Things are tough all over - a July 28th article in the St. Petersburg Times reports that mega coin dealer National Gold Exchange has filed for bankruptcy. -Editor Mark and Alan Yaffe, two brothers from Boston with a yen for coin collecting, formed National Gold Exchange Inc. barely out of school in the late 1970s.
Thirty years later, National Gold Exchange, one of the world's largest coin wholesalers, is battling for survival with more than $50 million in debts.
On Friday the Tampa company filed for Chapter 11 bankruptcy. It happened after Boston's Sovereign Bank, NGE's largest creditor, called a $35 million business loan to the Yaffes earlier in the week.
Sovereign officials arrived last week at NGE's office on North Dale Mabry Highway to remove millions of dollars worth of coins pledged as collateral for the loan.
"We basically didn't have a choice with the bank debts and the other debts that are owed," said NGE lawyer Daniel Saxe. "The plan would be to see if the company can reorganize and come out with a clean start.''
Rumors that NGE had fallen on hard times have swirled around the coin business the past year. Several business associates in Colorado sued the company for unpaid debts in 2008. In May, Sovereign Bank said it discovered NGE was floating bad checks after exhausting its $35 million line of credit with the lender.
Still, since the teenage Yaffes opened a coin stall in a Boston mall in 1975, the business has made them millionaires many times over. They moved the company to Tampa in the late 1980s.
Mark Yaffe, 49, is trying to sell a $25 million, 29,000-square-foot mansion in Tampa's exclusive Avila neighborhood. His brother, 53, lives in another Avila mansion about half that size.
In a lawsuit filed last week, Sovereign Bank accused Mark Yaffe of cashing in $12 million to $15 million worth of coins to build the mock 17th century English country manor in 2004.
Yaffe designed the house partly to display his vast collection of music boxes, pianos, organs and antique automaton dolls. The oldest dates to 1760. Sovereign mentioned the collection in its lawsuit against NGE.
To read the complete article, see: National Gold Exchange Inc. of Tampa files for Chapter 11 bankruptcy (www.tampabay.com/news/business/article1022261.ece)
A Tampa business journal covered the case as well. -Editor National Gold Exchange filed for Chapter 11 bankruptcy reorganization June 24 as bank consultants were taking what Sovereign contends is collateral for $35 million in loans to the business. Rob Soriano, the bank’s attorney, alleged in a hearing Tuesday that some coins were being removed through the back door of the business as they arrived with a writ of replevin. He also said there were questions about more than $2 million in coins transferred to a company that does not exist.
An attorney for National Gold Exchange said in the hearing that what the bank took was the company’s inventory, which forced the business to shut down. The attorney said the company had been making $1 million per day.
To read the complete article, see: Sovereign Bank holds onto National Gold Exchange items (www.bizjournals.com/tampabay/stories/2009/07/27/daily37.html)
Wayne Homren, Editor
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