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#51
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You have looked at a lot more bankruptcies than I have and defer to your expertise. I do have a thought. For purposes of this Marx was an agent. They took payment to deliver a service. As part of that service they acted as an intermediary between two parties, taking possession of an asset to deliver to one party and do the reverse at a later time. Taking possession was not taking ownership which is completely different. Thus if the agent filed for bankruptcy prior to completing the transaction they defaulted on the agency. I would equate this to UPS, Fed Ex, DHL. They are agents who are paid for a service to deliver a product they do not own. If they filed for bankruptcy I believe it would be hard to argue that packages they still had not delivered nor packages they had delivered within a short period of the filing would be considered property of the said entity. I do not believe the bankruptcy trustee can just start opening packages and selling the items contained therein to satisfy the debt of the agent. Just a thought. Your opinion/perspective would be appreciated.
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'Integrity is what you do when no one is looking' "The man who can keep a secret may be wise, but he is not half as wise as the man with no secrets to keep” |
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Read my blog; it will make all your dreams come true. https://adamstevenwarshaw.substack.com/ Or not... Last edited by Exhibitman; 04-09-2022 at 07:55 AM. |
#53
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1. Don't disagree, but who is charged with interpreting the laws passed by our Congress and state and municipal legislatures? I thought it was still the courts, which are basically all attorneys. And as for the legislators passing the laws, if you look closely, I think they often include a preponderance of attorneys. It has, I believe, only been in more recent years that the number of attorneys in Congress has finally dropped just slightly below 50%. But those bankruptcy laws have been around for quite a few years now. Want to hazard a guess what the % of attorneys was in Congress, or other legislatures, when they were passed? The fact that attorneys make money off people's legal troubles and issues has always created and promoted a biased, conflict-of-interest situation for them. The longer people fight over things, the more they make, and many, many, many people are of the opinion that attorneys will often prolong legal issues just to keep making money off clients. These bankruptcy trustees/attorneys have a built-in conflict of interest and bias in how they get paid. And even though they know the way these laws are sometimes used and enforced, and that they can end up harming innocent third parties, they can still turn a blind eye and sleep at night, collecting their money and blaming the problem on someone else. Just like you're blaming it totally on others right now. They damn well know better, but don't say anything because there is no profit in it for them maybe? Telling someone not to hate the players when it is the game that is really at fault might initially makes sense, but not when the players are ultimately part of the group that controls, oversees, and determines the rules of the game the rest of us are forced to comply with. I direct you to my last line of the second paragraph of my response to your point #2. 2. Really?!?!?! Typical attorney type of response. Want to do a poll on here and find out how many members before reading this thread had ever even heard of a UCC-1 filing, and/or knew that they should always be filing one whenever sending their cards in to a TPG, or maybe even keeping them in one of these vaults that are out there now? I'm sure that if asked in the past, a lot of people, including attorneys, would have said don't worry about it, nothing bad will ever happen. Until something bad does happen, like this Marx case. And here again is a case where these laws are written and followed more for the benefit and protection of sophisticated businesses and individuals, not for the average, everyday common person who doesn't have the time or expertise to find out about this crap and know that they may need to do something to protect themselves. If you really want to blame the submitters for not doing something, why aren't TPG businesses required by law to include warnings and notices on their websites or paperwork advising potential customers of the need to do such UCC filings to protect themselves and their property? Kind of like warning labels on packs of cigarettes. If I had to guess, I'd think the TPGs wouldn't want customers to see such potential issues as it would possibly scare away business. And if you talk to legislators and could actually get them to give a real, honest answer, you'd probably hear about all the business lobbies and efforts made to not pass laws and requirements that are seen as hindrances to them doing business as unrestricted as freely as possible. These Marx submitters are innocent everyday people for the most part I'm guessing. These bankruptcy/case trustees I assume are considered officers of the court, especially if they are attorneys. In that case I would have hoped that as officers of the court they would have some requirement to protect innocent third parties. Morally at least, if not ethically or legally. And don't just tell me that it doesn't matter because attorneys can only follow the laws on the books. People like attorneys in positions such as a bankruptcy/case trustee are well aware of the inequity and injustice people like these innocent Marx submitters are facing, and yet they and the bankruptcy court judges voluntarily choose to say and do nothing about it, it seems. I'm a member of the AICPA, the national organization for CPAs. Our organization is constantly petitioning and going up against the Treasury Department and the IRS on new tax laws, their interpretations, how things are being handled by the IRS, and so on, on behalf and for the benefit of ALL US taxpayers. Why doesn't the ABA (American Bar Association) start going back to their brethren in Congress and throughout the government on all levels and do some lobbying and apply some pressure to finally get some of these types of egregious, ridiculous laws and rules that can go back decades, if not hundreds of years in some cases, finally corrected so to more protect the overall innocent, everyday people in our society. Maybe the problem is the ABA doesn't get paid to do things like that. Or they're afraid to go against the big money and business interests that seem to control our government today. Or maybe correcting such stupid, inequitable and unjust laws ends up reducing a lot of legal issues and problems for everyday people so they don't have to get caught up in senseless legal issues and litigation. But then that would also likely result in fewer cases and less work for attorneys to make money on. In the end, what's the old saying? All that is necessary for the triumph of evil is that good men do nothing! 3. I'm well aware of the debt issues in bankruptcy you mentioned, and that is why I couched my statements with some uncertainty, as I don't know how this Marx company is set up (corporation, LLC, sole proprietorship, etc.), or if this is a Chapter 7 or Chapter 11/12/13 bankruptcy case. For the uniformed, Chapter 7 is you're done. All assets are taken and sold to pay off debts and the company effectively is out of business. Under Chapters 11/12/13 you are looking for a stay on your debts to give you time to hopefully reorganize and get the business going again, or set up some kind of payment plan to possibly pay off some of the debts, or have some forgiven, and still retain some assets or the business. Based on the Marx circumstances and amount of reported assets versus debts per the bankruptcy filing Adam mentioned, and that fact that Marx has torched their business reputation by sticking all their clients/customers in this crappy situation, I sincerely doubt the owner(s) are contemplating keeping this business going somehow. So, I'm guessing Marx filed for a Chapter 7 bankruptcy. If Adam can re-access the bankruptcy filing, he can let you know if I'm right or wrong. And because of the volume of business, the fact they hired bookkeepers, and the overall type of business and voluntary bankruptcy filing, I'm further going to guess the owner(s) were at least smart enough to separately incorporate Marx as a business entity, or establish it as a type of LLC, as allowed for the state they organized the business. And assuming I'm guessing right and the court can't get through to the individuals, as I said, then the Marx owner(s) will most likely walk away with no personal liability or other significant consequences. And though it doesn't happen with every bankruptcy filing, it seems more often than not that owners do walk-away pretty much scot-free. Why did you even bring up the fact that technically the debt with the bankrupt business never goes away, to be a contrarian and make it look like I don't know what I'm talking about? So what if the debt isn't erased for the business, I 'm referring to the individual owner(s) being able to walk away debt free and clear. Once the bankrupt business is closed down, no owner is going to restart it again. Why would anyone put money in to restart such a business and risk it being taken by the court? They would simply start-up and organize a fresh, brand new business with no existing debt issues. Plus in this Marx case, that business reputation is now toast. No sane business owner would likely want to restart and use a business with any such history. Duh! 4. For all our listeners out there, go to your favorite search engine and type in "how are attorneys trustees in a bankruptcy case paid" and enjoy reading some of the numerous listed links that will pop up. 5. I am well aware of the 90-day rule, and you basically just reiterated what I already said was the main reason for it. But your implication of there being exceptions and such to this rule doesn't mean that Trustees still won't just arbitrarily apply them to innocent parties anyway. An architect friend/client pushed his staff to complete several months' worth of work so the customer could finally submit the architects' past due invoices as part of the project's next draw request, so he could finally get paid. Drawings were completed, draw request was submitted, and my friend finally got paid in the normal course of business. Then several months later he learns that just a few days short of reaching that 90-day threshold after having finally been paid on that job, the customer files bankruptcy. The customer was no friend or relation, and this was the first and only job my client's firm ever did for this now bankrupt company. My friend also had no inkling or warning this customer may be in financial trouble and filing bankruptcy. Of course my friend had already spent all the money he had received on business debt and bills, along with wages for his employees. So, when the court and Trustee forced him to repay all the money his firm had legally earned and was entitled to, he had to incur more business debt and pull additional money from his own personal savings to cover everything. And then to add further insult to injury, it wasn't till many months later he then discovered he wasn't even going to get any of his money back in the case settlement. He wasn't a secured creditor. And the Trustee/attorney handling this case likely got some of my friend's money as part of their compensation. So, my friend effectively ended up paying to have himself screwed, and not in the "happy ending" kind of way. Would you like to know what my friend/client's opinion specifically was of the Trustee/attorney that was handling this case, or his general opinion of all attorneys overall as a result of this? 6. Thank you for explicitly proving one of my points. By attorneys and legislatures not completely removing these egregious CAF (civil asset forfeiture) laws in place, attorneys can now profit from defending clients in such cases in trying to get their money/property back. What happened, did the legal community get jealous of law enforcement having virtually the entire CAF pie all to themselves, so they worked to change the rules just enough to now be able to get paid by the courts? Before the changes to the CAF laws you mentioned, most CAF cases never even went to court because the legal and court costs were going to be more than the money/ property that was being taken. These law changes seem to help attorneys, like yourself, way more than they ever have for most of the victims of these CAF crimes. I understand that CAFs are now something like a $10B+ (that's billion with a "B") industry each year. Also, I've heard/read how upwards of 75%-80% of all CAFs involve no search warrants, filing of charges, or even arrests. Yet you claim that CAFs are not police just willy-nilly taking people's property. If so, as an attorney, please explain to me and our viewing audience how the right of due process is seemingly able to be totally ignored in such cases, and when were the changes to our constitution ratified so that law enforcement can now apparently entirely ignore our 4th Amendment rights in cases involving CAFs. This just illustrates how the legal community can work in conjunction with law enforcement and legislatures to potentially benefit themselves. In the accounting community, CPAs generally strive to be independent and free of conflicts-of-interests with our clients in fact AND appearance. We even have required peer review in our profession where other CPAs come in periodically to review some of our work to make certain we follow the rules and maintain independence. Not so sure the same can be said for any aspect of the legal profession though, can it Counselor? The vast majority of these people dealing with CAFs shouldn't ever have had this happen to them to begin with. Touting how the changes to this unconstitutional law benefits its victims so they can now afford to fight these seizures in court doesn't relieve them from the stress, anxiety, and other problems, costs, and issues resulting from these seizures in the first place. It does apparently result in an income stream for attorneys though. And it isn't entirely victimless. You defend someone in a CFA case and get them their property/money back. Okay, where's the money you get paid come from? Could it ever possibly end up ultimately coming from taxpayers like myself? If so, then I and every other taxpaying person are ultimately victims of this egregious unconstitutional law as well, that you as an attorney have directly benefited from. And don't just tell me it never ultimately comes from the taxpayers and that it only comes from money/property that is not won back by other CAF victims. That just incentivizes law enforcement to go out and find even more innocent victims to then replace the funds their legal brethren have now successfully taken from them. If there is one good thing to come from all this, it is that members are learning about these UCC filing concerns. Perhaps to be even more helpful to our community, you or another of your legal brethren would care to expand on what exactly needs to be done, where to get forms themselves if possible, and maybe even let them know more precisely, where and how to file them. Last edited by BobC; 04-09-2022 at 11:15 AM. |
#54
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A lot of “information” being tossed into these threads, but I am confident that the trustee in the Marx case will not claim that the cards are property of the bankruptcy estate.
As I understand it, this was in the nature of a true bailment, with Marx acting as some sort of service provider intermediary for which it would receive a fee. It never owned the cards, nor was this a consignment– the cards were not going to be sold by Marx after grading. Cards sent to PSA, i.e., those not in Marx’ possession, will not be sought by the trustee. Any cards still held by Marx will be returned to their owners upon proof of ownership. That does not require a filed UCC-1 financing statement, at least in Arizona. In fact, filing such a statement here would be confusing at best, and potentially detrimental. UCC-1s are generally designed to establish one’s status as a secured creditor. Those who sent their cards to Marx Cards were not secured creditors–they were owners. Filing something that suggests you are not an owner but merely a creditor may be construed as an admission that you created a consignment relationship, IMO. This is not to say that you should not have documentation clearly spelling out your ownership interest--I only suggest that a UCC-1 may not be the way to go. These folks did not authorize that their cards be sold. To the extent they are owed a return of their money sent to Marx, they should be treated as unsecured creditors, assuming they get their cards back. I had a case several years ago in which a bicycle shop filed bankruptcy while in possession of dozens of high-end bikes that were submitted for repairs or modifications. The owners of these bicycles had to prove ownership by means satisfactory to the trustee, but having done so they received their property, once it was determined that the repairs either had not been made or that payment had been received. There was no magic document needed there. BTW, the trustees indeed are compensated above their standard fee for property recovered and sold on behalf of the estate–on a sliding scale here in AZ. They also leverage their authority to “promote” settlement. I had a case long ago where my local AZ creditor was contacted by a bankruptcy trustee in New Jersey, demanding that he send back a payment he received around 60 days prior to a bankruptcy being filed by the payor. We argued that the debt was for contemporaneous value (goods and services) and not a preference payment of antecedent (old) debt, and that in our course of practice with this debtor over many years we were to be paid net 60 days. The trustee had little to stand on, in my view, yet he filed a preference action knowing that my client would have to hire an attorney and take action in a courtroom 2500 miles away. We “settled” by giving the trustee a healthy chunk of the money back, even though legally he had very little chance of ever prevailing. The things my client had to say about the bankruptcy system made even me blush (a little). I have a similar tactic being taken by a trustee in North Carolina right now. These are not quirky situations that fell on me, but are realties faced by many.
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If we are to have another contest in the near future of our national existence, I predict that the dividing line will not be Mason and Dixon's but between patriotism and intelligence on the one side, and superstition, ambition and ignorance on the other. - Ulysses S. Grant, military commander, 18th US President. Last edited by nolemmings; 04-09-2022 at 12:40 PM. |
#55
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Bob I don't want to say your posts are long, but I can use up my phone battery just scrolling through to get to the next one.
Sent from my SM-G955U using Tapatalk |
#56
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Then just put me on ignore.
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#57
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There you go! Much better.
Sent from my SM-G955U using Tapatalk |
#58
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I think they lost your cards. Keep waiting won't help. Good Luck.
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#59
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Right back at you!
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#60
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I am told PSA filed a motion to return the Marx cards to their owners and that the motion was just heard and apparently for the moment denied, but I don't see the ruling on the docket. A tweet from Jackie Curiel suggests PSA needs to do more to comply with the court's order but there doesn't appear to have been some ruling that the cards belong to the debtor's estate. What Todd said sounds right to me, that the cards are not going to become property of Marx's estate just because the owners did not file a UCC-1 when they gave Marx their cards to submit to PSA. That seems like a classic bailment which if memory serves does not require a UCC-1. But I wouldn't bet heavily on that result.
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My avatar is a sketch by my son who is an art school graduate. Some of his sketches and paintings are at https://www.jamesspaethartwork.com/ He is available to do custom drawings in graphite, charcoal and other media. He also sells some of his works as note cards/greeting cards on Etsy under JamesSpaethArt. Last edited by Peter_Spaeth; 04-14-2022 at 07:03 PM. |
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