About.Ag


All About Silver - ... the buck stops here ...



[Summary: In Chapter 11 bankruptcy (reorganization) after reports of 6+ month delays, $55.8M owed creditors]
[Threat Level: I have received no legal, verbal, written threats or subpoenas at least as of August 17, 2018]
[Related Pages: court documents, mailing list, tips, Bullion Dealer Data, 341 Meeting]
[Contact:
]

Admin Claims Expected to be ~33%

August 17, 2018 2:25PM EST
In the WARN Act negotiations, Chapter 11 Trustee Mark Calvert stated that he estimates that administrative priority claims will receive a recovery of 1/3 or less of the amount of their allowed claims.

Administrative claims include, among other things, trustee fees, attorney fees, and wages or benefits owed employees.

This also means that Calvert expects that non-priority creditors (such as storage and bullion customers) will not receive any money, as all priority claims (such as administrative claims) need to get paid before non-priority claims.

WARN Act Settlement

August 17, 2018 2:10PM EST
Both sides of the WARN Act issue have agreed on a settlement, subject to the Judge's approval. The WARN Act requires employers in many cases to provide 60 days notice of termination when there are mass layoffs. The Trustee calculated that the maximum liability for the estate would be $642,000.

If approved, NWTM would pay $125,000 to settle. By my calculations, about $76,000 of that would end up going to the 100 NWTM employees that are part of this class (proportional to what their claim is estimated at, which is based partly on their salary), or roughly 12% of what Calvert calculated their claim as. The settlement agreement Exhibit A shows $81,337 as "Net Allocable to Employees", but does not seem to include the $5K of estimated legal expenses they listed. I would suggest that might be an error, and that the Exhibit overestimates the allocation for each creditors, but as a non-professional, I will assume I misunderstand the exhibit. I don't want to post misinformation.

Wanted: Calvert's Misinformation at about.ag

August 10, 2018 7:00PM EST
As someone who takes great pride in honing in on the truth, I naturally take notice when the accuracy of my site is questioned.

Since I started the site in 2011, I have twice had people make references to lots of misinformation on my site. Neither was able to back it up. The most recent was NWTM Chapter 11 Trustee Mark Calvert, who at the July 27 hearing was listening to the Judge talk about how Calvert missed opportunities to discover the fraudulent emails, when Calvert started saying (at 32:10) "So much misinformation with the about.ag site about rulings that have been made..." Calvert was unable to back up his statement, even after I told him that if he could not I would be forced to tell the Court that he could not (the letter arrived today).

The other time someone made a similar accusation was private, when NWTM's President/CIO Paul Wagner called me, upset about what I had written about his Sierra Mint. He told me at least twice in his conversation with me that a lot of what I have written is false. Interestingly, my phone number is private, and few people have it -- I believe he got it from Jerry Moran of Medalcraft (this was around the time the Medalcraft name entered the picture), who had asked for it a few days earlier (but never called me). Shortly afterwards, Paul Wagner asked me to take down an update he said was "false" -- yet after I pointed out the information I had verifying the statements, he never responded. Hmmm.

So I have only seen misinformation statements coming from NWTM, through Mark Calvert and Paul Wagner. But Calvert's statement goes much farther than Wagner's: Calvert made his statement in court to the Judge as an excuse for why he didn't do something the Judge thought he should have been able to do. And Calvert is refusing to back it up!

Calvert claims that he has talked to hundreds of people who were misinformed by misinformation about court rulings at my site. That seems impossible to me, and if true, Calvert has sucked up $10,000+ from the estate by my calculations, all because he won't tell me what this misinformation is. If anyone wants, feel from to ask Calvert himself (mark@cascadecapitalgroup.com, 206-909-3636) or his attorney Michael J. Gearin (michael.gearin@klgates.com, 206-370-6666).

The accusations

August 7, 2018 3:55PM EST
The NWT Mint email scandal started when it was discovered that Jenifer Baker, an NWT Mint employee, sent emails to 74 customers misrepresenting what the court had and had not ruled about die ownership. At a hearing on July 6, 2018, the Judge ordered that NWT Mint file with the court copies of the emails sent to customers regarding the return of their dies. Mark Calvert stated that the false information came from Ms. Baker's misunderstanding, and not from him.

There was another hearing (a "show cause" hearing) on July 27, 2018, after the emails were filed. At this hearing it came out that a customer stated in one of the emails that Mr. Calvert made the same false statements as in the emails. And multiple customers asked Ms. Baker to show them the order containing those false statements, and she referred them to Mr. Calvert. You would think when getting those calls, he would have discovered the fraudulent emails being sent to customers. But Calvert claims that he has talked to hundreds of creditors who were confused due to misinformation about court rulings at my site, and he presumably assumed they got the misinformation from me. Yet he has been unwilling to provide a single piece of misinformation at my site. Hmmm...

The Judge has stated outright that this has all the elements of fraud, and that it was at a minimum negligent misrepresentations. When asked about the customer that claimed Mr. Calvert repeated those lies -- which, if true, would suggest that Calvert was the true source of the lies -- Calvert's attorney (Mr. Gearin) said he called the customer, and the customer could not recall exactly what Calvert said (but said that if he wrote it, it could be true). Gearin made it sound like he never discussed this issue with Calvert. An attorney hears that his client made a fraudulent statement, and he checks with the source, but not his client? I'm not a lawyer, so maybe attorneys typically do not let their clients know that they are being accused of fraud.

And the question remains: Calvert says that he could produce 6 people who were on a conference call to testify regarding what he said about die ownership. How could his instructions have been so clear that he could have that many people testify, yet Ms. Baker still managed to get 2 false statements in her email?

Next: Ms. Baker had several customers ask her to produce the order from the court. She referred them to Calvert. If she did not know that her email was a lie, how could she not after getting those calls or emails? And did none of the callers bother to tell Calvert that they were referred to him through the employee? That's the first thing i would say if i were the customer ("Ms. Baker suggested I call you..."). And did Calvert tell these customers the truth? If so, why didn't they ask him why they were told otherwise? As has been said at several hearings, it just doesn't make sense.

Hearing Synopsis

August 4, 2018 8:55PM EST
August 6, 2018 9:50AM EST
There was a lot of information that came about as a result of the July 27 hearing (the audio is worth the time to listen to).

It started with the Judge admonishing NWTM for the "unusable" format of the 6,000 pages of emails. He pointed out that some emails were included 6-8 times, while many were email strings that would just end, leaving the Judge to wonder what happened next. He also pointed out that the timestamps don't make sense (something I suspected, but hadn't looked into).

The Judge then points out how half a dozen emails refer customers to Sierra Mint in regards to reordering if the customer had Chinese dies (Calvert had stated several times at the May 4, 2018 hearing that he was not aware of Paul Wagner's Sierra Mint having any intention of using Chinese dies).

The Judge then asks more about the wording of the fraudulent email the NWTM employee sent out. Mr. Gearin, Calvert's attorney, tried to make it sound like a mistake -- and even lashed out at the Judge for not believing it was a mistake ("I don't understand why you can't accept that a mistake could be made").

The Judge responds to Gearin by quoting the email where a customer says that Calvert told him the same lies that the NWTM employee sent in the emails. Gearin says that he called the customer, who now doesn't recall exactly what Calvert said, but if he put it in an email, maybe that is what he said. Neither Gearin nor Calvert denied that he said that; Gearin implies that he did not discuss this with Calvert. Note to self: Why would Gearin go to the trouble of calling the customer, but essentially say "I didn't talk to Calvert, maybe he was the source of the fraudulent statements"?

After discussing whether Calvert may have made the same fraudulent statement that was in the emails that were sent, Gearin segues into discussing the meeting where Calvert told employees about the die protocol. He does not explain how this is relevant to whether Calvert lied to customers.

Then Jenifer Baker, the NWTM employee who sent the emails, gets onto the stand. The Judge explains that the Trustee's actions look like actions of the court, that the Trustee is an extension of the Judge. So if Calvert says something confusing, people may take it as thinking that the court is confused, or at worse, perpetrating a falsehood.

The Judge pointed out that some people asked Ms. Baker to show them the made-up court order, and he asked what she did when they asked. She said referred them to Calvert. She pointed out that if nobody told her what she wrote was wrong, she would have no reason to "ask these questions" (which I take to mean asking more about the court order).

The Judge then asked Calvert if someone asked about a court order already determining ownership, why didn't he ask where they heard it? Someone must have told them. Calvert simply responded that he didn't know where they got their information from. The Judge points out an email a customer sent Calvert where he was upset at having to pay $300/die, and he included the erronous email, so Calvert had a chance to see the erronous email.

Calvert then started talking about the Monday morning meetings, and how he communicated very clearly at that point that they are not selling the dies (to which the Judge replies "not clear enough").

At 30:15, the Judge points out that he is not satisfied, and not sure what he is going to do. He talks about the 11 customers that got the erroneous email and paid for the dies, and got a refund on their credit card with no explanation, and how they would be wondering "What kind of clown show is going on here?", with the court being the clown show. He mentions the customer email sent to Calvert that included a copy of the erroneous email, and how Calvert had a chance to catch this.

Calvert then goes in with his attack on about.ag, starting by stating "So much misinformation with the about.ag website...". [Note to self: I need to correct this misinformation. Wait, I am unaware of any misinformation, and I emailed Calvert asking about the misinformation, and he has not responded.]

At 33:45, the Judge talks about having 6,000 pages of documents, and Calvert rudely interrupts saying "That you're having a hard time interpreting. What I would recommend...", at which point the Judge continues with "No, I'm having a very easy time interpreting. ...", and Calvert interrupts again. The Judge points out that he is going to send an order informing customers that the Trustee made misleading statements through his agent.

The Judge then points out that well after the erroneous emails were discovered, emails were sent out apparently trying to settle die ownership by coming up with a price and saying that it was the current price that the Trustee was willing to settle at, when it fact it was really just negotiations with a specific customer. So on June 22, one customer was told the Trustee was currently settling at $100/die, while another was told the Trustee was currently settling at $300/die. I cannot see how this misleading wording could not have come from Calvert (or at least with his approval). Calvert should have at least overseen the process. And if not, while I can see Calvert not firing a "not the best educated" (per Calvert) employee sending out fraudulent emails because "her heart was in the right place", wouldn't he after a second time? Like the original email, it just makes no sense.

At around 42:30, the Judge points out that he has further problems with the emails, but turns to the other matters at hand.

The Special Meeting?

August 5, 2018 1:25PM EST
Mr. Calvert and his attorney have several times mentioned a meeting at which Calvert told the employees what the Judge had ruled about the die protocol. Calvert referred quite a few times to the "Monday morning meeting."

But his attorney, Mr. Gearin, said that there were meetings with staff, and stated that it was at the May 31 meeting where Calvert told everyone he was not sell the dies, that they have not determined that the estate owned the dies.

So it sounds like there was a meeting on May 31 -- the day that Ms. Baker started sending the fraudulent emails, so it makes sense it would have been on May 31. My "spidey sense" was going off, and I checked: May 31, however, was a Thursday.

Did Mr. Gearin make a mistake in court in front of the Judge about the date? He didn't need to specify the date, but he did. The Judge is trying to get to the truth, and every mistake must be scrutinized.

In this case, Calvert repeatedly (at least 3 or 4 times) said that it was a Monday meeting where he told employees about the die settlement protocol. But his attorney is saying it happened on a Thursday meeting. If it was Thursday, why would Calvert have been so adament that it was a Monday meeting?

UPDATE 1 August 5, 2018 4:00PM: Jenifer Baker, the NWTM employee who sent the emails, started sending the fraudulent email before noon on May 30. So was there no meeting (did Mr. Gearin lie to the court?), or did Ms. Baker have a second chance to realize her mistake, or did I mis-hear Mr. Gearin saying "May 31 meeting"?

UPDATE 2 August 5, 2018 8:25PM: It looks like there was a special May 31 meeting. Mr. Gearin mentioned "settlement" several times when referring to the May 31 hearing. And sure enough, Ms. Baker changed her wording mid-day on May 31, from "The court has approved a fee for the ownership transfer in the amount of $300.00 per die" to "The court has approved the settlement for the ownership transfer in the amount of $300.00 per die." So there were two meetings at which die ownership was discussed, something that nobody told the court.

Paul Wagner's Sierra Mint Up and Running

August 4, 2018 7:05PM EST
In the audio of the July 27, 2018 hearing, the Judge refers to emails where NWTM refers customers to Sierra Mint. Sierra Mint is the company that NWTM President and CIO Paul Wagner started a few months ago.

I will have more to say about this in a separate post.

Dismantling Calvert's about.ag attack

August 3, 2018 3:30PM EST
The context: My understanding is that Calvert started talking about about.ag in response to why he did not ask creditors where they had heard the misrepresentations that his employee wrote.

"So much misinformation with the about.ag site about rulings that have been made and interpretation of those by a non-professional. Um. ... There is a number of comments about rulings made by this court on a site called about.ag. And the interpretation of those are done..."

He is claiming a lot ( "so much") of misinformation, specifically misinterpretation of court rulings. By me.

I go to extreme lengths to debunk myths, hoaxes, and misinformation, and I take great pride in sticking with the truth.

"... by a person that receives money for clicks, "

The implication is that I receive money for each site visitor, and by extension that I am doing this for money. The truth is that NWT Mint pages account for about 3% of the traffic to about.ag, and I make money only when people click on ads... which for NWT Mint pages generate under $50 a year. It is not uncommon for me to spend that much in a month just on court filings. [UPDATE August 4, 2018: The combined Tulving, Bullion Direct, and NWTM pages account for 32.7% of hits to the site, and $93.07 of ad revenue for 2017. There was no quarter in 2017 where I made more money from ad revenue on those pages than I spent on court documents via PACER] It would take 100 times the traffic to make the NWT Mint pages profitable enough to be a second job. I have never received a penny from any creditor, in this case or any other.

"and as a result I think we have a situation where there's a lot of misinformation out there and therefore I do get a number of confused people. A significant amount of confused people. You should see my phone records. I have hundreds of people I've dealt with in a very professional fashion, and I've resolved those issues to the people's satisfaction."

Huh. Is he just saying that over the past few years he has responded to hundreds of creditors (completely and utterly irrelevant), or is he truly suggesting that he has responded (at $400/hour) to hundreds of creditors misled by my site, without letting me know of errors? I can recall 2 times before this where someone reported misinformation on my site (aside from frequent typos; I cannot afford an editor!). One was legitimate: a company I accused of minor wrongdoing, because a bankruptcy Trustee stated so. That was fixed within an hour. The other time I was accused of misinformation was when Paul Wagner (President of Sierra Mint, an NWT Mint vendor, as well as being President and CIO of NWT Mint) called me, furious over my reporting of Sierra Mint. He repeatedly talked about lots of misinformation at my site, but could not give me a single example.

So, Mr. Calvert, the court has stated that an employee under your watch was responsible for "at least negligent misrepresentation", and pointed out how a customer claimed you repeated the same lies. Since you are blaming me for you not realizing your employee was lying to customers, could you please at least give some examples of "so much misinformation" at about.ag regarding court rulings?

[I will update this if Calvert responds to my email requesting examples of such misinformation]

UPDATE 1 August 4, 2018 7:00PM: A closer examination for 2017 shows that the combined Tulving, Bullion Direct, and NWTM pages accounted for 32.7% of hits to the site, with $93.07 of ad revenue attributable to those sites. In 2017, each quarter I spent more money downloading court documents on PACER than was received in revenue.

Audio

August 2, 2018 3:20PM EST
The audio from the recent hearing about fraudulent emails is available.

I will comment more on or before Sunday.

Matter Taken Under Advisement

July 27, 2018 4:05PM EST
Today was the hearing as to whether there should be sanctions for the fraudulent emails sent by NWTM. Although some of the focus was on one employee Calvert said made up the fraudulent statements, as I previously reported a customer claimed that Calvert made essentially the same statements.

I do not yet have any details about the hearing, except that the employee who sent the emails was present. Hopefully, the audio will be released.

For those that aren't aware, "taken under advisement" means that the Judge was not ready to make a decision at the hearing, and will make one later.

Calvert and the Fraudulent Emails

July 26, 2018 8:30PM EST
As I have written recently, the Judge in the NWTM bankruptcy case essentially accused NWTM of fraud, saying "This is as distressed as I have been in 3 years plus on the bench." At issue were emails that an employee sent to customers requesting the return of their dies. If both Calvert and the customer asserted ownership, the court authorized Calvert to negotiate a price for the dies; if no deal was made, a hearing would be held to determine who owned the dies. Instead, the emails falsely stated that the court determined that NWTM owned the dies and approved a $300 fee to transfer ownership.

Mr. Calvert's explanation was essentially that the employee was not highly educated, and made it up. The Judge asked if anyone had gone through other emails this employee sent out, and Mr. Calvert said that they had not. Maybe they should have:

One customer wrote to NWTM: "After our call I spoke with Mark Calvert. I understand the [dies] are on your desk ready to ship. Mark indicated that the price per [die] is $300 regardless of ownership, as dictated by the bankruptcy court." (the customer used the word "tools" instead of "dies", but was referring to dies). This email was sent on June 1, 2018, before word of the fraudulent emails got out. I think the email speaks for itself.


Change in Wording...

July 20, 2018 8:30AM
Later today NWTM should be filing some more details about emails that were sent.

However, I did find out this morning that the text was not the same in all emails that were sent. The one change I am currently aware of is that there was a change from "The court has approved a fee for the ownership transfer in the amount of $300.00 per die.", and was later changed to "The court has approved the settlement for the ownership transfer in the amount of $300.00 per die." This begs the question: who would change the wording like that, and why?

Wanted: Info on Die 'Email Fraud'

July 19, 2018 2:50PM
I am hoping that someone may have information on the email about dies that Judge Alston felt was fraudulent (see my previous post for the relevant text of the email).

The court shows who sent it, but I am hoping to find information on whether someone else wrote part of it, if instructions were given to the employee to write the email, or anything else that may be useful.

You can send information to me anonymously (or via E-mail) at the anonymous tips page.

NWTM E-mail "Made Up Out of Whole Cloth"

July 11, 2018 1:45PM
The NWTM employee wrote, falsely, "The court has determined that NWTMINT retained ownership of all NWTMINT dies created to produce coins, medallions or other products for customers. The court has approved the settlement for the ownership transfer in the amount of $300.00 per die". The Judge asked how the employee came to the understanding about the court determining that NWTM owned the dies. Mr. Neu said he spoke to the employee extensively, and asked her, and that she said she was rushed. The Judge asked Mr. Neu if she literally made it up on her own, and Mr. Neu said the employee told him she did.

We also know that Mr. Calvert instructed her "to make an initial settlement offer of $300/die."

What is interesting is that the notice sent to thousands of customers (approved by the Judge) stated "the Trustee believes that with limited exceptions, NWTM retained ownership of all NWTM Dies created to produce coins, medallions, or other products for customers." The employee wrote copied that nearly verbatim, substituting "NWTMINT" for "NWTM", changing "Dies" to "dies", and removing a comma. And changed "the Trustee believes that with limited exceptions," to "The court has determined that." Not just "cut and paste", but "cut, paste and edited." And no, in her declaration she did not state that she cut, paste, and edited someone else's words.

Hmmmm.

She was so rushed that she had to cut-and-paste the words from the legal notice, but had time to change "the Trustee believes" to "The court has determined that". And time to change what she felt were a few typos?

The other oddity is how she took the time to change "NWTM" to "NWTMINT." A quick Google search shows that nobody uses the term "NWTMINT". Why would an employee of many years change NWTM to NWTMINT? And would someone Mr. Calvert described as not being the highest educated person on the planet (but with a good heart) really think to remove a comma like that (both versions are grammatically correct)?

"The elements of fraud committed 74 times"

July 11, 2018 11:45AM
At the hearing on July 6, Judge Alston made it very clear that in his opinion, NWTM committed fraud on Mr. Calvert's watch. To be clear, this is not a legal determination of fraud (as far as I know), but it is about as close as you can get!

I highly recommend listening to the audio; it's about 12 minutes starting at 48:00.

When referring to the motion that stated that NWTM was sending emails erroneously stating what the court said, Judge Alston stated that "These are the elements of fraud". He said that the employee made a statement, that was false, that she knew or should have known was not true, to induce people to pay $300 to get their dies back, and a lot of people did.

Mr. Calvert countered by saying that he thinks the missing element of fraud is intent, and that if the employee had intent of fraud, he would have fired her. Judge Alston explained that with intent, usually nobody admits it, it is inferred -- and that it is pretty easy to infer intent from the email.

The Judge stated "This is as distressed as I have been in 3 years plus on the bench. Because it is not only a fraudulent statement, but a fraudulent statement attributed to this court." and "I'm concerned that this whole process is tainted. I don't know what else she has said. If she says this crazy stuff in an email, what you are telling me is that she made this stuff up, has someone reviewed the rest of her emails to other parties?".

This may help shed new light (and lend credibility to) previous allegations of wrongdoing at NWTM after the bankruptcy petition was filed.

Dies for Just Shipping Cost?

July 10, 2018 8:55PM
Over the past few weeks, court documents have shown that Mr. Calvert has given dies to customers for just the shipping costs, without requiring them to pay $300 each.

Even though the deadline for requesting your dies back was a few weeks ago, if you have dies that you would like back for just the shipping cost, I would urge you to contact Mr. Calvert.

Medalcraft to Buy Last Dies for $75,000

July 8, 2018 3:15PM
Chapter 11 Trustee Mark Calvert filed a motion to sell the remaining dies to Medalcraft for $75,000. Specifically, they would be buying the unclaimed NWTM dies in which no parties asserted an interest.

In typical fashion, Calvert has not specified how many dies this sale includes. Nor has any accounting been made in court records of all the dies.

UPDATE July 11, 2018 7:30AM: On June 21, 2018, just 15 days before this motion, Mr. Calvert filed a budget showing an expected income of $150,000 from Medalcraft for the dies. What happened?

Mediator Kornfeld: Replaced

June 28, 2018 8:05AM
Yesterday, NWTM filed a stipulation requesting that the court allow Lawrence R. Ryan be the mediator of what was the class action lawsuit by employees against NWTM for violating the WARN Act (not giving them 60 days notice before being terminated).

Previously, the two parties had requested Mr. Kornfeld be the mediator. I posted about it (on June 8, 2018 and June 15, 2018), showing his closeness to the case (e.g. he essentially brought Mark Calvert to NWTM, may have brought Calvert to his first (and only other major) bankruptcy Trustee position, he is representing the ANS that is paying $420K for dies that Medalcraft will own, now has the Assistant U.S. Trustee that started on the NWTM case working at his firm, etc.). I also let the WARN-side attorneys know about these strong connections to the case, but never heard back (as was the case when I offered them information when the WARN class action was originally filed).

The stipulation has one vague reference to Mr. Kornfeld, worded in typical NWTM-lawyer fashion. It mentioned that they sought Mr. Kornfeld, and then "Subsequently, it was determined that Mr. Kornfeld would no longer act as mediator for this dispute and the parties agreed upon Mr. Ream as mediator". Perhaps the WARN-side attorneys did read my e-mail after all, and it didn't get stuck in their spam folder. Very vague (and wrong: he never did act as mediator). Did Mr. Kornfeld say he would not do it? Did one of the two sides complain about the potential bias? Did someone ("it"?) determine that the Judge wouldn't approve Mr. Kornfeld as mediator?

New Budget Filed

June 22, 2018 8:20AM
Chapter 11 Trustee Mark Calvert has filed his second budget.

It hints at an expectation that the case will be wrapped up by the end of August. It shows $150,000 to be received from Medalcraft at the end of July for dies. It shows a "Clawback Claim" receipt of $1 at the end of June (which could be that Mr. Calvert identified someone to 'claw back' a payment from, but does not know the amount). It shows $61,517 of deposits to be returned to customers -- perhaps NWTM is doing the right thing, and returning money people paid for product they never received (after the bankruptcy petition was filed).

It also shows a $350,000 expected cash receipt at the end of June for "Store Inventory." Given Mr. Calvert's record of secrecy, we are left wondering if that is a guesstimate of when the inventory will be sold and for how much, or if a firm deal is in place awaiting court approval. It certainly is not being purchased by Sierra Mint, as Mr. Calvert stated to the Judge last month that Paul Wagner "has no desire to buy any assets from this estate." One has to wonder how someone with credentials such as Mr. Calvert can expect to get cash receipts of $350,000 from the store inventory in the next week unless a deal has been struck with someone and he is going to file an emergency motion with the court. Or maybe it is normal to produce budgets showing cash receipts well before they are expected?

UPDATE June 30, 2018 8:00AM: To be clear, the money being returned is not important. It is being returned to customers that placed orders after the bankruptcy was filed (in other words, they knew they were dealing with a bankrupt company, and they automatically get priority over people owed money from before the bankruptcy filing). It is also only $60K, which is only about 1/10 of 1 percent of what is owed creditors.

Medalcraft to Get ANS Dies... Maybe?

June 21, 2018 9:00AM
Every time a court document is filed, I have to decide whether to take the time and spend the money to read it. Occasionally, there is interesting information in the documents I don't get. That was the case here (thank you to the person who sent me the document).

Docket 1678-1 (filed May 23, 2018), is a contract between ANS and Medalcraft.

This contract essentially says that Medalcraft will move and store the dies for ANS, and in exchange for doing so, it gets to keep them.

ANS has 1 year to identify dies that it likes (presumably to use for limited-edition restrikes). Medalcraft cannot produce any products using any dies that ANS holds a copyright to. Medalcraft can produce products using dies for 'authorized customers'. ANS and Medalcraft will also try to identify 20% of the dies each year for 5 years to cancel and sell for scrap (which would get rid of about 2/3rds of the dies).

The odd part of the agreement is with sections 4(d) and 4(e). The consideration to Medalcraft for moving and storing the dies is in section 4(e), which basically says that they get to keep the dies when the contract ends (which Medalcraft could end in just over 5 years if they want). But Section 4(d) allows ANS to give 30 days notice at any point and get the dies back. So Medalcraft only gets their compensation if ANS doesn't take it away within the next 5 years. Or maybe if they do, Medalcraft will argue that ANS terminated the contract, which would mean that Medalcraft now owns the dies that ANS just took possession of.

UPDATE June 21, 2018 12:30PM: I was under the impression that docket 1678-1 was docket 1678 (the declaraction). I have removed comments I wrote suggesting that it was filed in error (which it would have been if it was docket 1678, rather than 1678-1).

NWTM False Claims, Part II

... Motion to Enforce a Prior Court Order

June 19, 2018 4:25PM
Today, a law firm representing a number of creditors filed a "Motion to Enforce a Prior Court Order." From the title, it means that somebody (allegedly) didn't do what the Judge told them to in a signed order. Oops!

In this case, it's pretty much what I wrote in my "NWTM False Claims" post: Calvert is allowing E-mails to be sent out claiming that the Court said things it did not, and trying to cheat (trick people into paying for dies they own, by lying and saying that the court said it was OK). Yikes.

There is an old expression "where there is smoke, there is fire." I interpret to mean that if you discover one bad thing happening, it is MUCH more likely that other bad things are happening there than in some other random location. And while some have referred to allegations of wrongdoing as a "crazy colorful conspiracy theory", this is at least the second time there has been a credible court filing showing that Mr. Calvert disobeyed the Judge (the other one being when he did not return dies that the Court ordered him to).

As a reminder: Medallic and NWTM are two separate companies. Medallic dies were already sold, so this issue only applies to NWTM dies. Mr. Calvert has "huffed and puffed" about how Medallic dies were owned by NWTM/Medallic, not customers. But NWTM dies are different, and in what appears to be all or at least the vast majority of cases, NWTM dies were owned by the customers. It appears that Mr. Calvert implied to the Judge that the Medallic view (that dies are owned by Medallic) applied to NWTM dies, which is false. Many salespeople would tell customers that dies were the property of the customer.

NWTM False Claims

June 15, 2018 4:25PM
In general, just about everyone (except the Trustee) agrees that [1] Medallic dies usually belong to Medallic (unless the customer arranged otherwise), and [2] NWTM dies usually belong to the customer. Chapter 11 Trustee Mark Calvert has done his usual job of obscuring the issue: he keeps referring to the "Medallic dies", rarely mentioning the NWTM dies, possibly making it appear to the Judge that the NWTM dies are owned in the same manner as the Medallic dies. The Judge, to the best of my knowledge, has made no ruling on who owns the dies.

The Judge signed an order allowing Mr. Calvert to settle die ownership issues, and that a hearing will be held on July 17, 2018 to "address claims of interests in or ownership of NWTM Dies of any party that has timely asserted its interest in NWTM Dies and has not settled with the Trustee prior to such hearing". So customers can [1] settle with Mr. Calvert, [2] assert ownership by June 21, 2018 (in which case their ownership will be determined at the July 17 hearing), or [3] relinquish any claims to the dies. Technically, another option is available (an adversary proceeding). The order allows Mr. Calvert to state that NWTM believes that NWTM owns the dies, but allowing customers to assert ownership.

However, I have heard that NWTM is sending out an E-mail stating, in part, "The court has determined that NWTMINT retained ownership of all NWTMINT dies created to produce coins, medallions or other products for customers. The court has approved the settlement for the ownership transfer in the amount of $300.00 per die." However, I have seen nothing in court records or hearings suggesting that the Court has determined that NWTM has retained ownership of NWTM dies -- in fact, the hearing is designed to tackle that issue! I also have seen nothing about the court approving any specific settlement at $300: it authorized the Trustee to settle, but the implication was that it was at whatever the Trustee and the customer agreed to. Think about it, how could the Court authorize the Trustee to settle something if the Court already determined the terms? That's an order, not a settlement. But I'm not a lawyer so maybe I am misunderstanding legal basics.

What is outrageous to me is that the E-mail being sent to customers who are proving die ownership makes it sound like paying $300 is their only option. However, customers have other options (as seen above), including [1] paying ANY other amount that Mr. Calvert agrees to, or [2] waiting for the July 17 hearing. NWTM appears to be misleading people into believing that they are being forced to pay $300, when that is not necessarily the case.

The worst part, however, is that Mr. Calvert is trying to convince the world something that appears to be completely untrue: that NWTM owns the dies. I have talked to many, many people involved who all basically say the same thing about the NWTM (as opposed to Medallic) dies: salespeople were told to tell customers that customers owned NWTM-created dies. As if it couldn't get worse, every $300 fee that is paid will end up going to Mr. Calvert and the other bankruptcy professionals, to help pay their bills, not to creditors.

$420K Sale of Dies to ANS Approved

June 15, 2018 3:05PM
Today the Judge filed an order authorizing the Trustee to sell the order dies to the American Numismatic Society (ANS), for $420,000.

Mediator Kornfeld, Part II

June 15, 2018 11:55AM
In my last update, I mentioned that NWTM is requesting Armand J. (Jay) Kornfeld to mediate the issue of a potential violation of the WARN Act (which was originally a class action lawsuit, that was since voluntarily dismissed). And that Mr. Kornfeld has significant connections to this case.

Yesterday, Mr. Kornfeld filed an unsigned order written by K&L Gates (who represents NWTM via the Trustee), and lists Kornfeld's law office as being the attorneys for the American Numismatic Society, and Armand Kornfeld himself (along with one of his partners) is representing ANS. In fact, Mr. Kornfeld was the one who filed the document with the court. ANS is buying the older Medallic dies from NWTM for $420,000.

WARN Class Action Update

June 8, 2018 5:20PM
In March, I reported that the WARN Act class action lawsuit was dismissed, for unknown reasons. This is in regards to Chapter 11 Trustee Mark Calvert shutting down the company without giving employees 60 days notice, which is required in many cases.

The case re-appeared yesterday, when Mr. Calvert's attorneys filed a motion for an order allowing Armand J. (Jay) Kornfeld to be the mediator of the dispute. If the mediation is unsuccessful, the plan is to file a motion for allowance of an administrative priority claim.

The odd thing about this is that Mr. Kornfeld and Mr. Calvert have interesting connections. For instance, I found out today that Mr. Kornfeld represented Meridian Mortgage Investors Funds II, V, VII and VIII, before Meridian Mortgage was forced into bankruptcy. Meridian is the other notable Chapter 11 bankruptcy that Mr. Calvert was Trustee of before NWTM (Meridian's founder/owner, Darren Berg, is now on the lam after escaping from prison). Mr. Kornfeld wrote that Meridian requested and suggested that the U.S. Trustee's office appoint a Chapter 11 Trustee. That Trustee turned out to be Mark Calvert.

Further, Mr. Kornfeld is the person who originally recommended that Mark Calvert assist Ross Hansen in reorganizing NWTM. And has been involved in "virtually every significant commercial fishing and seafood processing case filed in the Seattle area in the last 20 years" (Mr. Calvert runs a Seattle-based fishing company, and Mr. May is a veritable fishing magnate in Seattle; Calvert's fishing company is owned in part by a fisherman who Mr. Kornfeld helped in a personal bankruptcy before the fisherman was sent to jail for a $6M fraud). And the Assistant U.S. Trustee at the time of the NWTM bankruptcy filing, Thomas Buford (who presumably was involved picking Mr. Calvert), is now working at Mr. Kornfeld's law firm.

April Financial Report

June 4, 2018 1:45PM
Chapter 11 Trustee Mark Calvert has filed the April, 2018 Monthly Financial Report.

At this point, I don't spend much time going over the details of these reports, as there are others who are doing so.

It shows $380K of accounts receivable over 90 days overdue ($164K from before the bankruptcy, $215K since then), of which $298K is listed as uncollectible ($150K before bankruptcy, $147K after). It shows $5.1M owed the professionals. It shows that they are down to 9 full-time employees (from 10 last month), with about an average $58K salary.

It is unclear if the uncollectible receivables are legitimate (e.g. for goods people received), or illegitimate (e.g. money paid for goods that NWTM never delivered, like the golf medals). The reason for writing them off as uncollectible is age and "the hardship of collections with the knowledge that NWTM is closed".

NWTM Assets to be Re-Auctioned

May 29, 2018 7:50AM
The NWTM assets, which were originally sold to Industrial Assets to auction, but that Mr. Parish bought for $2.5M (financed by Mr. May), are now going to be auctioned off as originally planned.

Industrial Assets will be conducting the auction, but it is unclear exactly where the proceeds will go. This is done outside of the court, so there likely will be no records of how much everything sold for or who got the money.

Auction of Misc. Equipment

May 29, 2018 7:45AM
The Trustee has filed a motion to sell various property, including 2 vehicles, a gun safe, refridgerators, a telescope, a metal detector, and a WWII camera. A full list of what is being sold is in the declaration.

Trustee Bankruptcy Violations

May 19, 2018 2:30PM
Judge Alston filed a vacating order. He had previously filed an order allowing the professionals to automatically be reimbursed 80% of their fees after giving certain notice. This order essentially takes back that previous order.

In it, he writes "several Monthly Financial Reports ... filed in this case show the chapter 11 trustee repaid monies loaned to the estate by [his company Cascade Capital] ... without disclosing the loans and without obtaining authority from the Court to repay the loans, in violation of the Bankruptcy Code and the Bankruptcy Rules."

More on May 4 Hearing

May 18, 2018 3:30PM
The May 4, 2018 hearing was important, as it covered the Medallic sale to Medalcraft (approved) and the motion to convert to Chapter 7 (denied). And the Judge started asking questions of the Trustee.

The Judge asked Chapter 11 Trustee Mark Calvert if he knew anything about allegations that someone is planning to use the Chinese dies. Calvert stated that he doesn't know of anybody that plans to use the Chinese dies (other than Medalcraft in accordance with their agreement, which is an interesting story, as Medalcraft shouldn't have anything to do with the Chinese dies). He said "No, I have no knowledge of anyone who plans to use the dies in China." Calvert also stated that he cannot find a buyer for the ~$1M of store inventory (~$2M retail), which is made mostly from the dies in China.

Mr. Calvert stated that he has had "great discussion" with Paul Wagner, and that Mr. Calvert asked Mr. Wagner to "write a memo of his proposed activities post-employment" (which seems odd to me, as his activities during employment seem more important -- and because Mr. Calvert had apparently seen Mr. Wagner's business plan around 2016). Mr. Calvert states that Mr. Wagner has no desire to buy assets from the estate, and has no desire for any intellectual property. But he is looking at the possibililty of manufacturing items in China and selling them on the Internet or to other buyers.

The Trustee's attorney, Mr. Gearin, discussed allegations that metal was not properly inventoried, and pointed out how there is evidence and video of the inventory. Which is completely, utterly pointless, as Mr. Calvert has refused to release any of that evidence, which some have claimed shows that Mr. Calvert inventoried metal that he now denies NWTM has in its possession.Huh. In other words, 'Judge, those allegations are false. Why? Because we say so. Trust us, please.'

Phony Documents Filed

May 18, 2018 2:00PM
On May 10, 2018, there was a document filed with the court purporting to be written by Mr. Parish (who had purchased the NWTM assets with funding from Mr. May). I thought it suspicious, since it was written without an attorney less than a day after Mr. Parish had an attorney file a motion for him, and filed 6 days after the day it was written.

Today, Mr. Parish has used his attorney to file a declaration under penalties of perjury. He has stated that he neither filed that letter nor instructed anyone to, and did not write it.

Further, that leads back to docket 1469, an anonymous letter written by an NWTM employee. The letter appears to have been printed in a nearly identical manner to the phony document.

Who Lied, Mr. Gearin or Mr. Parish?

May 18, 2018 8:25AM
The day before the May 4, 2018 hearing, Mr. Parish filed a conditional objection (through his attorney) to the Medallic sale (he was concerned that some of the NWTM assets he purchased might be given to Medalcraft). At the hearing on May 4, 2018, Mr. Gearing stated that he spoke to Mr. Parish the night before, and that his objection was withdrawn.

I thought it was odd that Mr. Parish would file an objection the day before the hearing, and by that night withdraw his objection. But it got odder, as Mr. Parish filed a letter with the court (written by him, not his attorney), dated May 4 (the morning after the phone call where Mr. Gearin said he withdrew his objection). His letter, among other things, requested that the sale be denied.

This is one of the many, many things in this case that makes you go "huh?" Did Mr. Gearin really call Mr. Parish the night before the hearing? Did Mr. Parish really withdraw his objection the night before the hearing? Why did Mr. Parish have his attorney file an objection the day before the hearing, but file his own letter the morning of the hearing? I cannot come up with an interpretation of these events other than either Mr. Gearin lying or Mr. Parish lying.

May 18, 2018 1:45PM UPDATE: Apologies to Mr. Gearin and Mr. Parish. Mr. Parish has declared under penalties of perjury that he did not write or file that letter I referred to. Mr. Parish believes it was written by Ross Hansen, who had Mr. Parish sign it under false pretenses.

Trustee Misconduct and Bounced Checks

May 16, 2018 8:45AM
I previously reported that NWTM CEO Bill Atalla filed a motion attempting to get paid what he is owed. Remember, as an employee of NWTM (rather than a professional), he is supposed to be paid in the normal course of business (not requiring court approval, like the professionals).

The Trustee replied, admitting Atalla hasn't been fully paid yet, but claiming that the amount actually owed was quite a bit less.

Today, Atalla replied to the Trustee. He states, for example, "The trustee is seeking to benefit from his own misconduct" (e.g. that he failed to pay bills when due). Atalla also refers to having checks from NWTM bounce. What? I can understand NWTM not writing a check, but writing a check that bounces? How can you justify billing the estate over $1.5M (as Trustee and his accounting firm) when you are bouncing checks? Don't schools teach kids that if you do not have the money in your account, you simply do not write a check? And it was checks, plural. Not a simple one-time mistake.

Undercover Wire Recordings

May 15, 2018 3:50PM
Today, the Federal Public Defender's office filed a stipulated motion to delay the deadline for filing pretrial motions until January 11, 2019 in the criminal case against Ross Hansen and Diane Erdmann.

In the filing, it mentions that "this initial production includes but is not limited to ... undercover wire recordings." In other words, at some point in time, there were undercover wire recordings of Ross and/or Diane.

The Judge Grills Mr. Calvert, Mr. Gearin, Mr. Smith

May 11, 2018 1:25PM
As I previously mentioned, at the May 4 hearing, the Judge brought up the letters several of us wrote to the court.

The Judge mentioned a previous employee of NWTM, who had signed a declaration in support of the sale to Medalcraft. I had written that she now works at Medalcraft, and was the employee that Mark Calvert referred to when he wrote "[she] appears to be contacting customers of the estate and attempting to divert business to the competitor. The competitor’s violation of its nonsolicitation agreement with the estate may adversely impact operational results and give rise to actionableeeds.ges [sic] claims". I also pointed out that Medalcraft was the competitor in question. So were these allegations of mine "unfounded and unsupported" and "based on rumor and innuendo" as Mr. Gearin suggested of my allegations? When the Judge asked Mr. Gearin "Are those allegations all correct?", his first words were "It is true."

The Judge made it clear that he is concerned about the lack of full disclosure, and causes him to think something is being hidden.

Next, the Judge brought up the dies. Mr. Calvert admitted that he "relied on marketing material" for the past 2 years when referring to 400,000 dies. Calvert referred to 400,000 dies as a "Ross number", but the Judge pointed out that for 2 years Calvert has been using that number, even to justify fees for researching dies.

The Judge turned the floor to the Martin Smith, of the U.S. Trustee's office, regarding complaints about the Chapter 11 Trustee Mark Calvert. Mr. Smith decided to refer to colorful characters, indirect references to conspiracy theories, and allegations. The Judge then pointed out that these aren't just specious allegations. He said he has some grave concerns about the case, and is not pleased as being approached as "colorful characters" raising issues.

The Judge then pointed out some "regular payments" to Cascade Capital (Calvert's company). These payments aren't fraud: one example was reimbursement for a payment for an electric bill via a Cascade credit card (to speed up payment). But it isn't allowed. The Judge said "Mr. Smith, I hope you are taking notes. This is yet another problem. We talked about this in October. You did it before, I said you cannot do that. It doesn't matter if it is small."

"Crazy Colorful Conspiracy Theorists"

May 11, 2018 8:40AM
I obtained a copy of the audio of the May 4, 2018 hearing. In this post, I am going to focus on just one seemingly unimportant aspect of the hearing: the allegations of conspiracy theories. Basically, one of the members of the creditors' committee, an ex-member, and myself (along with a few others) wrote to the court with allegations of what has been going on.

The Judge brought up these letters, and proceeded to ask Mr. Gearin (the Trustee's attorney) a question related to them.

Later, Mr. Gearin referred to a small number of people, some of whom have no interest in the case, filing unfounded and unsupported allegations. He suggests they are all baseless, based on rumor and innuendo. Then another attorney twice referred to some creditors believing in conspiracy theories. The U.S. Trustee, Martin Smith, then jumped in the ring and said that this case "has many colorful characters" that go down paths "none of us would imagine are there." Hmmm.

The Judge then said that he hopes the U.S. Trustee's office won't just blow off the letters as "crazy colorful consipiracy theories."

We've got two things here. The letters contain a lot of allegations, which the Trustee's attorney is suggesting are false. And an attorney brought up conspiracy theories, which the U.S. Trustee seemed to agree with. The problem with the allegations is that some/many have already been proven true (in fact, when the Judge asked Mr. Gearin "Are those allegations all correct?" at one point sheepishly admitted that they were true). As for the conspiracy theory (defined as "covert but influential organization is responsible for a circumstance or event"), I don't like going into things like that. But since an attorney and the U.S. Trustee have obviously heard it, I think it is important to bring it up.

The conspiracy theory goes something like this (do not believe that this is all true): Mark Calvert and Ross Hansen got introduced in February, 2016, and conspired to work together in secret to benefit both of them. When a Trustee was going to be appointed, it couldn't be Mr. Calvert (due to his involvement), but Mr. Calvert brags about his "very special relationship" to the then-Acting U.S. Trustee Gail Geiger, who lets him do it (with a bit of help of Mr. Gearin, who conned some creditors into convincing the court to appoint a Trustee). Martin Smith feels that he has "clean hands" since he did not make the authorization himself. Calvert and Hansen acted as though they were enemies, yet conspiring all along, with Calvert shredding evidence that would put Ross Hansen in jail. Calvert would then intentionally cause the company to fail (e.g. ignoring real offers while accepting $10M offers from people who have no money, not firing the 'henchmen', and ignoring great proposals), allowing him and his bankruptcy professional buddies to rack up a ton of fees, Ross would get out of prison (or have minimal prison time, and later dig up his buried bullion), and Paul Wagner would get the multi-million dollar Chinese business. They would cause odd things to occur, like leak a rumor that the "Titanic" medal was stolen (and then returned!), to confuse people and make those looking into the truth seem crazy. And Mr. Gearin told his buddy Mark Northrup (the Unsecured Creditors' Committee attorney) not to remove Calvert as Trustee, so Mr. Gearin threatened UCC members who threatened to remove Mr. Calvert. Meanwhile, Medalcraft is funding Mr. Wagner's business, which is located in Dayton so that NWTM assets can easily be moved there. When anyone gets close, Calvert will threaten to send the FBI after them. And to top it off, the only other person Calvert has sent to jail, Darren Berg of Meridian Mortgage, escaped prison last December!

That's a fairly typical conspiracy theory: it mixes in a few facts with a lot of speculation, with the speculation part getting out of control, yet hard to completely disprove. People who want to believe it will focus on the true pieces, and believe the rest. But where it fails is that Mark Calvert and Ross Hansen aren't smart enough to pull off something like this together.

Note that none of the letters in any way refer to the conspiracy theory. So their comments about conspiracy theories were just meant to belittle those of us that had the courage to write in.

Chapter 7 Conversion DENIED

May 8, 2018 4:30PM
Judge Alston today denied Chapter 11 Trustee Mark Calvert's motion to convert the case to Chapter 7.

In the order, he also changed the requirements of NWTM's monthly financial reports to only require a balance sheet, income or P&L statement, statement of cash receipts/disbursements, and monthly bank statements.

Hopefully, Judge Alston will release the audio of the hearing (as he has for several other recent hearings).

Medallic Assets Sold to Medalcraft

May 4, 2018 5:10PM
Yesterday, Judge Alston signed an order authorizing the Trustee to sell the Medallic assets to Medalcraft.

I don't have further details on the hearing (hopefully the judge will post the audio), so I can't say how the judge handled some of the objections (e.g. that it is unclear exactly what assets Medalcraft is supposed to get, whether they get the NWTM dies and customer lists as well, etc.). No changes were made to the Asset Purcase Agreement.

I have also heard, but have not yet confirmed, that the judge denied the conversion to Chapter 7.

Major Hearing Today

May 4, 2018 8:30AM
Today, NWTM has a hearing to discuss 3 issues (at 9:30AM PDT):
  • Motion to Convert Case from Chapter 11 to 7
  • Motion to Sell Free and Clear of Liens (Medallic sale to Medalcraft)
  • Motion to Approve (I) Deadline to Assert Claims with Respect to Ownership of NWTM Dies; and (II) Settlement Protocol to Resolve Claims to Ownership of NWTM Dies
It seems clear that there is no chance of turning NWTM into a functional business, so I expect the motion to convert to Chapter 7 should be fairly straightforward (although there are objections to it). The main question is who the Chapter 7 Trustee would be, as numerous people have suggested that Mr. Calvert should not be the Chapter 7 Trustee, and there are questions as to how he was picked to be the Chapter 11 Trustee, and whether there were conflicts of interest. Mr. Calvert put it like this: if the court converts the case to Chapter 7, "the identity of the chapter 7 trustee will be determined in due course by the United States Trustee post-conversion.". Quite mysterious.

The Medallic sale is even bigger than the conversion, which is mostly just a technicality. There have been allegations that lots of material has already been shipped to Medalcraft, allegations that Mr. Calvert and Mr. Wagner authorized Medalcraft to request any dies their customers wants. There have been several objections to the motion, but perhaps the most serious being one that was filed late yesterday afternoon (less than 2 business hours before the hearing). It essentially asks (this is my wording) 'Please wait until there are more details on the Medallic assets and a full inventory of NWTM assets, or if you allow the sale, please do not allow any assets to be moved from Dayton or Green Bay until I can inventory them.'

This may end up calling Jerry Moran's bluff (Mr. Moran is the owner of Medalcraft): he has stated that if the Judge does not authorize the sale by the end of today, he will walk.

Finally, there is the issue of the dies: Mr. Calvert wants to charge customers $350+shipping for dies, but there is a lot of controversy around that (e.g. in many cases customers own the intellectual property, and in many cases customers own the dies and should get them for free -- which Mr. Calvert said he would do, but history shows that is a lie, as he refused to return dies to a customer where the court ordered the return of the dies).

More Details on NWTM Assets

May 4, 2018 8:10AM
Michael Parish, who bought the NWTM Assets, filed a objection to the Medalcraft sale.

In the objection, he points out that Copper Leaf LLC (one of Rodger May's companies, that handles investments) loaned money to Michael Parish in order to purchase the NWTM Assets from Industrial Assets. The purchase price was $2.5M, which would have given Industrial Assets an immediate profit of $550,000.

It confirms a report I had heard that Mr. Parish sent someone to NWTM's Dayton facility to inventory the items, and that Chapter 11 Trustee Mark Calvert NWTM would not allow him in. I had heard a report that the police were called, and that Mr. Calvert initiated an emergency teleconference with about a dozen participants, but cannot confirm that.

Mr. Parish objects to the sale because the NWTM assets and Medallic assets appear to be comingled either in Dayton or Green Bay. Mr. Parish "believes that there are numerous pieces of assets, supplies and other personal property that Medalcraft could obtain that are owned by him." Part of the issue is that the Medallic sale uses broad terms such as "tools associated with the making of Chains of Office and Maces" that are not specific enough to determine in all cases whether property would be part of the NWTM assets or Medallic assets.

Coincidental Connections

May 3, 2018 1:40PM
As I have recently written about connections between various people, I want to be clear that connections are not in any way supposed to indicate that anything sinister is going on. Yes, I *do* think that there are bad things occurring in this case (not necessarily illegal). But I don't want my readers thinking that just because two people are associated outside of this case means that they are up to something.

A connection between two people or organizations is almost always benign. Many of the lawyers in this case have worked with other lawyers in this case, simply because that is their job. For example, Judge Alston represented the creditors' committee of Natural Molecular Testing (one of Mark Calvert's other 2 cases as Trustee) as recently as June, 2015 (just before he became a Judge). And I've seen the last name "Hansen" come up a lot, and even "Erdmann" -- but they all seem unrelated to Ross and Diane. I even found a connection between the attorneys for The Tulving Company (California) and NWTM. And it's normal for someone to offer a share of their business to associates of theirs. And Northrup has represented fishing companies. These things just naturally happen.

That said, I do this because sometimes there are connections that do end up showing something potentially sinister (typically a conflict of interest). For example, I discovered that a victim of fraud (not NWTM) used 2 attorneys that the perpetrator had paid (not as a client).

I have written (and will write) about various connections, in most cases assuming they are benign, writing mainly because readers may find the connections interesting.

Something is Fishy in Seattle

May 2, 2018 10:05AM
This could also be called "strange bedfellows": a CPA (also a Certified Fraud Examiner and bankruptcy professional) starts a fishing company, then takes on another CPA (also Certified in Financial Forensics) as a co-owner. A bankrupt and about-to-be-disbarred-for-fraud attorney brings in 5 more people as owners (including himself), one who doesn't seem to exist, and another who was bankrupt then and now is in prison for being a "'financial predator' who stole millions from widow and partners". This book writes itself.

In 2009, Mark Calvert formed a fishing company: Northland Fisheries Group, LLC. He started as the sole owner, but in 2011, he had 8 other people join as owners, with a 9th joining in 2012. Some we know.

PersonPositionJoinedInfo
Mark CalvertPart Owner
Founder
2009Chapter 11 Trustee for NWTM bankruptcy.
Chapter 11 Trustee for $140M Ponzi Scheme.
Tod McDonaldPart Owner2011Did $225K of financial work for NWTM via Calvert's Cascade Capital.
Lead financial investigator for a $140 million ponzi scheme.
Bruce HullPart Owner2011Bankrupt when he became a part owner.
Disbarred in 2013 for embezzling over $100,000 from trust accounts of clients.
JM, BM, TM, DC, JBPart Owner2011Referred by, and using disbarred attorney for mailing address.
WWPart Owner2011Referred by, and using disbarred attorney for mailing address.
Name does not seem to exist in the United States.
Jody CannadyEmployee2011Did $115K+ of financial work for NWTM via Calvert's Cascade Capital.
Led the botched NWTM bankruptcy inventory.
Terry CosgrovePart Owner2012An expert in the fishing industry, that went to prison in 2017 for embezzlement.
(red indicates theft; yellow indicates the person used the services of the broke, disbarred attorney both before and after he was disbarred).

The member that joined in 2011, and appears to have brought on most of the other members, was an attorney. Unknown to Mr. Calvert, Mr. Hull was bankrupt (again; he also filed for bankruptcy in 1996). On March 10, 2011, his business bank account balance was $-25.43. On June 13, 2011, his personal bank account had a negative balance. In March through June of that year, the attorney got by by taking funds out of a trust account for one of his clients (by the end of June, the $80,000 in that trust account had dwindled down to $25.89). He also had other money issues going back at least as far as 2009; for example, he had a trust account for a client in 2009 that had a $-491.19 balance. He was disbarred in 2013. One wonders how he came up with the money be a part owner of Calvert's fishing business?

The rest of the owners as of 2011, aside from Calvert, his associate, and the disbarred attorney, were apparently referred to Calvert by the disbarred attorney. They used his address in 2011 (before he was disbarred), and kept using his address through the filing of the latest annual report. Presumably, the disbarred attorney had not pillaged their trust accounts.

That's bad, yes. But not as bad as it could be. Further digging shows that one more person joined as part owner of the company, in 2012: Terrance L. Cosgrove, who was well known in the fishing industry. He was still listed as a part owner as of June 20, 2017. The Seattle Times refers to him as a "'financial predator' who stole millions from widow and partners."

Mr. Calvert's Cascade Capital Group touts their maritime experience, which goes well beyond Northlake: "Cascade Capital Group is active in a variety of maritime-based industries, including commercial fishing operations in the Pacific Northwest, seafood processing and storage, construction of vessels, shipyard operations, maritime equipment construction, shipping, and logistics."

So Calvert and Cascade are fish experts. Let's look at some connections. Next, we look at Rodger May, who was the high bidder on the Medallic assets, yet Mr. Calvert was fighting to disallow his bids. Mr. May is a veritable fishing magnate: he claims that he "is both a pioneer in the fisheries world, and one of the most successful individuals in fisheries", currently the chairman and CEO of Northwest Fish Company, and oversees the management of $100M in assets. I'm wondering if Northlake Fisheries considers Mr. May to be a competitor of theirs? And does Mr. May know that Calvert is in the fishing business? Does Mr. May know that digraced Terry Cosgrove is a part owner of Calvert's fishing company?

One last piece of information: Terry Cosgrove (the guy behind the $6M fraud) filed for bankruptcy in September, 2010. His bankruptcy attorney was a man by the name of "Armand J. Kornfeld", who represents many people in the fishing industry. To make a long story short, he turns out to be the very same "Jay Kornfeld" that Ross Hansen was discussing bankruptcy with, who referred Ross to Mark Calvert. He has "developed an expertise in the commercial fishing industry, with involvement in virtually every significant commercial fishing and seafood processing case filed in the Seattle area in the last 20 years.".

Please note that connections between people do not in any way indicate any wrongdoing.

U.S. Trustee Connection

May 1, 2018 3:35PM
I started following NWTM and Ross Hansen in August, 2014. When I start following a company or an individual, I look deeply into their past, and all their connections.

With the first case I followed, The Tulving Company, I never even thought of investigating the Chapter 11 Trustee (who was a former FBI special agent) or the U.S. Trustee's office. When the NWTM case started, Martin L. Smith was the Attorney for the United States Trustee, and Thomas A. Buford was the Assistant U.S. Trustee. They have worked together on cases for at least 6 years, likely quite a few more. Mark Calvert is "wet behind the ears" with at being a bankruptcy Trustee; I can only find evidence of 2 other times he was a Trustee before this (Meridian in 2010, and Natural Molecular Testing in 2013).

Given the many allegations of what is going on, I figured I should look a bit more into connections behind the scenes, of people involved after the bankruptcy filing. I'm working on a post "Something Fishy in Seattle", and as I'm working on it, something odd came up.

On April 22, I wrote about how a Jay Kornfeld introduced Ross Hansen to Mark Calvert. So what did I find out? That Mr. Buford, the Assistant U.S. Trustee, quit in 2017, and went to work for Bush Kornfeld LLP, Jay Kornfeld's law firm. The same one that introduced Ross Hansen to Mark Calvert. Mr. Kornfeld once represented someone Mr. Calvert knows in a personal bankruptcy.

It is likely a coincidence that Mr. Buford ended up at Kornfeld's law firm. But for further coincidences, Mr. Buford is one of 8 faculty members of the King County Bar Association (for Continuing Legal Education). Of those 8, Ross Hansen used 3 of them as attorneys for the NWTM bankruptcy (J. Todd Tracy and Steven J. Reilly of The Tracy Law Group, and Alan J. Wenokur). The 2 attorneys for The Tracy Law Group withdrew because a Chapter 11 Trustee was appointed by the U.S. Trustee, and Mr. Wenokur withdrew because Ross Hansen no longer needed his services, presumably also because a Chapter 11 Trustee was appointed.

Can You See NWTM?

May 1, 2018 9:35AM
Someone sent me these pictures reportedly from an empty office building about 2 miles from NWTM's offices in Dayton, NV. I was hoping for something a bit closer up, where you could see what was going on. But I thought these pictures were worth sharing nonetheless, as those people that haven't been to Dayton don't quite realize how nice a view there is.

Possible Recourse: Washington State 'Tort Form'

April 30, 2018 8:55AM
I just heard from a creditor that let me know that he heard that Washington State has a tort form that you can fill out if you think that you suffered a loss as the result of negligent actions of a state agency.

So why might the government be responsible? The key here is that the Attorney General's office [1] basically allowed NWTM to operate owing customers millions of dollars (through the 2008 Consent Decree), and [2] seemingly ignored complaints all but shouting "NWTM owes customers millions of dollars!". One good example is the person who complained to the Attorney General in April, 2015, after NWTM had violated the 2008 Consent Decree. That alone should have immediately caused an investigation. But it gets worse: when the customer threatened NWTM that he would file a complaint with the Attorney General, NWTM advised him not to, saying that Ross Hansen would get mad and try to delay his refund as long as possible. If the Attorney General's office doesn't take action on a complaint like that, what complaints do they take action on?

I have no legal training, so I cannot begin to say whether or not Washington State may be liable; it is quite possible the statute of limitations may have expired. However, if you think that this may be an avenue worth pursuing, be sure to read my page on the Attorney General which goes into further details about their role in the NWTM fiasco.

Did Calvert Hedge?

April 29, 2018 7:25PM
Experienced bullion buyers know that dealers need to know whether or not hedge, and how much to hedge. If you don't hedge, you take on the risk of a market change.

In the case of Calvert-era NWTM (after Ross Hansen had the company file for bankruptcy), it seems like NWTM is taking on the risk. Specifically, the United States Golf Association paid NWTM $22,815 in November, 2017 for 1,300 troy ounces of silver. NWTM apparently never bought it (they refused to respond to USGA's request to get the metal, money, or medals back). So did NWTM hedge the price of 1,300oz of silver? I see no signs of NWTM doing any hedging, although with Calvert's inability to communicate with creditors, it is a possibility. But obviously Calvert did not properly account for the $22,815 if he cannot return the cash, metal, or the medals he was supposed to make.

Ross Hansen's Friend Buys NWTM Assets

April 25, 2018 4:35PM
In my previous post, I mentioned that I am going through the audio from the April 20, 2018 hearing.

In it, Mr. Neu (the attorney for Chapter 11 Trustee Mark Calvert) says that Mr. May was no longer interested in purchasing the NWTM/Medallic assets as of April 19 (which is odd, given that the Trustee was requesting the Court approve a sale to Medalcraft without mentioning whether Mr. May was still bidding).

Mr. Neu then said that Mr. May entered into an agreement with Industrial Assets (who bought the NWTM assets for $1.95M, and was planning to auction them) to purchase all the NWTM assets that Industrial Assets bought. Mr. Neu then said that Mr. May is financing this on behalf of Michael Parish who is Ross Hansen's friend.

Michael Parish was brought up in court before a few times, including at a recent hearing where it was mentioned that Mr. Parish was "trying to get his hands on the assets" via Mr. Hansen. He also appeared in docket 1110.

300,000+ Dies Lost

April 25, 2018 4:35PM
The Judge released the audio of the April 20, 2018 hearing. It regarded destroying documents, sale of Boy Scouts dies, and the protocol for selling dies to customers.

In it, the Judge asked "Let me ask, are there 400,000 dies, roughly?" Remember, both Ross Hansen and Mark Calvert previously referred to more than 400,000 dies (Mr. Calvert did in January of this year). Mr. Neu (the attorney representing Mr. Calvert) said that Paul Wagner recently did an inventory of the dies at Dayton, and identified 80,000 to 100,000 dies, plus there are an unknown number of dies located in China. I'll try not to ask about the inventory coming up with "80,000 to 100,000."

The Judge then asked about the ~320,000 dies that were unaccounted for, and the Judge believed they were in China, and Mr. Neu led him to believe that.

The catch is that the information I have shows that there are only around 26,000 dies in China. I'm guessing nobody thinks that there could be anywhere near 300,000 dies in China.

Most of the 300,000 missing dies were "junk" unrelated to coins (e.g. for jewelry), and had little value. But why did Mr. Neu not mention this at the hearing? And where did those 300,000 dies go? Did Mr. Wagner completely botch an inventory (which I highly doubt), or did someone get those 300,000 dies? And if so, who? And if so, why did Mr. Neu not tell the Court about it?

Of course, this assumes that the 320,000 or so missing dies are just the "junk" ones, and not important ones (NWTM/Medallic customers). But given that Medalcraft apparently said that there is only about a 50% chance that any given Medallic customer dies exist, it suggests that someone not only got the "junk" dies but also some valuable ones. Uh-oh.

Was Sealed Indictment Leaked?

April 24, 2018 4:25PM
The indictment against Ross Hansen and Diane Erdmann was signed, filed, and sealed on Thursday, April 12. It was unsealed on Monday, April 16.

On Saturday, April 14, I received an E-mail from someone who seemed disappointed that I had not yet written about the indictment of Diane Erdmann. I ran a search, and explained that there was no sign of an indictment, so if there was one, it was almost certainly sealed. I assumed that this person was simply mistaken. It never occurred to me that he might know of the existence of a sealed indictment.

Then the day after the indictment was unsealed, I heard from someone who claims that he heard about the indictment on Friday, April 13. This person claims to have heard it secondhand (he heard it from someone he trusts, who got it from someone with access to the sealed indictment -- whose identity I will not post here). Normally I would be willing to quickly dismiss such a claim (especially hearing about it after the indictment was unsealed). But not in this case. This source has been quite reliable with information.

So was the existence of the sealed indictment leaked? The only way that it could not have been is if both [1] The person hearing it on April 13 lied to me (or was lied to), *and* [2] The person who E-mailed me on April 14 was just guessing about the indictment or mistaken about it. As for #2, in the over 750 days since the bankruptcy filing, this is the only person who told me that an indictment had been filed (until it actually was, and was unsealed). The odds of someone happening to write that within the 4 days that the indictment was sealed seem very, very small.

Piercing the U.S. Trustee Bond

April 24, 2018 1:45PM
When a corporation owes money, the owners/shareholders are not normally liable for the debt. There is a legal term called "piercing the corporate veil", that in some cases allows people to go after the owners.

In a bankruptcies, the Trustee is usually required to post a bond "in favor of the United States conditioned on the faithful performance of official duties by the trustee or trustees." According to one bond issuer, the bond "works by covering a claim for fiduciary duty violations by the bankruptcy trustee. These violations may include theft, misappropriation of funds or property, misrepresentation, and so on."

Before I get accused of suggesting that Mr. Calvert is involved in such activities, I am bringing this up because the lawyer for one creditor stated to Mr. Gearin (the Trustee's attorney) a few weeks ago that he is prepared to "seek relief... which may include... a proceeding on the Trustee's bond." This is due to a creditor paying money in late 2017 for silver for medals, never receiving the medals, the silver, or their money back.

If this were to happen, it sounds like it would involve an adversary proceeding (like a "mini lawsuit" within the confines of the bankruptcy proceedings), making it a somewhat more difficult (and costly) procedure than simply filing a motion.

The original bond was set at $300,000, increased to $750,000, increased to $1.2M on July 5, 2016, and increased to $2M on August 23, 2016. In the March, 2017 Monthly Financial Report, Mr. Calvert stated that "Trustee increased the bond for the large cash inflow", but did not state how much the new bond is, nor has it been reflected in court records yet.

UPDATE April 28, 2018 7:25PM: The new bond is set at $3M.

Did Calvert Overbill? Did Cascade Underbill?

April 22, 2018 6:50PM
Looking at the July, 2017 Monthly Financial Report, the income statement shows a total of $457,275 in "Trustee Fees" billed from April, 2016 through July, 2017.

Comparing this to the Trustee's application for compensation, we see that "the Trustee incurred a total of $602,160.00 in fees during [April 2016 through July 2017]".

The first thing I note is that the monthly fees in the income statement exactly match the application for compensation for July, 2016 and March, 2017. This helps show I've at least got the right category.

The next thing is that for many months the income statement shows a flat $30,000 fee. For example, in April 2016, the income statement shows $30,000 for "Trustee Fees". Yet he billed $52,780 on the application for compensation. To the untrained eye -- in this case, meaning anyone who hasn't been given information leading to where the missing $22,780 appears on the income statement (if at all) -- it appears as though either Mr. Calvert "guessed" how much he would charge when preparing the statement (and never corrected it), or included the extra $22,780 in some other category.

Note that the discrepancies aren't limited to where Mr. Calvert entered $30,000 for his fee: for example, in April, 2017, the income statement shows $21,920, but he billed $24,640.

The billing for Calvert's Cascade Group is similar. The income statement shows $883,852 billed for "Cascade Capital Group Professional Fees", but they only billed for $819,579. For most months, they billed less than the income statement showed. But in November, 2016 the income statement showed -$37,118 (perhaps Cascade provided a discount?), but Cascade billed $26,230. And in December, 2016, the income statement showed $103,730 in Cascade fees, but Cascade only charged $18,096. Huh.

Isn't the point of the U.S. Trustee requiring accounting reports so that people can understand the profitability and other financial concerns of the debtor? How can you do that when there are apparently guesstimates and overcharges and undercharges?

How Mark Calvert Became Chapter 11 Trustee

April 22, 2018 1:40PM
Since early on, I've wondered how Mr. Calvert became the Trustee. I found it odd that he was hired, given his high-school level of accounting sloppiness (note to self: if I get sued for that, I need to re-read my "accounting nightmares" posts). I've discussed it a bit, but found out a lot more today.

It sounds like Mr. Calvert first became involved at the suggestion of Jay Kornfeld, an attorney that Ross Hansen was using in February, 2016. Ross met with Mr. Kornfeld on February 26, 2016, and Mr. Kornfeld suggested that Mr. Calvert become involved in the discussions. On March 1, 2016, a full month before the bankruptcy filing, Mr. Kornfeld discussed the NWTM situation with Mr. Calvert. Ross first met with Mr. Calvert (along with Mr. Kornfeld) at NWTM on March 5, 2016.

Mr. Calvert and his firm reportedly prepared a number of documents related to restructuring NWTM, including detailed "to do" lists, projected cash flow statements, staff reduction plans and timelines.

This goes beyond what was originally known.

DateDescription
Feb. 23, 2016$38M defamation verdict in Cohen case
Feb. 26, 2016Mr. Kornfeld suggests to Ross that Mr. Calvert become involved in discussions
March 1, 2016Mr. Kornfeld discusses the case with Mr. Calvert
March 5, 2016Mr. Kornfeld, Mr. Hansen and Ross meet at NWTM
March 14, 2016"[Cohen's] counsel has also been advised ... NW Mint has dissolved all of the metals they are holding for clients to fill orders and there is nothing left in NW Mint’s vaults"
March 18, 2016Domain 'existingbullionorders.com' registered
March 18, 2016Ross pays Hannes Tulving's criminal attorney a $25,000 retainer. The funds come from cash that Diane deposited earlier in the day
March 25, 2016Mr. Kornfeld advises Ross that Mr. Kornfeld and Mr. Calvert will not proceed. The reason for this is unknown.
March 25, 2016Ross contacts Tracy Law Group to handle NWTM bankruptcy.
March 26, 2016 and
March 27, 2016
Ross and Diane reportedly enter the NWTM vault and remove metal.
March 31, 2016$150,000 of funds are wired to Tracy Law Firm as a retainer for the bankruptcy filing. The hiring requires that Elliott Bay Asset Solutions be the CRO.
April 1, 2016Bankruptcy petition filed
April 5, 2016Ross' attorney files motion to hire Bill Weisfield of Elliott Bay Asset Solutions, LLC to be Chief Restructuring Officer
April 5, 2016Mr. Gearin communicates with Tracy Law Firm about objecting to hiring Mr. Weisfield as CRO, apparently as Mr. Calvert's personal attorney.
April 6, 2016Mr. Cohen files an objection to the motion to hire Mr. Weisfield
April 6, 2016U.S. Trustee files an objection to the motion to hire Mr. Weisfield
April 6, 2016Mr. Weisfield withdraws from consideration
April 7, 2016 9:30AMHearing on appointing a Trustee.
April 7, 2016Judge Alston signs order that the U.S. Trustee will appoint a disinterested person to serve as trustee.
April 8, 2016 3:10PMU.S. Trustee requests the Court to allow Mr. Calvert to be the Trustee.
April 8, 2016Mr. Calvert signs acceptance/declaration: "I met with representatives of the Debtor to discuss whether my firm, Cascade Capital Group, would be engaged to provide restructuring services to the Debtor. I met with the Debtor's principal Ross Hanson. After meeting with Mr. Hanson [sic], my firm declined to undertake the engagement. Neither my firm nor I were paid any fees by the Debtor. Neither my firm nor I have any relationship with the Debtor or Mr. Hanson."
April 9, 2016 or
April 10, 2016
FBI calls Mark Calvert to discuss NWTM.
April 11, 2016The Judge allows Mr. Calvert to be the Trustee.

Scheme To Prevent Bids for Medallic

April 22, 2018 12:15PM
From the looks of it, NWTM and/or Medalcraft came up with a nifty scheme to ensure that Medalcraft would get the Medallic assets. Part I: Move part of the value of Medallic to Medalcraft, Part II: use a "poison pill"-like strategy with a bogus threat to walk if the Judge doesn't approve the deal the day of the hearing.

In August, 2017, NWTM was furious at Medalcraft, threatening legal action. Somehow, though, by February, 2018 NWTM and Medalcraft were nice and cozy, and Medalcraft put in a "stalking horse bid" (a normal bankruptcy process, a guaranteed bid before an auction). After Medalcraft was outbid, NWTM cancelled the high bid from the qualified bidder as unqualified, and announced Medalcraft the winner -- but the Judge ruled that wasn't fair. Odd things then happened, such as NWTM offering to let Medalcraft pay less to be fair, Medalcraft offering to pay more to be fair, and the high bidder offering more to become qualified. Somehow, though, the high bidder backed off (why would the high bidder back off?), and NWTM again considers Medalcraft the high bidder. NWTM has approached the Court to approve the sale.

This time, though, it's a bit different. They are pretending it is an arms-length transaction, with Chapter 11 Trustee Mark Calvert pointing out that Medalcraft will walk away if the Judge does not approve the sale the day of the hearing. But things have gone further, with Medallic telling customers that Medalcraft now has the die information, Medallic referring customers to Medalcraft, and Medallic even shipping dies to Medalcraft. Medalcraft even appears to have been given the Medallic customer list. For every customer Medallic refers to Medalcraft and every die they send to Medalcraft, the value of Medallic goes down further, reducing the value to other potential bidders if the Court does not approve the sale.

Now, I'm sure that Calvert would say this is an arms-length transaction. But how in the world can it be? In an truly arms-length transaction, Medalcraft would be treated almost exactly the same as other bidders (the exception being that they were the stalking horse bidder). But Medalcraft has gotten NWTM employees, Medalcraft has violated their non-solicitation agreement, Medallic has sent business to Medalcraft, Medallic has sent dies to Medalcraft, and Calvert is pushing Medalcraft's bogus threat to walk away (Calvert is "concerned" that Medallic will walk if the peak season is over, but Medalcraft's threatened "drop dead" date is after the peak season is over). Did Paul Wagner chat about his personal business with other bidders? Did Calvert treat Mr. May the same way? Did Calvert treat other bidders (such as the one who put down a $100K deposit, only to have Calvert accidentally sell some of the assets he bid on) the same way? From the facts -- mostly hidden from the Court -- it does not seem like an arms-length transaction.

Added: 'Threat Level'

April 22, 2018 8:30AM
I have just added a 'Threat Level:' line in the summary section above the top post (the lines in [brackets]).

To be clear, I have not received any threats regarding NWTM. However, given that multiple people in the case have been accused of threatening people in various ways, the escalated nature of this case, and that much of what I write doesn't sit well with the people I am writing about (it's the nature of what I do), I need to be aware of the potential of receiving threats.

The 'Threat Level' above is a failsafe of sorts, in case I am threatened in a way that I feel compelled to either stop writing about NWTM or receive a threat that I don't feel comfortable writing about (e.g. a threat from a lawyer that says they will take legal action if I mention the threat). I will try to occasionally update the date there (perhaps every few days). If it has been a long time since the date was updated, it is a sign that I may have received some sort of threat that I do not feel comfortable writing about. This way, if I am forced not to write about a threat, that fact will come out.

In a different case I follow, I did receive a lengthy draft complaint, and it isn't at all fun, especially when I don't get paid for my services. But I do not cave in to frivolous legal threats.

That said, if I *do* receive some sort of threat, including any threatened legal action, I will do my best to publish it here. I do not in any way consider myself to be above the law, and I do my best to ensure that my writing does not violate any laws or ethics. If I do something illegal, it will have been by mistake, but even so, I should be judged appropriately. Given what I have seen going on, I feel that a policy of immediately publishing any threat is best to help avoid receiving any.

If you feel that I have written something defamatory (remember, "defamatory" almost always means something that is not true), please feel free to contact me. I will treat the issue with the same urgency that you do. The only time I am aware that I wrote something actually defamatory (by mistake), I was notified quickly and had it removed within an hour of the E-mail being sent to me (minutes after I received it).

Busted: Yes, NWTM is Sending Dies to Medalcraft

April 21, 2018 5:40PM
I previously reported that I wrote a letter to the Judge (something I have never done before). One of the lines was "I have heard a credible report that some dies have been shipped from NWTM's location in Dayton to Medalcraft, in anticipation of the sale." That's something that I did not feel comfortable posting here, since I could not prove it (unfortunately, I do not have a team of hackers to assist me, just the occasional kind soul that leaves an anonymous tip).

Today, however, I received evidence that proves that NWTM is shipping dies to Medalcraft. Yet another "rumor"/"allegation" proven true.

So, Mr. Calvert, are you playing fair and shipping dies to other bidders as well? Are you charging Medalcraft the $300+shipping that you want to charge previous customers?

You would think that would be enough news for a single post. But I also wrote to the Judge "given that Mr. Calvert appears to have sold items twice, we need to make sure he doesn't give away the NWTM dies by mistake." Remember, Medalcraft is waiting approval to buy just the Medallic dies ("Medallic Company owned Dies" from the past 20 years). Maybe Mr. Calvert feels it's OK to jump the gun on the sale to Medalcraft. But certainly he wouldn't send NWTM dies to Medalcraft, right? The evidence I received shows that NWTM dies are indeed being sent to Medalcraft, too. Those are property of the estate (or customers) that Medalcraft hasn't even expressed any interest in. So why is Medalcraft getting those dies?

CEO Asks Court For Payment

April 21, 2018 9:30AM
Bill Atalla, the CEO that the Trustee hired, was terminated on December 29, 2017 along with other NWTM employees.

His situation was a bit different, in that he was hired with court approval, with a clear employment agreement. He has filed a motion with the court to get paid his severance, pay for time he spent working after his termination, vacation pay, and some other misc. items.

It would be interesting to see what would happen if all the other employees did the same. I imagine it wouldn't make sense for most employees to pay an attorney to pursue it, and the class action lawsuit regarding the WARN act was voluntarily dismissed (for unknown reasons), but it would certainly be interesting to see the Trustee's reaction.

Atalla also filed an objection to the conversion to Chapter 7. The best line comes after pointing out that the $50M of creditors and the debtor would not benefit from a conversion to Chapter 7, when he writes "So who will benefit from conversion? Only the trustee and his professionals."

More on Die Sales

April 21, 2018 9:00AM
The Trustee filed the March, 2018 monthly financial report, which I have been going over.

True to form, the Trustee makes a vague statement about the dies: "The Trustee has confirmed the dies available for sale, for which there are 3 different offers for different types of dies. Provided the Court approves the protocol for these sales, the sales are anticipated to be complete in April."

Again, "Huh?".

The first piece is that these sales cannot all be completed in April. There is a hearing on May 4, 2018, to see if the Medalcraft sale goes through, which includes the recent Medallic dies. How can the Trustee expect to complete the sale before the Judge approves it? And how can the Judge approve the sale of other dies in just 6 business days when Calvert hasn't even filed a motion about them yet?

Next, there has been confusion since the beginning about the quantity of dies, how many have no value to a mint (e.g. the jewelry dies), whether the Chinese dies are included, how many may have already been sold (e.g. if the Tomball sale ended up including any), the exact (or approximate) number of each type of die, and whether any have been shipped to other mints without the knowledge of the court. This new statement just adds to the confusion.

The Trustee so far as only really mentioned one set of dies: the dies he wants Medalcraft to have ("Medallic Company owned Dies... associated with any customer for which there has been a sale within the past 20 years."). So unless the Trustee has changed things, there's that. That would leave (if memory serves): [1] NWTM dies (e.g. the dies that NWTM had made in-house for many years), [2] Older Medallic dies, [3] Chinese dies (located in China, around 26,000 of them), and [4] "Junk" dies (e.g. jewelry dies).

The Trustee also took a $100K deposit on an offer that included many (perhaps all) of the Medallic dies, but I'm assuming that deal is done (the Trustee accidentally sold assets that were to be included in that sale). As of March, the Trustee was also expecting to sell older Medallic dies to "NY Numismatic Assoc". But who is he planning to sell the NWTM dies to? There has been zero mention of those dies. Perhaps Sierra Mint?

Where Are Sales Coming From?

And Why Bank With Texas Account?

April 20, 2018 5:25PM
Today, the Trustee filed the March, 2018 monthly financial report.

It shows $153,605 of Core Operating Sales in March. The inventory sold was valued at $45,000 (exactly the same as February), with total costs of goods sold of $99,171 (inventory cost, labor, etc.).

The catch is that NWTM is shut down, with the NWTM website no longer taking orders, and Medallic is referring people elsewhere. Where is this business coming from?

One reader pointed out that NWTM is still selling inventory on Amazon, and that they have 596 items for sale (accounting for thousands of items, as many have 10+ in stock). Many/most/all are fulfilled by Amazon, which means that Amazon has them in their possession (does this inventory appear in court documents?). But it appears that Amazon orders only accounted for about $4,000 of that $153,605. So that doesn't cover much.

The descriptions of receipts of money simply show "Custom Customer." But from everything Chapter 11 Trustee Mark Calvert has said, it sounds like Medallic did the custom minting. And Medallic isn't accepting more orders from what I have seen. So it sounds like this is actually the Chinese business (which did custom orders). But where are these orders coming from?

And to add to the confusion, the accounting appears to be a bit wonky: it shows Amazon, PayPal, wire transfers and a few other similar payments going into the general operating account (8106) as expected. But on February 16, 2018, a $40,000 transfer was made from the general operating account (8106) to the "Texas Sale Proceeds" account (8122) that had been dormant for months. They then started depositing checks into that Texas account, and even the $195,000 deposit for the NWTM assets was wired from K&L Gates (the attorney dealing with escrow) into that account. Then they would transfer funds that had come into the general operating account into the Texas Sale Proceeds accounts, and pay some bills from each account. Huh.

UPDATE April 21, 2018 9:20AM: One person believes this money may be from "collections" -- NWTM trying to collect money owed from past invoices, and/or payments for orders that were placed (but not paid for) before the websites shut down. Another believes this is for coins to wholesale buyers.

"...for the Trustee to either sue all former customers"

April 19, 2018 8:35AM
The Trustee filed a response to some objections to his proposal to sell the dies for $300 each plus shipping.

He makes a number of good points (e.g. that the dies need to be out of the Dayton facility by June so they need to be gone by then, and that while the price would seem astronomical before the bankruptcy, the price factors in the legal fees and such). However, at the end, he writes "It would be extraordinarily burdensome, expensive, and time consuming for the Trustee to either sue all former customers to resolve the issue of ownership..."

I'm not sure why he would contemplate the idea of suing all former customers of NWTM (including that guy that spent $10 to buy a medal in 2008, that doesn't even know what a die is, and isn't owed any money). Maybe it is just my lack of legal training, and it is normal for a Chapter 11 Trustee to consider the possibility of suing all former customers.

NWTM Asset Auction Surprise: Bought In Whole

April 18, 2018 2:30PM
A company called Industrial Assets, d/b/a BidItUp, bought the NWTM assets for $1.95M in March, which we knew about. They were planning to auction to equipment (which they valued at over $5M) on May 2, 2018.

The surprise came within the past few hours, when the website changed, and now states "AUCTION CANCELLED • FACILITY SOLD IN ITS ENTIRETY". Presumably, someone came in with an offer for all the assets, that exceeded what BidItUp felt it could reasonably expect in the auction (somewhere well over the ~$2M they already invested). Why else would BidItUp cancel the auction?

So now it is time to report a rumor I had heard 2 days ago: that Ross Hansen had a "big deal" in the works, that he had found some investors (as he so often seems to), and repurchased NWTM in part or in whole, and that it would happen this week. I also heard that he asked the court on Monday for permission to travel to Nevada (where the NWTM assets are located), as early as yesterday.

From the reports, it sounds like Ross Hansen may have purchased the NWTM assets. To be clear, this only includes assets that were already sold (e.g. not the dies, inventory or Chinese business). Since BidItUp already bought the assets, this is happening outside the courtroom, so the records likely will not be public.

Executed Arrest Warrant

April 18, 2018 8:25AM
To help remove any doubt, here is a copy of the executed arrest warrant. This is the form that shows that Ross Hansen was ordered to be arrested (in this case, he self surrendered).

Pleading Not Guilty, Public Defenders

April 17, 2018 3:20PM
After going through what must have been dozens of lawyers over the past few years, some paid in cash and others bullion, Hansen and Erdmann have been assigned public defenders. Ironically, they made a sworn financial statement that they are "financially unable to retain counsel." The irony is that Ms. Erdmann claimed that she was effectively destitute (her attorneys' words), and then came up with $700K of bullion to pay legal bills. Mr. Hansen was assigned Jennifer Elizabeth Wellman and Dennis Carroll, and Ms. Erdmann was assigned attorney Michael G Martin.

Both Hansen and Erdmann pleaded Not Guilty. A jury trial is scheduled for 6/25/2018 at 09:00 AM

Further Arrest Details

April 17, 2018 8:40AM
I have heard that Ross Hansen and Diane Erdmann have not been detained, but were allowed to self-report to their initial appearance, which was yesterday at 2:00PM.

Although the court has not yet released details of bail, I have heard that they were both released without bond, on their own recognizance (essentially a promise to show up for court appearances). I have also heard that they are restricted to travel only in the Western District of Washington, although some exceptions may be made.

This information does not come from the court, but I believe it to be from a reliable source.

UPDATE April 17, 2018 3:10PM: I have confirmed this information. Hansen and Erdmann are also required to surrender any passports they may have. They also "must not harass, threaten, intimidate, tamper with, improperly influence, or injure... victims of crime."

Ross Hansen and Diane Erdmann Arrested, Indicted

April 16, 2018 8:05PM
On Thursday, April 12, 2018, the U.S. Attorney filed an indictment (criminal case 2:18-cr-00092-RAJ in the Washington West District), against Ross Hansen and Diane Erdmann. They were arrested today, and the case was unsealed today. They were charged with 10 counts of wire fraud and 10 counts of mail fraud.

[Please remember that everything stated here is an allegation, not necessarily a fact]

It states that "Although Hansen and Erdmann fulfilled some standard bullion customer orders, these orders were fulfilled by using money from newer customers." It states (as we knew) that the fraud was similar to a Ponzi scheme. It also points out the now-infamous "it is our policy to ship orders promptly after you have properly paid us" notice on the website. It says that starting around 2015, NWTM sent out E-mails fraudulently stating reasons why orders would not be timely delivered, such as "due to unprecedented demand."

It further refers to the term I uncovered, the "drop dead" date, that was used internally. It points out, as I have, that many orders were not shipped by the "drop dead" date. It goes on to say that Diane Erdmann "intentionally fulfilled some standard bullion customer orders with the wrong type or brand of bullion". It states that "more than half of the silver bullion orders over $5000 placed in January 2015 were not fulfilled until August 2015 or later."

It states that Diane Erdmann specified that smaller orders be filled first (which makes sense, as it results in fewer people complaining). It states that 93% of the dollar value of silver orders in 2015 were not shipped within the required 10 weeks. It states that Diane "Erdmann also prioritized fulfilling orders where the customer had threatened to file a lawsuit or to contact the authorities." It states that NWTM employees (at the direction of Mr. Hansen and Ms. Erdmann) regularly lied to customers regarding delays, including telling them that NWTM had to fulfill government contracts or because the U.S. Mint was not producing certain products.

It states that Hansen and Erdmann "fraudulently inflated the amount of precious metals inventory in the enterprise software to allow additional sales to be entered into the system." It points out that storage metal was used to fulfill customer orders, and that employees referred to it as "borrowing" or "pulling" from storage (as opposed to the term "poaching" seen on some storage boxes). In some cases, the storage metal was never even purchased.

It states that multiple employees asked for inventories, and Hansen and Erdmann refused.

It mentions that Pan American silver, which had consigned 75,000oz of silver to NWTM, requested the silver back around September 30, 2015, and was told they would get it back in installments from February 2016 to June 2016 (they never did return any of the metal, nor did they have any allocated to Pan American).

It states that Hansen and Erdmann took owners' draws of over $1,000,000 from 2012 to 2016. It also mentions the $700,000 of metal that they sold for attorney expenses.

Information in the filing suggests an investigation that started in 2014.

References: Indictment, Order issuing bench warrant, Department of Justice news release.

Epic Trustee Fail

April 14, 2018 11:55AM
Imagine sending a bank wire to NWTM for $22K for silver to be delivered in about 8 weeks, not getting it, and having nobody respond to your requests, hiring a lawyer to send a demand letter, and still getting no response.

This sounds like 2016 when people were yelling "That damned Ross Hansen!" But in this case, it happened a few months ago, and it should be "That damned Mark Calvert!"

The United States Golf Association, USGA, paid $22K on November 16, 2017 for silver for medals that NWTM was going to make for them by January 5, 2018. But NWTM apparently never even started working on the metals. On December 21, 2017, a week before the company shut down, NWTM even sent an invoice to make 2 more dies. The USGA never received the medals or the dies.

How in the world can Mr. Calvert shut down the company, laying off 100 employees, yet keep paying a skeleton crew to purportedly finish up business, but not finish orders NWTM already promised customers and taken money for? Apparently it wasn't profitable enough. Mr. Calvert wrote in February "The Trustee has completed certain profitable work in progress after the closing of the plant with the skeleton crew that remains employed in connection with the winddown and liquidation efforts of the estate." In fact, NWTM took in $405K in January and $158K in February for "Core Operating Sales". Presumably the USGA medals just weren't profitable enough to finish. Or return the money for. And not even profitable enough to justify a phone call to let them know they weren't going to get their order.

If NWTM took in well over $500K since the company shut down, and couldn't even complete a $900 order (part of that $500K, for 2 dies), how much of that $500K is money that NWTM took in and did not find profitable enough to make or return the money for? How many new creditors are there since Mr. Calvert took over?

Can Mr. Calvert have NWTM file for Chapter 11 bankruptcy... again? Creditors can force companies into Chapter 11 bankruptcy... but can they force a bankrupt company into bankruptcy?

Did NWTM know it could not deliver those orders it took money for? Can a company take orders it knows cannot be delivered?

Another Allegation of Trustee Failing to Respond

April 14, 2018 12:05PM
The United States Golf Association recently filed an objection to one of the Trustee's recent motions.

In it, it claims that NWTM lured USGA into making purchases that NWTM stated would begin to be delivered by January 5, 2018 (one E-mail shows that they were all supposed to be delivered by January 5). Apparently, NWTM never notified USGA that they had shut down, and NWTM deposited a check two weeks after shutting down (for 2 new dies), and then never delivered the product.

USGA writes "The Trustee failed and/or refused to respond to USGA’s requests for compensation sent in February 2018 after learning of NWT’s non-fulfillment of the order..., and its further demand sent in March 2018".

This is starting to sound very, very familiar. I do my best not to "take sides", although recently someone felt that I was "vilifying" the Trustee and those around him. My response is "I calls 'em as I sees 'em" -- I write about whoever does something that needs to be written about. This is a very, very good example of why I write what I write: the Trustee has shown a clear pattern of refusing to respond to people when it doesn't fit his needs. It is true that I have zero evidence that he has not responded to people (and that's why I didn't write about it the first time I heard about it). But I have clear evidence that plenty of people have alleged that he has not responded to them. Had I not written about it the first time, people would not have gotten very useful information about the Trustee. I don't intend to vilify, but if the only way I can warn people makes it sound like I am vilifying, I'm going to warn people.

"We're Broke, Want a Die for $300?"

April 14, 2018 9:25AM
NWTM has very, very little cash. We know that, for example, because they were late in paying employees their last paycheck.

But now the Trustee has apparently filed a motion that would allow him to sell dies back to the customers that paid to have them made, for $300 each (plus cost of shipping). It appears that part of his rationale for charging $300 is the costs of storage, but that appears to have already been built into the fee that was charged to create dies. In the words of one creditor, the sale of the dies is "a mechanism to extract additional consideration to compensate for the estate’s dire administrative insolvency."

That is clearly more than what it would cost to return them to the customers, and much more than what the Trustee feels the dies are worth. It appears that he wants to take advantage of the small percentage of customers who really need their dies back, to collect some extra money to help pay him. Remember, the estate doesn't have enough to fully pay back the professionals, so every extra dollar he can collect is an extra dollar that can be used to pay the professionals.

Mr. Gearin's Trustee Prediction

April 10, 2018 7:25PM
After the bankruptcy filing on April 1, 2016, many creditors were contacting Seattle bankruptcy lawyers for advice. When four of them contacted Mr. Gearin (who at the time was the personal attorney for now Chapter 11 Trustee Mark Calvert), they all requested that he speak on their behalf at an April 7, 2016 hearing to state their preference that a Chapter 11 Trustee by appointed.

Mr. Gearin stated "I informed them that I would seek to be employed as the Trustee’s counsel in the event one was appointed". This begs the questions: Had the U.S. Trustee already decided on Mr. Calvert? Did Mr. Gearin know that Mr. Calvert was already chosen, or did he expect to solicit the business of any Trustee that the U.S. Trustee's office would happen to appoint? How did the U.S. Trustee -- who presumably had no idea that NWTM would be filing for bankruptcy until it did on April 1, 2016 -- go about making the decision on making Mr. Calvert the Chapter 11 Trustee?

The question of how Mr. Calvert became Trustee was curious before, after we found out that he had spent quite a bit of time with Hansen and NWTM (more so than his declaraction would suggestion). Now it becomes even curiouser, knowing that his attorney made a verbal objection to the CRO motion, and that his attorney attended the hearing on the CRO motion to state that 4 creditors (not his actual paying client) wished for a Chapter 11 Trustee to be appointed.

Trustee's Attorney Involved Before Trustee Appointed

April 10, 2018 4:45PM
I found out today that Mr. Gearin, Chapter 11 Trustee Mark Calvert's attorney, was involved in the case before Mark Calvert was appointed.

As background, the U.S. Trustee filed a motion to appoint Mark Calvert on April 8, 2016, and the Judge approved the appointment on April 11, 2016. On April 12, 2016, Mr. Calvert filed a motion to authorize employment of K&L Gates (the law firm Mr. Gearin works for). The K&L Gates expense application shows that K&L Gates first billed for services on April 8, 2016.

However, earlier that week, on April 5, 2016, Tracy Law Firm on behalf of NWTM (who was then run by Ross Hansen) filed a motion to appoint Bill Weisfield and Stuary Heath of Elliott Bay Asset Solutions (EBAS) as the CRO (Chief Restructuring Officer), after EBAS spent "considerable time" consulting with NWTM. That CRO job is the exact same job that Ross Hansen wanted Mark Calvert to have, as of mid-March, 2016. Somehow, the FBI called Mark Calvert on April 9 or April 10, before he was appointed Trustee. And by April 12, Mr. Calvert was reportedly flaunting the fact that he was receiving calls from the FBI in front of Ross Hansen.

Yet hidden in a document I discovered today, there is a reference to Mr. Gearin discussing objections to the CRO motion with the Tracy Law Firm on the day it was filed. And in another document I looked at today, I found out that Mr. Gearin was at the time Mr. Calvert's personal attorney. The next day, the well publicized creditor in the defamation lawsuit filed a formal objection, and later that day Tracy Law Firm filed a response saying that EBAS withdrew from consideration, and the day after that, NWTM and the U.S. Trustee filed a stipulation that a trustee (rather than CRO) would be appointed. That Trustee ended up being Mark Calvert. Oh, and Mr. Gearin attended a hearing about the Trustee appointment, stating that 4 creditors wished for a Trustee to be appointed -- and that he did not charge them to do so.

A few days after the bankruptcy filing, Mr. Hansen is looking at EBAS to be the CRO. Mr. Gearin is one of those who object. The formal objection is that there should be a Trustee and not a CRO. But rather than hire EBAS, the U.S. Trustee hired Mr. Calvert.

Mr. Calvert worked with Mr. Hansen for about 2 weeks in the month before the bankruptcy was filed, for about 20 hours (even attending at least one management meeting), with Mr. Hansen hoping Mr. Calvert would become the CRO. After spending that time with NWTM, Mr. Calvert decided he would rather be the Trustee, so he declined the position of CRO, and when Mr. Hansen found someone else to be CRO, Mr. Calvert apparently had Mr. Gearin call to verbally object (which does not normally appear in court documents). Mr. Gearin then showed up at the hearing (again, something not normally showing up in court documents), stating that 4 creditors wanted a Trustee to be appointed. And sure enough, a day later, the U.S. Trustee appointed Mr. Calvert as Trustee.

[I do assume that Mr. Gearin is ethical, and that when he talked to those 4 creditors that he did not bill, he did not in any way lead them into their desire to see a Trustee be appointed. He did tell them he would seek to be the Trustee's counsel.]

NWTM's Bankruptcy Website Gone

April 10, 2018 5:00PM
Early on, the website "existingbullionorders.com" was set up and used for the NWTM Chapter 11 bankruptcy, as the official bankruptcy website. And it was updated as recently as last month.

Chapter 11 Trustee Mr. Calvert, however, somehow let the domain name lapse (expire), on March 17, 2018. WHOIS records show that the registrar hasn't let the domain go yet, and NWTM has about a week to get it back. Any IT guys over there at NWTM who can take care of this ASAP? You know I'm going to post an "I told you so" if someone else grabs the domain.

This brings up a piece of information I hadn't thought about before: the domain was registered on March 18, 2016. That's a full 2 weeks before the bankruptcy filing, and appears to be during the time Mr. Calvert was interacting with NWTM regarding him coming on as a CRO. So this brings up some new, seemingly unimportant, questions: Who picked the odd website name of 'existingbullionorders.com'? Who actually registered the domain (it belongs to NWTM, but someone decided to register it)? If Mr. Hansen registered the domain, why did Mr. Calvert use it rather than a more appropriate "nwtmbankruptcy.com" (costing no more than about what Mr. Calvert bills for 2 minutes of his time)? If Mr. Calvert chose the name, why did he do so before he was officially on board, and why would he choose such an odd name?

UPDATE April 19, 2018 3:15PM: The domain is back. Apparently the NWTM IT guy read this and renewed the domain.

Was Some Missing Metal There?

April 10, 2018 1:05PM
I heard something interesting this morning.

A creditor who had metal stored with NWTM supplied the FBI with the serial numbers of the bars that were missing. This is pretty standard: if you believe something is stolen from you, and contact the FBI, you let them know what you have. And we already know that the FBI was involved at some point after the April, 2016 inventory started.

But the interesting piece is that the creditor reportedly claims that the FBI said that they saw at least some of the creditors' metal in the photographs of the inventory. But Mr. Calvert apparently has told the creditor that he never had the creditors' metal.

I do not have any way to contact the creditor, so I cannot assume this to be true. However, this goes to the very heart of what is wrong with the bankruptcy: despite Mr. Calvert's early bold claim that his goal was "to share as mcuh information as possible", he is sharing nothing. Zilch.

UPDATE April 29, 2018 3:05PM: It turns out the report is true. While I cannot confirm that the FBI said what they did, there is a creditor who has filed a document with the court that "On or about March 2018, most of the metals in question were easily findable by an FBI agent whom I contacted to look at the original Inventory that Mr. Calvert had repeatedly not allowed me to see."

My Letter to the Court

April 10, 2018 8:15AM
I wrote a letter to the court, which was filed yesterday (docket 1579). This is my first time writing to a court.

I am not linking to it here, just as I typically do not link to court documents submitted by creditors (unless it is clear they are OK with them being published). I also included some information that I did not feel comfortable publishing on this website (e.g. credible, but unsubstantiated, allegations). Linking to the letter could be considered the same as publishing it here. Being filed as a court document, it is available to the public, but it is in a much different context (e.g. it is clear that the goal is to get information out, and not to harm anyone who has done nothing wrong).

On this website, I get pulled in two directions: on the one side, I want to publish as much information as possible for creditors (and others) about what is going on with the bankruptcy, especially since the bankruptcy process in general is usually far from transparent. On the other side, people are (for good reason) protected by defamation laws. In almost all cases, I can publish the truth without fear of being sued. But when it comes to allegations, it opens up a can of worms. I hear a lot about what is going on, but there is also a lot that I simply cannot publish because I cannot prove it is true.

The goal of my letter was to get some information into the hands of people who can do something with it, if they so desire. Much of it is a re-hash of what I've written here, pointing out many of the issues with the case that have come up over the past 2 years. It also includes some allegations, which I felt necessary to get into the light of the court, in case there is truth behind them.

Auction May 2, 2018

April 9, 2018 1:50PM
Someone told me they heard that there was an NWTM auction near the end of April. I hadn't heard anything about this, so I did some digging.

It looks like Industrial Assets Corp. (d/b/a BidItUp), the company that the court authorized to purchase NWTM equipment for $1.95M, is auctioning the NWTM equipment that it bought. However, they state that the auction is "By Order Of The United States Bankruptcy Court...", which is inaccurate. The court ordered that BidItUp could buy the equipment for $1.95M, and it contemplated that BidItUp might auction the equipment (but nothing requires BidItUp to do so; in fact, the idea of them selling directly was also contemplated). Hopefully, nobody will be confused and bid higher than they otherwise would, thinking that somehow creditors may benefit (it wouldn't be the first time that happened!).

The actual auction is on May 2, 2018 starting at 8:00AM. There are previews April 26, 27, 30, and May 1. They state "Assets Formerly Of Northwest Territorial Mint, LLC – Complete State-Of-The-Art Full-Service Coining Mint ... The Largest Us Mint Manufacturer Ever To Come To Auction ... Over $5 Million Dollar Valuation - too much to list all!!"

Medalcraft's Final Offer: $1M

April 2, 2018 9:10AM
Things only get more and more interesting with the offers for the Medallic assets. We now have the 4th instance of what appears to be a party increasing their bid without needing to. Medalcraft now wants to pay $1M for assets that before it wasn't willing to pay more than $810K for after getting outbid with a $825K offer.

This is odd for a number of reasons. First, they originally offered $700K, but raised that to $810K during the bidding (presumably the most they would be willing to pay). Yet when Medalcraft's Mr. Moran received the call that his $810K bid won (and hearing that Mr. May made an unsolicited, unaccepted bid of $900K), Mr. Moran kindly offered to pay $910K "if that would make a difference." Mr. May later offered $1.25M. However, the motion to accept Medalcraft's offer suggests that Mr. May's $1.25M offer disappeared somehow (Mr. Calvert says he was in discussions with Mr. May to buy all the remaining assets, and hadn't heard back, but never mentions the $1.25M offer).

Medalcraft has stated that they will walk away if the court does not approve this offer (technically, he said he would walk away if the offer wasn't approved by the court by May 4, but that happens to be the date of the court hearing).

So where did the $1.25M by Mr. May offer go, and why did Mr. Moran raise his bid? I can't make sense of this.

'$1M Accounting Error?' - Update

March 29, 2018 8:15AM
On February 24, 2018, I wrote about a possible $1M accounting error. It seemed related to a "Inventory Brass-Copper Adjustment" line item in the Income Statement. In February, 2017 there was a $150,001 credit (gain) in this category, and in March 2017 there was a $938,844 debit (loss).

What I just found was the explanations. For February, Calvert wrote "Inventory: At the time of bankruptcy no physical inventory had been done for Copper and Brass. We now have a value and inventory and made the adjustment this month with a 25% reserve." A perfect explanation: balance sheet inventory went up $170,951, $150,001 of which was attributable to the copper/brass adjustment, and it shows up as income in the "Inventory Brass-Copper Adjustment" category. That's roughly 500,000 900,000oz of brass/copper; a lot, but imaginable.

But March is where common sense disappears. The balance sheet inventory goes down $942,332, with $938,844 of a loss shown on the income statement attributable to "Inventory Brass-Copper Adjustment". And this time Calvert wrote "We did an inventory valuation for all precious metals in the vaults plus system reports for nonprecious metal inventory. We discovered Copper, Brass and Nickel metals were not included and made the adjustment Feb 2017 with a 25% reserve." Huh? The second setence is a recap of the February, 2017 change. Precious metals prices didn't go down enough to justify a $938K loss. And to have negative income from "Inventory Brass-Copper Adjustment" implies that there was $938K of brass/copper inventory that was overvalued, but we know from February that it was only $150K.

How can you lose $950K of brass and copper a month after your inventory shows that you have $150K of brass and copper? That's roughly 5 million ounces of brass and copper. In difficult-to-move 70 pound boxes, that would be over 4,000 boxes!

UPDATE March 29, 2018 8:25AM: It appears that the March, 2017 financial report has another note: "At time of bankruptcy we did not know what precious metals would be returned to customers, with research and approval from the court we have that value and reduced inventory in March 2017 for that value." I often point out I am not a lawyer, but I'm not an accountant either. It seems that Mr. Calvert and his crack accounting team knows what I don't: when you hold $1M of inventory for storage customers, and it is listed as an asset in inventory, you fix it by reporting a $1M loss as "Inventory Brass-Copper Adjustment". Because we all know customers stored pounds of brass bouillion with NWTM. Yikes.

Is NWTM Donating to Charity?

March 27, 2018 8:20AM
I have heard that an employee was told that some items were donated to charity after NWTM shut down in December.

If anyone has any information on this (e.g. if you were told the same thing, who may have said it, if you know of what items may have gone or to where), I would very much appreciate hearing about it (you can get my E-mail address or send an anonymous tip here).

UPDATE March 27, 2018 5:40PM: I have gotten a response from one person so far, who has stated that nothing has been donated to charity (as should be the case). Unless I hear further, I think it is safe to assume that nothing has been donated to charity.

Trustee to Sell to Boy Scouts Dies

March 27, 2018 8:25AM
The Trustee has filed a motion to sell medallions, dies, and awards with Boy Scouts of America designs on them to the Boy Scouts of America for $30,000.

Will Calvert Destroy Art?

March 26, 2018 8:15AM
Chapter 11 Trustee Mark Calvert recently filed a motion to destroy paper records from either before 2012 or before 2013 (depending on which court document you choose to read).

One reader pointed out that the archive boxes include hard copies of artwork, labelled with a code starting with the letter "A" followed by a 6 digit number. These were apparently used for all NWTM projects (domestic and imported), including designs that were never produced (including hundreds that were never ordered after the bankruptcy).

Will Calvert Tell Court of NWTM Dies?

March 26, 2018 7:45AM
Chapter 11 Trustee Mark Calvert has gone to great lengths to explain to the court that Medallic had a policy of owning the dies they created for customers. And, from what I have heard, for the most part this is true: with some exceptions, Medallic customers were told that Medallic owned the dies.

But I'm concerned that I haven't seen mention in court records of the NWTM dies. NWTM created tens of thousands of dies. The NWTM dies, from what I have heard, were usually considered property of the customer. But if Calvert isn't mentioning them in the court, what is he expecting will happen to them? Is he expecting to sell them for scrap? Sell them to someone willing to bid on them? Give them away to someone? Or will he do what I imagine he would be required to do: return them to their rightful owners?

Converting to Chapter 7

March 24, 2018 8:20PM
Yesterday, Chapter 11 Trustee Mark Calvert filed a motion requesting that the case be converted from Chapter 11 (reorganization) to Chapter 7 (liquidation).

I am trying to figure out what impact, if any, this may have for creditors (technically, the bankruptcy officials are considered administrative creditors, but I am referring to people owed money before the bankruptcy filing).

The Deteriorating Chinese Business

March 23, 2018 2:45PM
Chapter 11 Trustee Mark Calvert has been making a big stink about how the Medallic assets need to be sold soon, as 75% of Medallic's business is done between February 1 and May 1 (information which, interestingly, comes from Medalcraft).

However, it has been said that about 30% of NWTM's business was done with companies in China producing the product, and it is a high profit business, generating over $1M of profit annually. That's a nice chunk of change.

So what has happened to it?

It seems that NWTM employees have been taking bits and pieces to other companies. I am aware of what appears to be at least four companies that have hired NWTM employees, and are reportedly finding ways to get business from NWTM customers. I have heard rumors that Calvert was presented with a business plan from someone interested in running the Chinese business, who felt like it was overlooked and could be obtained cheaply. But it is not getting mentioned in the court documents (which is exactly why it is being overlooked), and the business is deteriorating. Shouldn't Calvert be speeding up the sale of the Chinese business, in addition to (or instead of) Medallic?

Once competitors have gobbled up all the customers, the customer list will have nearly no value. Except, of course, to those who already helped themselves to it. Taking an order from an NWTM customer is fine, cold calling or E-mailing NWTM customers is not.

UPDATE March 23, 2018 4:30PM: To be clear, the Chinese business was almost exclusively part of NWTM, with very little (if any) Medallic business being done in China.

[This page is continued at http://about.ag/NWTMintOld.htm]



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