Regency Stamp Auctions In St. Louis

@cj

There is no legal duty for the bank to notify anyone because they have no idea who, what, when, when, and how much.

Unless money is put into an actual legal trust account, everything depends on the auction house.

Unless people are prepared to pursue fraud and go after the auction house in court, they will not have a leg to stand on.

It's not the auctioneers' money, and they shouldn't be using it for their own purposes. They should be able to cover expenses out of their share of the auction proceeds without "borrowing" from the unwitting consignors. If that's the actual business practice of the major auction houses, I'm stunned. Lawyers get disbarred for using clients' money, which is required to be held in a trust account.

That is because lawyers have legal trust accounts where auction houses do not. I have said in a previous post that auction houses should be required to have trust accounts to protect consignors.

Auction proceeds go into a trust account and buyer's and seller's fees go into their general account. The general account is what they use to run the business and buy collections if they want and the trust funds can only be used to pay consignors.

The trust account should also not be used for buying or sale proceeds of the auction house's own merchandise, which is another issue.

One stat that would be interesting is to find out if they sell consignors merchandise as well as their own if they take their money out first!

Every state and the Federal Government ,all have laws that govern "Customer Segregated Funds" . Lawyers have , Real Estate firms ,Auction Houses anybody who handles other peoples funds all make use of separate accounts at the banks and those banks will confirm and agree to handling funds as "Customer Funds ".
Since Regency had outside stock holders/investors means they had annual audits and that's the place to start ,get hold of the last few financial reports . This is not rocket science and you don't need a CPA or a audit team to review or discover cash flow .It is basic bookkeeping ,customer won lot ,did he pay , was check written to consignor ?

RUSTYC----My guess is the big consignors and APS members and his buddies got paid but the widows ,orphans and small collectors are sucking wind .......The ASDA and APS will keep quiet and let this die down .

A close family friend, now deceased, worked for the FBI for 35 years. His sole job was to investigate lawyers who made off with trust fund account monies. He had some horrific stories.
Don

Floortrader

So all the money owed to the consignors should still be in that account and none will be out a penny. That is why people have been posting that consignors were not paid.

I spent 30 years managing a financial collection office. I too have seen and heard horror stories and nothing is ever as easy as it seems. Unless you have a legal trust account and opened as a trust account, those funds are never as secure as you may think. In my years, I have garnisheed many of them.

One of the biggest differences is with realtors and lawyers, the money is paid "In Trust" where with auctions, it is not.

That's simply not correct, at least in the U.S. Lawyers are required by their ethical rules to have trust accounts in which they must keep client funds. But there's nothing magical about the money that comes in. It's not paid "in trust." I'm not even sure what that means, and I was a lawyer for more than 40 years. Often a check is made out to both the attorney and the client, but that simply means they must both endorse it before it's deposited in the trust account. Then the lawyer is permitted to withdraw fees and expenses but absolutely cannot touch the client's share. After the Regency fiasco, I wouldn't consign to any auction firm without knowing that the sale proceeds would be held in trust.

Dutchman ----Your may be right ,he comingled the funds into the companies bank account .I have to assume there were employee who knew what was going on.
I am surprised nobody has try to identify those customers who did business with the firm and try to form a idea of what damaged has been done and who is hurt by the closing of the firm .

One would think that those who have been harmed by Regency's actions; especially if large amounts of money are involved; would be engaging their own attorneys.

Some additional interesting information in a link posted on another stamp forum.

http://virtualstampclub.com/lloydblog/?p=5816

Linn's story on Regency is in the latest issue too.

Oracle of Delphi: It is great that the APS will be looking into this matter on behalf of its members. Where is the ASDA in this since they are the ones who should really be looking into this first and foremost?

Here is the Regency press release as published in October 18, 2002: (http://www.collectspace.com/ubb/For.../000415.html )
(http://www.regencystamps.com/PressR...20021018.htm )

Regency Stamps, Ltd. has purchased most of the assets and operations of Superior Stamps & Collectibles of Beverly Hills, California from its parent company A-Mark Auction Galleries. A-Mark Auctions through the sale of Superior Stamps is now a Regency shareholder. In a continuing effort to expand its business nationally, Regency has bought the venerable auction house which has been in business over 70-years. Superior has been a leader not only in the auction of stamps and postal history, but also of historical documents, sports and entertainment collectibles, and space memorabilia.

Both Regency and Superior will maintain their current locations and identities, securing their strong presence in the Midwest and West Coast. Administration and marketing will be moved to St. Louis, and Alan Lipkin who ran Superior's operation as vice president under A-Mark has now been given the title of senior vice president and will continue in the same capacity in Beverly Hills.

According to Regency president, David Kols, We are in business to enhance the hobby by building a service driven organization, and to make money for our shareholders. In order to continue Regency's growth, we found that Superior was a perfect opportunity adding their rich history in the stamp and related collectibles business to ours, and providing a strong presence in Southern California, in what may be the wealthiest geographic market in the country. In addition, A-Mark Auctions has extended Regency a $1 million Line of Credit allowing us to purchase larger deals for outright cash. As an interesting aside, California represents the second largest concentration of Regency's shareholders in a given state after Missouri. We are confident that at the end of the day Superior Stamps and Regency together will be more profitable and be the foundation of a future IPO.

A-Mark's President Steven Markoff said, With Regency's operational know how and focus, and with A-Mark's Line of Credit, the future looks quite bright for David Kols and his companies. The Line of Credit should allow Regency to aggressively compete for the best properties, and fund purchases they were unable to make in the past. We look forward to our involvement with them as a shareholder and lender.

David Kols has a successful track record. In just ten years, he has built Regency into one of the nation's leading stamp auction houses. And, with its energetic staff, state of the art computer system, and new larger office in St. Louis, the timing could not be better.

Plans are under way to continue Regency's four major auctions each year, plus add two more sales in California. Regency's next sale is scheduled for November 16th in St. Louis, featuring almost $1 million of no reserve philatelic material mostly large box lots and collections. Superior's first sale under Regency's ownership is scheduled for January 20-21, 2003 at its Beverly Hills office.

For more information, collectors should contact Regency-Superior Stamps & Collectibles at (800) 782-0066, Fax: (314) 361-5699, Email: info@RegencyStamps.com or visit their shop at: Regency Stamps, 229 N Euclid Ave, St. Louis, MO 63108-1505.

Website: http://www.regencystamps.com.

They never went public so they are privately owned corporation, I assume an LLC although I have not looked this up. The fact that A-Mark owns some of the shares of a private company is not of real importance beyond they are one of X amount of shareholders (owners). If I were owed money I would be digging into the type of corporation they are organized as, under which state they incorporated, who all the owners were, and the percentage of ownership for each. I would also be pressing for the BOD minutes and any other docs that the court appointed bankruptcy admin was willing to share.

If they had an IPO and were public this would be a bit easier to do, but as a privately owned corporation it is going to be costly and difficult.
Don