my consignor won't mind,,, I thought Wolffer's was the only one that did something like that to such a degree.

[oldjudge]

Personally, I think people are barking up the wrong tree here. The auction house, by sending out lots to winners before payment is received, is simply making a credit decision that they are willing to trust that bidder. If they are wrong they must suffer the consequences. Credit is extended in all businesses. When you charge something on a credit card the bank is allowing you to take delivery of goods before they are paid for. Our society is built on people getting items before they pay for them. Mastro obviously made some poor credit decisions. REA may send out some items early but, if they are better at assessing the creditworthiness of their customers, they may not be subjecting themselves to any appreciable risk while at the same time generating considerable good will.

[sportscardtheory]

Originally Posted by oldjudge

Personally, I think people are barking up the wrong tree here. The auction house, by sending out lots to winners before payment is received, is simply making a credit decision that they are willing to trust that bidder. If they are wrong they must suffer the consequences. Credit is extended in all businesses. When you charge something on a credit card the bank is allowing you to take delivery of goods before they are paid for. Our society is built on people getting items before they pay for them. Mastro obviously made some poor credit decisions. REA may send out some items early but, if they are better at assessing the creditworthiness of their customers, they may not be subjecting themselves to any appreciable risk while at the same time generating considerable good will.

They are not the ones suffering the consequences.

If they are selling their own product, this would make sense. But this is consignment, the items are not theirs to take such outlandish risks. This has nothing to do with credit.

[Exhibitman]

Originally Posted by oldjudge

Personally, I think people are barking up the wrong tree here. The auction house, by sending out lots to winners before payment is received, is simply making a credit decision that they are willing to trust that bidder. If they are wrong they must suffer the consequences. Credit is extended in all businesses. When you charge something on a credit card the bank is allowing you to take delivery of goods before they are paid for. Our society is built on people getting items before they pay for them. Mastro obviously made some poor credit decisions. REA may send out some items early but, if they are better at assessing the creditworthiness of their customers, they may not be subjecting themselves to any appreciable risk while at the same time generating considerable good will.

An auctioneer can do what it wants with stuff it owns. It cannot do the same with stuff it does not own. Mastro did not own those lots; the consignors did. They furnished them to Mastro under certain contractual terms, none of which included the right to send the items to bidders without payment. One of the actual contract terms stated that unpaid items could be reclaimed 60 days after auction (go check your small print in your consignment contract). If Mastro agreed in its contract that the consignors of unpaid items could ask for their return, then Mastro undertook the duty to hold those items, not send them out in the hope of future payment.

What is being described here is looking more and more like a Ponzi scheme where current sellers' proceeds were used to pay earlier sellers and/or where current sellers' items were used to fund large customers' businesses as no-cash-down inventory.

[tbob]

Originally Posted by oldjudge

Personally, I think people are barking up the wrong tree here. The auction house, by sending out lots to winners before payment is received, is simply making a credit decision that they are willing to trust that bidder. If they are wrong they must suffer the consequences. Credit is extended in all businesses. When you charge something on a credit card the bank is allowing you to take delivery of goods before they are paid for. Our society is built on people getting items before they pay for them. Mastro obviously made some poor credit decisions. REA may send out some items early but, if they are better at assessing the creditworthiness of their customers, they may not be subjecting themselves to any appreciable risk while at the same time generating considerable good will.

Couldn't have said it better. Agree 100%.

[ibuysportsephemera]

That is exactly what I was wondering. What would the big deal have been if the items were not paid for.....simply return the item to the person who consigned the item or re-auction. How crazy is it that the items were sent prior to payment being received...who does such a thing?

[sportscardtheory]

Originally Posted by ibuysportsephemera

That is exactly what I was wondering. What would the big deal have been if the items were not paid for.....simply return the item to the person who consigned the item or re-auction. How crazy is it that the items were sent prior to payment being received...who does such a thing?

And why no legal action demanding the items back or immediate payment? Especially if the items were sold again after the fact. That is theft, and should be dealt with as such.

[Basilone]

.

[bijoem]

Originally Posted by oldjudge

Joe--If Dave won cards, then thought he had been shilled, and then decided not to pay for them why did he keep bidding in the first place? ...

I could be wrong but....
My take from the article is that Dave owes Mastro money.... but Mastro also owes Dave money. Yet... Mastro is asking for the entire money Dave owes them (ignoring the amount they owe to Dave).

Again - if you owed me $100, and I owed you $90.... would you send me the entire $100 and then 'hope' to receive the $90?

Where the shilling comes into play is....
At this point (now that this is a legal matter) why not question whether or not the money owed to Mastro is legitimate? If the items were shilled, should Dave pay the entire amount to Mastro? I think not.


And.... MOST IMPORTANTLY....
Mastro has an obligation to the consignors regardless of any money's owed to them by other people. I cannot operate a business and shaft my suppliers if I get shafted.

IMO -
Opening up "Legendary" and running away from Mastro - is just about as crappy as it gets.... and on top of that.... they must think everyone in the hobby are morons.