Regency Stamp Auctions In St. Louis

jmaaron,
I would be anxious to get the basic Chapter understanding; i.e. call the lawyer. If he proves hard to get on the phone, I would even consider pretending to be a new client.

His letter indicates 'secured' and 'unsecured' assets. I would want to know about these but this might have to wait until the legal proceedings get further along. Once a trustee is assigned, money is distributed per the bankruptcy laws.

But Floortrader is right; before bankruptcy a company can run their business the way they see fit. Was there a window of opportunity between the time that the company owner made the decision to declare bankruptcy and actually declare it? I am sure there was but who can say for sure how much time this was? Was it one day, one week, one month, 6 months? In the time before declaring bankruptcy I am not sure that payment prioritization is something that would fall under legal scrutiny (unless the owner made off with cash for himself). any hobbyists could afford to investigate or incur the kind of legal costs this would require. I would assume that they typically gave the largest debtors the highest payment priority.

Don,

I'm certainly no lawyer, but I believe it's a bit more tricky than "before bankruptcy, a company can run their business the way they see fit". In other words, if a business owner KNOWS that the business is going to become insolvent, i.e., inevitable, and then prioritizes creditors to show favoritism before filing bankruptcy, I believe that can be actionable.

What I don't know is under what specific circumstances the law applies culpability upon the business owner.

I think that's what clawback provisions are all about.


[Standard disclaimer: I'm not a lawyer, this is my lay opinion, do not rely upon it, do not pass GO, do not collect $200.]

Hi Dan,
I was updating the post when you replied.

I am sure that if someone had inside info like leaked emails, or is willing to hire forensic IT and accounting experts; paired with some lawyers they might be able to put a case together.

This stuff is a rich man's game.
Don

Edit; ideally you would have something like a BOD minutes or some other document that demonstrates they knew bankruptcy was likely. But in many smaller companies this is not likely to be in writing anywhere. Proving intent can be hard (read as expensive).

@51studebaker

This discussion has been ongoing for some time. Same story, different players.

http://www.stampboards.com/viewtopi...t=68129&f=10

Some collectors are skeptical and mistrust some philatelic organizations because they seem to be more interested in looking out for their business advertisers than for their collector members.

That's undoubtedly true in terms of BOD minutes or similar formal documents. However, in this day and age, emails and text messages are a frequent source of damning evidence, even if they have supposedly been deleted.

Rusty,
true enough. Simply hitting the |Delete| key actually leaves the file on your hard drive. Your hard drive maintains the file system with an 'address book' (actually a File Allocation Table). So to save time and wear/tear, when you delete a file only the 'address book' entry is removed, the file remains sitting on the hard drive. But the space for the old file is marked 'available' for new files to be written to that sector. Once you start to use your hard drive and write more files it will eventually overwrite the old deleted file sectors.

Of course with the news of the last year or two (BleachBit stories); many people are now aware of this. It is easy to permanently delete files so they cannot be recovered at all, even by experts. These hard drive 'scrubbing' applications simply write/rewrite random files to the hard drive hundreds of times to ensure no file remnants remain on the drive.

Heck, in less than 5 minutes you could write a script file which does the same thing. If a person was doing something illegal or nefarious, they would certainly want to scrub their computer hard drives to prevent the easy retrieval of deleted files.
Don

You're absolutely right, Don. But I'm constantly amazed at the number of people -- even smart people who think they're computer-savvy -- who don't think to do this, especially with text messages.

However, this only pertains to LOCAL files. With respect to email, scrubbing local files is meaningless. Emails could be stored at the sender's end, their ISP, or (conceivably) one of any SMTP points along the way.

The Internet has no DELETE button.

Again, true enough. But even the FBI, with floors full of IT expert resources and huge budgets, were finding 'external' files months after they were needed. Proving this kind of intent takes a LOT of money, far beyond typical collectors are willing to pay on loss of consigned material at this auction house. I am not even sure that a $50k loss would justify investing in this level of discovery. (Search warrants and other legal actions needed to start chasing other third party companies.)

Perhaps Chris could weigh in on the possibly of a large group of debtors pooling resources.
Don

Edit: All corporations were shocked when Microsoft got caught with emails that cost them millions of dollars (back during the browser wars era.) Smart companies immediately began to purge their email databases of any email older than a month or two. They implemented policies on their email servers which force users to purge emails. Additionally there are other reasons that storing info in emails is about the worse position for a company to be in.

But I doubt that Regency had this much sense or IT understanding. Who knows, perhaps they were careless or just plain stupid.

Even if you were to get enough people to pool resources, you have to ask the question "to what end"? If the business is going bankrupt to the point that it cannot pay it's creditors to begin with, where is the money going to come from to also pay any investigative/legal expenses?

Sure, in theory, if a culpable party is found, AND has sufficient assets to make it worthwhile, AND a successful civil lawsuit can be achieved, AND the lawyers in question don't take the lion's share of the proceeds, then MAYBE it's worthwhile.

If we were talking 7 figures or more of money to be acquired, it might be worthwhile, but in this case (based upon what I have read/heard) I doubt it would be worth it.

Sorry guys ...... I would be a S.O.B. if and when I become part of any claim . First I would stop the banks from moving forward on the assets of the company ,then I would invite the employees in for a little talk with our lawyers with the threat they could be named in the court claim . Did the employees and officers received a healthy departure bonus ? Did David and Penny take funds out of the business ? Were big consignors getting paid .
This is not rocket science ,who got money out of the firm ? Most likely there are auction buyers who have out standing balances and that money is not assets of the firm ,it is money not paid to consignors .

You also got employees/officers who were handling the books and talking to customers ,were they misleading people ,do they have a respondability as APS members .
The right group of people getting together and filing a CLASS ACTION LAWSUIT would freak out everybody plus those who have up to this point been hiding on the sidelines .

Regency Stamps and David Kols didn't go under for millions of dollars due to mailing out catalogs or buying me Coke and cookies at his auctions . There is something else going on .
At FLOORTRADER STAMP AUCTIONS ,we take our annual stamp buying trips to Hawaii and the Bahamas with the wife and kids . We also work extra hours late at night when a new consignment or a large purchase is made before the next day when our lot describers come to work to inventory the lot for sale . We also make big company pension contributions to my wife's pension plan .
There is so many factors to look at but E-mails ,the checkbook, consignors and employees, is the place to start .You use the shotgun approach and add everybody name to the lawsuit and then you request records for discovery .

I had enquired of Kols attorney "if there was a court order to freeze the bank accounts of Regency Superior along with the tangible assets?"

The attorney's response me today follows"
"There was no court order to freeze any bank accounts or any other property. Regency Superior is out of business and the bank is liquidating its assets."

I'm not sure how a bank can just take control of bank accounts and assets and just liquidate a company.

They have security on the debt and the right of set off on deposits against the debt.