Financial woes continue for sports auction house
WinPitcher
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July 16, 2009
Financial woes continue for sports auction house
The company formerly known as Mastro Auctions says it can’t pay its consigners because the president of a New Jersey-based card grading service owes the sports memorabilia firm more than $400,000. But although Mastro executives filed suit against Dave Forman of SportsCard Guaranty on June 25 in Illinois state court, they have still not actually served Forman.
Forman’s lawyer Jeffrey Lichtman said the delay proves that the lawsuit is an attempt to shift the blame for Mastro’s problems with consigners - and its legal problems - on Forman.
“Just call me, and I will accept service,” Lichtman said. “I will accept it by fax. We don’t need to make this a major fuss.”
Former Mastro president Doug Allen, who purchased some of Mastro’s assets this year and formed Legendary Auctions with other Mastro executives, declined comment. Joan Ritchey, one of the attorneys representing Mastro in the lawsuit, also declined comment. An industry source said Mastro’s attorneys have visited SGC’s offices three times to serve Forman but he was not at the office.
Lichtman said it is well known in hobby circles that Forman and his wife recently had a baby, and the SGC executive works at home and has not visited the office in months. Mastro has not tried to serve Forman at home, Lichtman said. Lichtman was contacted by a Mastro attorney inquiring about serving the suit shortly after the Daily News contacted Ritchey.
Lichtman doesn't deny that Forman has an outstanding balance with Mastro Auctions, once sports memorabilia’s largest auction house and now the target of an FBI investigation focusing on shill bidding and fraud.
But Forman’s bill is much less than the lawsuit contends because Mastro officials did not subtract the value of baseball cards sold by the auction house against Forman's wishes, Lichtman said.
Forman had given the cards to Mastro Auctions for a future sale, but when the economy turned sour, Forman decided to hold on to the cards. Instead, Lichtman says, they were sold at a Mastro Auction for much less than Forman might have gotten at a future date with a different auction house.
Lichtman also says that Forman was the victim of shill bidding and other fraudulent activities under investigation by the FBI.
Forman, according to Lichtman, will file a countersuit alleging he was damaged by the unconsummated comic book deal. He'll also claim former Allen tried to blackmail him with a message left on his phone a few months ago. In the message, Allen claimed that Mastro auctions founder Bill Mastro had gone "completely insane" with anger over Forman's debt and would damage Forman's reputation and report criminal activity allegedly committed by Forman to the same FBI agents who are investigating Mastro Auctions.
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Lichtman said he’s looking forward to deposing Allen and other former Mastro executives: “The depositions are going to be utter annihilation. They will have to talk about the massive criminal fraud they have perpetuated. Doug can charm money out of hobbyist’s pockets, but he’ll have a much harder time with a lawyer.”
Read more: http://www.nydailynews.com/blogs/iteam/2009/07/financial-woes-continue-for-sp.html#ixzz0LXN2FUOK
Financial woes continue for sports auction house
The company formerly known as Mastro Auctions says it can’t pay its consigners because the president of a New Jersey-based card grading service owes the sports memorabilia firm more than $400,000. But although Mastro executives filed suit against Dave Forman of SportsCard Guaranty on June 25 in Illinois state court, they have still not actually served Forman.
Forman’s lawyer Jeffrey Lichtman said the delay proves that the lawsuit is an attempt to shift the blame for Mastro’s problems with consigners - and its legal problems - on Forman.
“Just call me, and I will accept service,” Lichtman said. “I will accept it by fax. We don’t need to make this a major fuss.”
Former Mastro president Doug Allen, who purchased some of Mastro’s assets this year and formed Legendary Auctions with other Mastro executives, declined comment. Joan Ritchey, one of the attorneys representing Mastro in the lawsuit, also declined comment. An industry source said Mastro’s attorneys have visited SGC’s offices three times to serve Forman but he was not at the office.
Lichtman said it is well known in hobby circles that Forman and his wife recently had a baby, and the SGC executive works at home and has not visited the office in months. Mastro has not tried to serve Forman at home, Lichtman said. Lichtman was contacted by a Mastro attorney inquiring about serving the suit shortly after the Daily News contacted Ritchey.
Lichtman doesn't deny that Forman has an outstanding balance with Mastro Auctions, once sports memorabilia’s largest auction house and now the target of an FBI investigation focusing on shill bidding and fraud.
But Forman’s bill is much less than the lawsuit contends because Mastro officials did not subtract the value of baseball cards sold by the auction house against Forman's wishes, Lichtman said.
Forman had given the cards to Mastro Auctions for a future sale, but when the economy turned sour, Forman decided to hold on to the cards. Instead, Lichtman says, they were sold at a Mastro Auction for much less than Forman might have gotten at a future date with a different auction house.
Lichtman also says that Forman was the victim of shill bidding and other fraudulent activities under investigation by the FBI.
Forman, according to Lichtman, will file a countersuit alleging he was damaged by the unconsummated comic book deal. He'll also claim former Allen tried to blackmail him with a message left on his phone a few months ago. In the message, Allen claimed that Mastro auctions founder Bill Mastro had gone "completely insane" with anger over Forman's debt and would damage Forman's reputation and report criminal activity allegedly committed by Forman to the same FBI agents who are investigating Mastro Auctions.
.
Lichtman said he’s looking forward to deposing Allen and other former Mastro executives: “The depositions are going to be utter annihilation. They will have to talk about the massive criminal fraud they have perpetuated. Doug can charm money out of hobbyist’s pockets, but he’ll have a much harder time with a lawyer.”
Read more: http://www.nydailynews.com/blogs/iteam/2009/07/financial-woes-continue-for-sp.html#ixzz0LXN2FUOK
Good for you.
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Comments
Don't waste your time and fees listing on ebay before getting in touch me by PM or at gregmo32@aol.com !
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
<< <i>utter annihilation >>
Wow sounds like the name of my new band
You can pretty much kiss the new Legendary goodby after this fall out is complete. I have no doubts that Forman knows what Mastro was doing as far as fraud but did third party graders help mastro out knowingly is the big question?
James
I just don't understand how this kind of stuff happens - ya gotta pay your consignors! No matter how big a buyer is - just tell them - "our accountants" tell us - we HAVE to collect first before shipping the goods.
I guess the best thing to do...
Trust NO ONE!
mike
Instead lets send my SGC 98's that were graded by the company I'm a head executive for to an auction house. The auction house accepts the items and sells them and no one pays the consigners yet the items have shipped when some items by winning bidders have not even been paid for. Has anyone thought that there are no winning bidders on some items because they were just imiginary shill bidders not real people that were the winning bidders. Would anyone deal with legendary auctions?
This hobby, especially at the big time level, has a lot of shady characters.
Does this happen? Cosign the card, cosigner calls buddy tells him to sign up and bid on the card. Buddy doesnt get outbid and fails to pay??? Where do you stand??
Ive heard a few collectors that bought cards back for the cost of the fees through a friend. So
I really do hope this gets to a deposition as it sounds like some juicy stuff wouild come out. Stuff we all knows goes on but never had it on record.
HA! Oldest trick in the book.
Kiss me twice.....let's party.
<< <i>Everyone can hate on Ebay as much as they want, but everything I've ever sold on there I've gotten my money instantly. >>
I agree. I view auction houses as a relic in the hobby. Outside of big money collectors and old timers selling their collection, I don't see a need for an auction house.
<< <i>The auction houses generate publicity for their cards. Some cards go for considerably more with an auction house. >>
Agreed. For the high dollar or unique item, an auction does make sense. For a PSA 8 Rose Rookie, buyers and sellers probably do better on ebay (even with the feebay fees).
If you have supremo, awesome can't get anywhere else stuff, AH's are for you but as card pops get higher and they become more commodities I don't see the advantage unless you believe someone is paying 5X ebay prices for common 60s HOFs.
Steve