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National Gold, Gainesville Coins, ICG, El Dorado Gold Investments.....

6 posts in this topic

appear to be related and intertwined.





National Gold to stay with Ch. 11, Yaffe wants to keep controlAugust 3, 2009 6:33 PM ET


Jane Meinhardt


A Tampa bankruptcy judge Monday voiced deep concern about National Gold Exchange’s management after a daylong evidentiary hearing but denied a motion to convert the company’s Chapter 11 reorganization to Chapter 7 liquidation.


“Evidence of misconduct and mismangement is substantial,” said Middle District Bankruptcy Judge Michael Williamson, adding there are “ample grounds” to convert the case to liquidation.


However, in the interest of getting more money sooner for unsecured creditors, Williamson said the Tampa coin dealer’s case would be fast-tracked through Chapter 11 with a trustee at the helm to displace the debtor-in-possession.


Consultants for and officials from Sovereign Bank testified that NGE used some of the collateral pledged to the bank for $35 million in loans to obtain loans from other entities and co-mingled assets with Gainesville Coins, which operates in the same office and is affiliated with Mark Yaffe and Alan Yaffe, owners of NGE.


In addition, the Yaffe family is involved in the ownership of Independent Coin Grading, a company that assigns values to coins and is located at the rear of NGE’s premises, according to testimony.


Elizabeth Sousa, a member of Sovereign’s precious metals unit, said bank officials conducting a spot check on July 10 at NGE were “stunned” at the disarray at the business and were alarmed that the company could not produce a perpetual inventory of coins.


In addition, it was difficult to separate Gainesville Coins’ assets from those of NGE or to locate about $2.7 million in coins that were reported to be at consignment sales, she testified. Instead, it appeared that NGE employees were holding some coins the company listed as consignment sales, Sousa testified.


Documents found when the bank obtained a writ of replevin before NGE filed for bankruptcy indicated there were lending relationships with other lenders with double collateral pledged to different institutions, Sousa testified.


Allegations that NGE kept two sets of books were not exactly correct, she said. “We didn’t find a set of books,” Sousa testified.


Another document bank consultants found showed that NGE planned to operate its coin business under an entity knows as Eldorado Gold after bankruptcy and that NGE sold $5 million in coins to Eldorado recently, according to testimony.


Richard McIntyre, a Tampa attorney representing NGE, said the business always paid its bills, including loan payments to Sovereign, and announced that Mark Yaffe wanted to remain in control of the estate to help liquidate the coins.


Yaffe also is willing to pledge his equity in his $25 million Avila mansion to the estate. McIntyre said the equity amounts to about $15 million.


He called the coin wholesaler an “Old World kind of business.”


Williamson denied NGE’s motion seeking turnover of the business’ valuables seized by the bank. The bank will keep the items until the Chapter 11 trustee takes control.


Copyright 2009 bizjournals.com


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Sovereign Bank should have taken custody of the coins and bullion used as collateral. But they probably did not do that because no bank was doing that under the ridiculous credit standards which existed during the mania and probably still exist today.

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I hate to see NGE go down, sign of the recession I guess.


They were a super wholesale supplier and their business dealings with me were superior. With the depressed state of the coin market and overall economy in general, I am sure there are some others which will go under. I had not done any transactions with them in awhile and was shocked to see this news. As I am primarily a retail only operation, I have done very well with material I have purchased from them over the years.


Banks hate coin dealers - banksters got all this bailout money at taxpayer expense from bad loans, fraud, overpaid employees and resent anything giving a hint of "real" money, especially gold.

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~I hate to see NGE go down, sign of the recession I guess.~


I'm sure recession spurred a few of the decisions, but from what I've read so far, there was manipulation of assets that intermingled with some of the sister companies in order to obtain gains.


It works until you get caught.


I think the one to fear out of all of this would be if the I.R.S. stepped in to investigate these shenanigans.

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I do not know the specifics but I agree with you entirely. The bullion "industry" cannot be hurting or if it is, I would be really surprised. Gold prices are about where they were at the peak and silver, though down about one-third, still has strong physical demand.



Possibly, it was a combination of both bad management and bad ethics. I thought I read here that they had misaccounted for collaterral and that did not sound like an accident.

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NGE's transactions with me were very ethical so I am shocked at their situation. The person who I interfaced with did a great job in filling my orders and for bulk transactions knew how to pick out what I wanted. Orders were shipped to me promptly. They were a great wholesale source for generic Dollars and Gold. I also purchased better date Gold and occasional Type as needed to fill orders from want list customers. It will be interesting to see the impact on ICG graded coins in the Bluesheet from this.


NGE was a great, dependable wholesale supplier and I did very well retailing a lot of their material to my customers. I hate to see them go down.



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