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Despite Ch. 11 and fraud allegations, coin dealer back in business
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Friday, August 21, 2009 Tampa Bay Business Journal - by Jane Meinhardt Staff Writer TAMPA — Well-known and embattled coin dealer Mark Yaffe has a new company with what may be an appropriate name: The Phoenix Gold Corp. Just two weeks after National Gold Exchange Inc. — the coin business Yaffe and his brother opened more than 20 years ago — filed for Chapter 11 bankruptcy reorganization, Yaffe is operating another firm dealing in coins. In e-mails to other coin dealers, Phoenix Gold describes itself as a wholesale distributor of precious metal products. Its address on North Dale Mabry Highway is several doors from NGE’s current location. State corporate records show Phoenix Gold incorporated Aug. 4 with Yaffe as the sole officer. NGE filed its bankruptcy petition July 24, listing $50 million in liabilities. A Chapter 11 trustee now oversees the coin wholesaler, taking control from Yaffe. A bankruptcy judge made some crucial rulings regarding NGE the day before Phoenix Gold was incorporated. U.S. Bankruptcy Judge Michael Williamson decided to put a trustee in control of NGE and allowed Boston-based Sovereign Bank, the company’s largest creditor, to continue holding coins and other valuables the bank removed from NGE last month during execution of a writ of replevin. The value of what the bank seized is unclear but it is less than the $35 million owed, court records show. Yaffe, contacted at one of three telephone numbers listed for Phoenix Gold in its e-mails, said he could not comment because of pending litigation and referred questions about the new business to Donald Saxe, one of his attorneys. Saxe, too, declined to discuss Phoenix Gold “because of the nature of allegations swirling about” and the “convoluted and fairly complicated” bankruptcy case. In one of his rare appearances in bankruptcy court on July 28, Yaffe was calm and showed little emotion, despite harsh claims in open court about his business practices. Bank contends $35 million owed Sovereign called NGE’s loans in July after receiving a letter from lawyer David Hammer, who alleged Yaffe sold up to $15 million of NGE’s inventory to finance construction of his $25 million mansion in the exclusive gated North Tampa enclave Avila. Documents that bank consultants found at NGE indicated it intended to operate its coin business as El Dorado Gold after bankruptcy and showed that NGE recently sold $5 million in coins to El Dorado. The documents found at NGE by bank representatives also showed a Yaffe family member is president of El Dorado. Sovereign alleges in court documents that NGE has been involved in fraudulent and improper conduct and “grossly mismanaged its affairs.” For example, Sovereign contends that from January through July 22, numerous NGE checks payable to Yaffe and totaling more than $2 million were deposited at Bank of America (NYSE: BAC), court records show. A spokeswoman for Sovereign declined to comment early this week on Phoenix Gold or NGE matters. In its Chapter 11 case management summary, NGE states it has shut down because the bank seized its inventory and it cannot pay its 29 employees. The summary shows NGE’s 2008 revenue was $288 million. Yaffe and his brother each were paid an annual salary of $700,000. Recession resiliency “The coin business is weathering the economic storm amazingly well,” Garrett said. “Rare coins keep their value. It’s possible to do $1 million a day with a lot of bullion-related products.” He has sold coins to Yaffe on a cash basis and is familiar with NGE. “I think whatever problems they may be having are unique to them,” Garrett said. He cites his own local banking relationships that go back 25 years based on trust. “Rare coins have a wide range of values, and they’re collateral that can be moved.” NATIONAL GOLD EXCHANGE OVER TIME This email address is being protected from spambots. You need JavaScript enabled to view it. | 727.224.2299 |