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tsphillis

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Reply with quote  #16 
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There are significant differences in premiums (>10%). I don't want my metal valued at spot price.


I suspect the Creditor's Committee will be floated a proposal to value the metal claims at spot price...on some specific date. That would significantly simplify the process and move it forward much faster. If there's hope for customer's getting anything AND BD emerging from chapter 11, everyone will have to take a haircut.

Call me an optimist... [smile]
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spainte

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Reply with quote  #17 
Quote:
Originally Posted by tsphillis


I suspect the Creditor's Committee will be floated a proposal to value the metal claims at spot price...on some specific date. That would significantly simplify the process and move it forward much faster. If there's hope for customer's getting anything AND BD emerging from chapter 11, everyone will have to take a haircut.

Call me an optimist... [smile]


I don't see Dr. Kazu Suzuki (expected to be on the creditors committee) accepting such a proposal based on his attorney's original demands
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au

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Reply with quote  #18 
Also "Fungible" could have even worse consequences in terms of violation of IRC section 408(m)(3).  That's why "fungible" isn't written into the IRA rules that govern IRA property ownership and its requirement of physical possession by the storage custodian.  It would be too subjective, with the limited number of approved coin and purity types, and would adversely promote excessive movement of stored product.  Any IRA storage custodian using this word in their contract verbiage would be negligently violating the governing IRC code.  -au
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JG

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Reply with quote  #19 
Quote:
Originally Posted by spainte
How have we even begun to accept any notion of our coins as being fungible. A CMX 10 oz bar is not the same as 10 American Silver Eagles. There are significant differences in premiums (>10%). I don't want my metal valued at spot price. Or will things devolve into just ounces of metal and we will all be shipped a hunk of lead? Sounds like many want a pound of flesh instead.


I would not be surprised if it comes down to ounces (e.g. someone with a 10oz bar getting the same amount as someone with 10 ASEs). I think it would be a lot more work to try to figure out premiums (although it may be legally required).

What I can say -- hoping not to open a can of worms -- is that if a debtor (Bullion Direct in this case) does not list your claim at the amount you believe it should be, you can file a Proof of Claim form with evidence showing otherwise. On the other hand, they might file an objection, saying that all claims should be at spot price.


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JG

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Reply with quote  #20 
Quote:
Originally Posted by spainte
I don't see Dr. Kazu Suzuki (expected to be on the creditors committee) accepting such a proposal based on his attorney's original demands


Ah, but that demand is an impossible one (returning his coins, which Bullion Direct no longer has). The demand letter was written on the same day that we found out that "Oops, the stored metal is pretty much all gone." So it is not clear if the attorney knew when the demand letter was written that the metal wasn't there.

But either way, I think anyone with metal stored at Bullion Direct would have (and still would) take the position that the metal is there, and therefore it should be returned. The question is what happens if the metal isn't there, which we now know to be the case.

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shooter magaven

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Reply with quote  #21 
And if gold and silver bars & rounds are not there, then they had to be either sold or stolen.
If they were sold, BD sold property that did not belong to them (coversion). And, the people it was sold to would be in possession of stolen property. Sometimes this stolen property can be seized by law lawenforcement and returned to its rightful owner. (In a perfect world, of course)
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BDistheBestest

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Reply with quote  #22 
Shooter - there is a distinct third possibility: Bullion Direct never had the bullion to begin with.  This is what I increasingly suspect to be the case.  I think they kept enough on hand to give the appearance of solvency and fulfill customer draw requests, but I don't think they ever had 100% of the bullion they claimed to have on hand.  This would explain the mysterious $17M loss in 2012 (can't remember the exact date, but when the ToS changed and an attorney was paid for potentially entering bankruptcy).

My guess is that $17M represented bullion that Bullion Direct claimed to be holding for customers but had never purchased in the first place.  Before opening the books to a bankruptcy attorney (or perhaps after the attorney saw the books), they decided to simply write it off as a loss (while still fraudulently accepting customers' money).

I think this business has basically been fraudulent from day one, but not until recently did it catch up with them.
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shooter magaven

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Reply with quote  #23 
Quote:
Originally Posted by BDistheBestest
Shooter - there is a distinct third possibility: Bullion Direct never had the bullion to begin with.  This is what I increasingly suspect to be the case.  I think they kept enough on hand to give the appearance of solvency and fulfill customer draw requests, but I don't think they ever had 100% of the bullion they claimed to have on hand.  This would explain the mysterious $17M loss in 2012 (can't remember the exact date, but when the ToS changed and an attorney was paid for potentially entering bankruptcy).

My guess is that $17M represented bullion that Bullion Direct claimed to be holding for customers but had never purchased in the first place.  Before opening the books to a bankruptcy attorney (or perhaps after the attorney saw the books), they decided to simply write it off as a loss (while still fraudulently accepting customers' money).

I think this business has basically been fraudulent from day one, but not until recently did it catch up with them.


Ahh, yes, the third option.
Then, if this "revenue" was not used for buying bullion, and was not burried in the back yard (5th option) and not spent on entertainment (whores, liquors & gambling- the 6th option) then it was used for tangible assets that can be liquidated (4th option)
Of course the 7th option is that it funded other failing business ventures that are also insolvent, in which case is a failing business funding another failing business..and so on and so on till nothing is left to recover.
and as my luck would have it, this 7th option will of course be THE one.


Note: Option numbers are listed as best to worse, not order of appearance.
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nobody

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Reply with quote  #24 
Can I vote "some of the above"?

(Below is entirely hypothetical/speculation)

I really wanna give CM of 15 years ago the benefit of the doubt -- he had a partner, people don't usually create corporate structures with the intent to defraud (at least not the first one).

Time goes by, he's sitting on this big pile of other peoples money, his brother/cousin/uncle/neighbor comes by one day to drop off some mail, and CM gives him a tour, and the germ of a seed is planted ("Look at how rich you are!").

A few weeks/months later B/C/U/N says to CM, hey, can I borrow some of that for my business-venture/investment/whores-liquor-gambling?

CM says, well, I know BCUN's good for it, I'll charge him interest and make everyone whole later.

Maybe he does that first time, or the first few times, but at some point someone's loan blows up - maybe to himself, maybe to BCUN, doesn't matter.  It's big enough that he realizes that he needs to have a legal basis to lose money, so he modifies some terms about using things in fungible form and profits and losses inuring to him.

His accountant or lawyer starts foaming at the mouth when they're informed / become aware of the situation, and the initial Chap 11 is discussed with JM in general terms, including who can pursue assets of the company or criminals associated with it, and what assets are hardest to come after.  Perhaps some statute of limitations as well.

<shenanigans happen>

Two years later, another call with JM occurs.

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shooter magaven

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Reply with quote  #25 
Customers did ship bullion to BD. I did, but it was several years ago and it has since been traded for another catagory of metal (e.g. sent them 100oz Silver, they stored it and then sold it on Nucleo for 3 -1/2 oz gold Maple leafs and I didn't take delivery of the Maples so they stored it.)

So my Silver would not be in the vault because , as Nemo said, it was delivered as fulfillment for another customer. This, I suspect, was the case for most metal sent for storage.

However, I am curious how many people sent BD metal and never traded for another metal. How many can actually point at the vault list and confidently say "that is the bar I sent you for storage, and I have the serial # to prove it". If that bar is not in the vault, then is it not direct, indisputable evidence that BD lost or sold that piece of metal that did not belong to them? Is there any other plausible explanation of how or why it is missing?
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tboll

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Posts: 299
Reply with quote  #26 
Quote:
Originally Posted by nobody


Time goes by, he's sitting on this big pile of other peoples money, his brother/cousin/uncle/neighbor comes by one day to drop off some mail, and CM gives him a tour, and the germ of a seed is planted ("Look at how rich you are!").



I can hear the conversion now...
"Charles, you are sitting on a Gold Mine [literally].  Why don't you put it to use and make a ton of more money?"
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jkline

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Posts: 97
Reply with quote  #27 
Shooter, in my experience they would only store metal for thirty days after 2012. After which it must either be sold or returned.
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shooter magaven

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Reply with quote  #28 
Quote:
Originally Posted by jkline
Shooter, in my experience they would only store metal for thirty days after 2012. After which it must either be sold or returned.


Ok, I should have specified the metal shipped to BDI prior to the ToS change.
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