By MICHAEL SASSO msasso@tampatrib.com

The Tampa Tribune

Liquidation looms for National Gold

Published: March 5, 2010

TAMPA – Mark Yaffe, a Tampa businessman who became one of America’s leading gold coin dealers, will see much of his empire dismantled after a bankruptcy judge’s decision Wednesday.

U.S. Bankruptcy Court Judge Michael Williamson on Wednesday converted National Gold Exchange’s Chapter 11 bankruptcy case to Chapter 7 bankruptcy. The judge’s action spells the end for the gold and rare coin company because Chapter 7 bankruptcy leads to a company’s liquidation.

National Gold’s chief creditor, Sovereign Bank, already had seized most of the company’s assets months ago, but was prevented from selling them when National Gold filed for bankruptcy protection last summer.

Those assets include millions of dollars in gold and rare coins and Yaffe’s unusual collection of antique music boxes, which are similar to player pianos.

Now, with the judge’s order, the bank is authorized to liquidate the items. Richard McIntyre, National Gold’s bankruptcy attorney, expects the music boxes could sell for at least $7 million, while the coins should sell for more than $5 million.

Meantime, Yaffe is trying to sell his opulent mansion in Tampa’s Avila community to pay his creditors. The 29,000-square-foot residence is stocked with his renowned collection of music boxes.

Yaffe’s troubles started last summer when a lawyer sent a letter to Sovereign Bank claiming Yaffe was improperly using some National Gold assets to pay for his mansion.

Acting on the tip, Sovereign Bank quickly began an investigation and found several problems at National Gold, including missing coins and faulty accounting.

Despite his company’s liquidation, Yaffe expects to continue in the gold coin business, McIntyre said. He recently has received loans from his father and others allowing him to launch a new, if much smaller, coin operation called Phoenix Gold, McIntyre said.

National Gold Exchange’s Mark Yaffe could emerge from bankruptcy in March

By James Thorner, Times Staff Writer

In Print: Thursday, November 19, 2009

More than $36 million in debt, Tampa gold and coin dealer Mark Yaffe plans to emerge from bankruptcy as early as March.

At a hearing in Tampa bankruptcy court Wednesday, Yaffe’s National Gold Exchange, one of the world’s largest precious coin wholesalers, said it had mediated a tentative deal with Sovereign Bank, its largest creditor.

The agreement would force Yaffe to liquidate his 30,000-square-foot mansion in Tampa’s Avila neighborhood, sell off part of his multimillion-dollar collection of antique music machines and turn over future profits to creditors.

“We’re confident we’ll have the approval of the bank,” Yaffe bankruptcy attorney Richard McIntyre said.

Sovereign lawyer Robert Soriano confirmed “there’s a core of a deal there,” provided Yaffe discloses his finances more deeply. But getting that information hasn’t been easy.

Investigators working on the bankruptcy case said they had yet to fully crack Yaffe’s “antiquated” computer system to retrieve financial records.

Yaffe himself has also been reluctant to talk. According to testimony Wednesday, Yaffe has invoked his Fifth Amendment right against self-incrimination.

National Gold filed for Chapter 11 bankruptcy in July after Sovereign called back $36 million worth of loans. Although the company had been current in repaying Sovereign, the bank got a tip that Yaffe had siphoned off about $10 million from his company to build his mansion.

The informer was a lawyer for the Bilzerian family, former friends and neighbors of Yaffe who had a falling out over a broken business deal.

U.S. bankruptcy Judge Michael Williamson gave National Gold 60 days to come up with a reorganization plan to satisfy Sovereign. A hearing to confirm it is scheduled for March 3.

James Thorner can be reached at jthorner@sptimes.com or (813) 226-3313.

 

Monday, August 3, 2009

National Gold to stay with Ch. 11, Yaffe wants to keep controlTampa Bay Business Journal – by Jane Meinhardt Staff writer

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.

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