About.Ag


All About Silver - ... the buck stops here ...
$48 for 20 Tulving-Seized Presidential Dollar Coins on eBay (and boxes of 500)



Latest Status
# Complaints
(as of 14 Mar 2014)
685
Average Order:$43,250.19
Average Delay:~13 weeks
Longest Delay:Over 10 months
Est. verified Complaint Amount:
(as of 03 Mar 2014)
$21,711,595.92
Outstanding Orders:~$42.5M
(or ~$500M per Tulving claims)
Orders Not Delivered
In Legal Timeframe:
Up to $500M
# Lawsuits:At least 8
The FCC requires delivery within 30 days (unless otherwise specified), or you can get your money back.
California commodities law requires The Tulving Company to ship within 28 days.


This page is for OLDER Tulving information

Please go to our main Tulving page for the latest updates, and assistance if you were affected by Tulving's bankruptcy.

This is the page that was being updated as the Tulving problem started becoming known, and has later information as it gets taken off the primary page.

On Friday, February 28, 2014, we stated that they were effectively out of business, and about 8 business hours later, they had shut down.

Again, for most recent details, you can go to about.ag/Tulving.htm.

Plea Agreement Filed

July 27, 2015 6:55PM EST
The plea agreement has been filed with the court, in the charge of wire fraud against Hannes Tulving Jr. and The Tulving Company. The plea agreement is not a public document, so I cannot get a copy.

NWT Issues

July 15, 2015 9:30PM EST
Someone just alerted me (thank you!) that within the past few days the BBB closed 16 complaints against Northwest Territorial Mint (NWT) that were classified "The business failed to respond to the dispute" (usually 30+ days).

This is highly unusual, because [1] They did not respond, and [2] 12 were closed on the same day, which suggests 12 complaints in a single day (which does not seem right). I will be looking further into this tomorrow.

This is very disturbing, but at this point could *possibly* be a mistake.

UPDATE #1 17 Jul 2015 8:50PM: I tried contacting the BBB and NWT. The BBB never responded, but did remove the 12 complaints that had closed that day. I'm not sure what happened, but either the complaints weren't supposed to be there in the first place, or the BBB really messed up!

UPDATE #2 18 Jul 2015 7:30AM: It appears that the BBB branch decided to 'unclose' the exact 12 cases I asked them about, without informing me, and is allowing the company to respond ('The business is in the process of responding to previously closed complaints.').

UPDATE #3 30 Jul 2015 7:00PM: Given the poor reporting by the local BBB, it is hard to determine a pattern here. I will continue to monitor the situation.

Trustee Report #6

July 7, 2015 1:05PM EST
R. Todd Neilson, the Chapter 7 Trustee, yesterday released the Trustee Report #6.

I see little, if any, useful information besides what I have previously covered here. However, I encourage all creditors to read the report, as it comes straight from the official Tulving bankruptcy website.

The Trustee has also updated the Claims Register, although it appears the changes are minor (e.g. changing the dates that claims were filed). You can find the Claims Register by going to the official bankruptcy website (URL above), clicking on 'Claims', and clicking the "Please click here" link in the second-to-last paragraph

Bullion Direct Out of Business

July 7, 2015 1:00PM EST
Just a quick note that the popular business Bullion Direct has suspended operations, after many complaints of people not receiving orders.

I *hope* no Tulving customers have money or metal tied up with Bullion Direct as well. If you do, however, I have a webpage set up covering what is going on there.

Class Action Update

June 19, 2015 2:15PM EST
I had previously reported that the class action lawsuit against Hannes Tulving, Jr. personally was terminated.

I just heard that this may have been done with Hannes signing a tolling agreement, which would allow a suit to be refiled against him later. This cuts down expenses for both sides, while allowing the lawsuit to continued later if needed.

Tulving's Partner

June 15, 2015 1:45PM EST
It feels like we are in an intermission, with no visible activity in the bankruptcy since mid-March when the professionals got approval to be paid, with the notable exception of the filing of the criminal case, which I stumbled across last week. Given that Hannes chose to sign a plea agreement, and the class action lawsuit against him was dropped (which a number of creditors were disappointed by), I feel this to be an appropriate time to provide further details on some information I previously published.

I felt it best not to publish all the information I had received for several reasons; one of which was that I was concerned that publishing the information could interfere with justice being served. However, at this point, releasing as much of the information as possible feels appropriate. This information comes from various sources, and I have confirmed much of the information, but cannot confirm it all (e.g. without access to documents that the Trustee has, that I do not).

In around 2011, Hannes signed a partnership agreement with an individual he knew. A friend of this partner signed documents (millions of dollars worth) without being authorized to, and without the knowledge of Hannes. Some of the documents were for products/services that were supplied (but with "padded" expenses), others were completely bogus (e.g. for goods/services given away to the partners' friends).

The partner gave The Tulving Company a $4M line of credit, which was certainly helpful. But he and another friend of his were also on The Tulving Company payroll with $300,000/year salaries during part of 2011. My understanding is that there is no record of what work, if any, his friend may have done for The Tulving Company. Yet another friend of the partner worked part-time for Tulving during part of 2013.

As of June, 2013, The Tulving Company no longer had access to the $4M line of credit from the partner. The partner's friend who signed the documents also made mistakes involving millions of dollars, including accidentally paying bills of another company the partner was involved in using The Tulving Company's money.

Oddly, I saw no mention of this partner in the criminal filing against Hannes Tulving, Jr.

Class Action Lawsuit Closed

June 14, 2015 7:20AM EST
On June 8, 2015, the attorney representing the class action lawsuit against Hannes Tulving, Jr. and The Tulving Company filed a Notice of Dismissal. This provides notice that the plaintiff voluntarily dismisses without prejudice all claims against all defendants. The court reports the case as closed as of June 10, 2015.

I do not have any further information regarding this.

As a reminder, the class action lawsuit was essentially against Hannes Tulving, Jr. personally (since the bankruptcy stayed any legal action against The Tulving Company). The lawsuit had been paused in September, because of the criminal investigation.

Criminal Case Update

June 9, 2015 10:00AM EST
The U.S. Attorney opened a criminal case against Hannes Tulving, Jr. and The Tulving Company, Inc. on May 8, 2015, charging them with wire fraud. There was nothing in the bill of information that really surprised me (except that it states that some wire transfers were made by customers directly to Hannes Tulving, rather than The Tulving Company). The case documents show that Hannes Tulving, Jr. and The Tulving Company signed a Plea Agreement, although the details are not public.

On June 4, a consent motion document was filed with a proposal for the courts to approve, that would allow the coins seized by the Secret Service to be transferred to R. Todd Neilson, the Chapter 7 Trustee. He would propose a plan for liquidating the coins. This is because the Government believes that the Trustee is in a more advantageous position than the Government to efficiently and promptly liquidate the seized items and distribute the funds. It also includes the inventory of seized items, in more detail than we have previously seen (but very generic, e.g. '8832 "Penny" coins in plastic sleeves').

So what does this mean? That the wheels are slowly turning, and the coins will likely get turned over to the bankruptcy proceedings as Mr. Neilson had hoped.

Quiet

May 6, 2015 8:55AM EST
There has been no news of any type since mid-March. No docket reports have been filed, and no real changes on the offical Tulving bankruptcy website (tulvingbankruptcy.com).

I am simply posting this so people will be aware that I haven't disappeared. If you are ever worried about that, you can check the Tulving Documents page, where I post the legal documents. I try to update that at least once a week now, and report how current the page is.

Kitco Pool Safety

April 1, 2015 5:15PM EST
Although this is not related to Tulving, I thought it was important enough to share, as it is likely that a number of Tulving creditors have some money in the Kitco Pool.

I have discovered that the Kitco Pool -- once touted as being a much improved version of unallocated metal accounts -- has new safety issues. It is no longer 100% backed by physical precious metals, as Kitco led people to believe, and $25M of Kitco Pool was seized a few years back by Revenue Quebec the day before Kitco filed for bankruptcy (CCAA).

I am starting a page about the Kitco Pool, similar to this one, where I will add updates. If you have money in the Kitco Pool, I strongly urge you to read more and determine if the pool is still safe for you.

$600K A/R Compromise

March 18, 2015 9:05AM EST
R. Todd Neilson, the Chapter 7 Trustee, has filed a motion with the court to approve a settlement agreement with the trade creditor that shows up in Tulving's accounts receivable as owing $600K. This was briefly mentioned in the Trustee Report #5.

It shows $593,434.00 as being owed. It confirms that $18,000 has been paid so far, with another $8,000 that presumably has been paid since the payment schedule was printed. It shows payments of $5,000 a month, with 2 extra $15,000 payments a year, and a few extra smaller payments through May, 2015. It shows the final amount due on June 30, 2021 if all payments are made on time. Interest accrues only if payments are not made on time (which would extend the time until the loan is repaid). There is also an incentive for paying down the loan or paying it off completely; any extra payments will reduce the ending principal balance by an additional 10% of the payment received.

Taxes

February 27, 2015 2:10PM EST
A lot of people have been asking me about taxes.

I have put together a page covering taxes.

The summary (remember, I have no accounting, legal, or other similar background): you should be able to deduct the calculated loss on your 2014 tax return, either as a capital loss (the safe way) or as a theft loss (a better deduction and likely OK to take, but high audit potential). The amount to deduct can either be your loss minus the amount expected to be recovered as of December 31, 2014, or your loss minus the amount currently expected to be recovered (if more). I do not feel qualified to make a determination as to those numbers; the Chapter 7 Trustee would likely be in the best position to do so.

tulving.com moving...

February 24, 2015 1:25PM EST
After nearly a year, last Friday the tulving.com domain name finally started its way to GreatCollections Coin Auctions.

It is still legally registered to The Tulving Company, but the registry that handles the domain name is reporting that GreatCollections Coin Auctions is now an administrative and technical contact for the domain. That means that at any point they want to, they should have the ability to put the tulving.com website and E-mail back online.

Basic Analysis of Professional Fees

February 24, 2015 10:20AM EST
I have now gone over much of the fees that have been reported over the past few days (a total of a bit over $542,000, including expenses). I put all of the expenses in a table on a webpage allowing me to easily search it (if anyone would find access to the page helpful, please let me know). The fees provide great transparency into the operations of the bankruptcy (and occasionally provide information that some would likely prefer kept confidential, which is why I am not publicly releasing that page).

The main concern of creditors has typically been that the professional fees would be much higher than they could be. To summarize, I see no sign of fees for services that did not occur, nor do I see any sign of fees for services that seem out of line (such as work that was done primarily to increase billable hours).

So from my point of view, the reasonableness of the fees really hinges on whether the hourly rates (which seem astromical compared to what typical Tulving creditors get paid) are justified. In other words, we know people could have been hired at a much lower rate -- but if they got paid half as much, and it took twice as long, the fees would be nearly identical.

In all, I calculate 1,057.3 billable hours (from all the professionals combined) over the course of 11 months, or $512/hour average. That works out to about 22 hours per week, about the number of hours one half-time employee might put in. With over 200 dockets filed, analyzing several years of transactions, the two auctions, proof of claim work, that seems quite efficient to me.

There has also been a lot of "behind the scenes" work going on that has not been previously disclosed. For example, it shows that the Trustee contacted several well-known experts regarding the value of the seized coins (one of whom I believe knows the Tulving operations well).

Some of the applications state that some time was expended but not billed for and written off. For example, I also noticed a number of phone calls where one of the professionals did not bill for the calls. Also, I noted that one professional billed for 2.4 hours for meetings with the CFTC in Washington, DC. That involves about 9 hours of flight time, plus a couple hours of waiting at the airport, which the Tulving estate was not billed for.

Hopefully this will give you a better idea of the professional fees. $542,000 is a huge amount of money, but on the other hand, a lot of work was accomplished in the 1,057.3 billable hours.

Document

February 23, 2015 6:55PM EST
Someone requested that I post a copy of a document if I have it -- unfortunately, I do not (it is one that would be very useful to me, too -- if I do get a copy, I likely will be able to post it here).

BRG and Trustee Expenses

February 20, 2015 4:35PM EST - Updated February 21, 2015 10:00AM EST (to add PSZ&J info)
Yesterday, court filings showed that BRG and R. Todd Neilson, the Chapter 7 Trustee, have submitted their fee/expense applications.

By my calculations, BRG is requesting $200,203.19, and Mr. Neilson is requesting $97,347.39. These include both fees and expenses, from both before and after the transition from a Chapter 11 bankruptcy to a Chapter 7 bankruptcy. The total for both comes to $297,550.58 (for a total of 697.8 hours of work). Not all of the payments are being requested now.

The application from PSZ&J will likely be available shortly. PSZ&J is requesting $245,394.31 (again, including fees and expenses, since the beginning of the bankruptcy).

There is a *lot* of information in the applications, and it will take some time for me to go through them. However, they do show that coins that were not seized by the Secret Service that may belong to the Tulving estate (which was reported a few weeks ago) may be worth approximately $4M. It also shows $427,298 in funds were disbursed under the Chapter 11 bankruptcy, which closely matches the total in the bank accounts at the time, leading me to believe that is the amount transferred to the Chapter 7 bankruptcy.

The applications can be downloaded here:

BRG March, 2014 through May, 2014,
BRG May, 2014 through January, 2015,
Trustee March, 2014 through May, 2014,
Trustee May, 2014 through January, 2015,
PSZ&J March, 2014 through May, 2015,
PSZ&J May, 2014 through January, 2015.

I will likely go through the applications and report some information from them.

Trustee Report #5 Released - Good News, Bad News

January 27, 2015 5:15PM EST
Mr. Neilson today released the Trustee Report #5 (also available at the official Tulving bankruptcy website).

The bad news is that it is clear that the bankruptcy will likely take at least a number of years to recover all the assets. The good news is that the seized coins, appraised by the Department of Justice at $3M, may be worth quite a bit more.

  • Mr. Neilson had the opportunity to meet with Hannes Tulving, Jr. on December 8, 2014 (with some conditions). Hannes expressed a desire to cooperate and assist Mr. Neilson. I want to take a moment to thank Hannes for doing this, in case he happens to read this. Whatever your motivation may be, your cooperation is certainly beneficial to creditors.
  • The Department of Justice and Secret Service had seized some coins, which the DoJ had appraised at $3M. Mr. Tulving's legal counsel engaged an expert who valued the coins at $11,384,000. Mr. Neilson makes it clear that high valuations should be taken lightly, and points out that it would likely take several years of careful work to realize higher values.
  • The Tulving Company may have had "a number of additional coins" that were not seized by the government. There are no further details at this time (e.g. their worth, where they were, etc.), but Mr. Neilson hopes to have more details in the next report.
  • The $600K accounts receivable comes primarily or all from one single "trade creditor." Apparently a $300K check bounced in addition to a $300K order being sent. Discussions are in place which may lead to recovering the money over a 5-year time period.
  • The sale of the intellectual property closed on January 12, 2015 in a "rather tortuous process." It was sold to Great Collections (which someone pointed out to me is run by a person who used to work with the CEO of A-Mark), and the money has been transferred. Mr. Neilson contacted a number of other potentially interested parties; none provided a bid.
  • About $1.2B flowed in and out of The Tulving Company over the 3 years prior to the bankruptcy.
  • Mr. Neilson conducted a Rule 2004 exam of A-Mark Precious Metals, and received a significant amount of accounting records on December 30, 2014.
  • Mr. Neilson hopes to provide information regarding the relationship between A-Mark and Tulving, and is also looking at other financial relationships between other parties and Tulving.
  • They are hoping to carefully balance the costs of untanging the mess with recovering money (e.g. making decisions on whether to pursue possible assets based on how much it would cost to collect them).
  • Mr. Neilson beleives that they were able to inform the vast majority of claimants (creditors).
  • The Tulving records were quite accurate when compared to the proofs of claim, and he believes they capture almost all of the possible claims (there were about 100 creditors who chose not to file a claim, the amount of which was not large compared to total claims).
  • On March 12, 2015 there will be a hearing for professionals to present fee applications to the Bankruptcy Court.
I recommend creditors read the entire report, in case I missed any details that may be important or interesting to you.

Two Theories Ruled Out

January 21, 2015 2:15PM EST
My original theory had been that The Tulving Company had been speculating in the commodities market (e.g. going long in futures or options, well beyond what would have been needed for hedging). From information I have since received, this theory has been proven wrong.

Another similar theory that had been spreading on the Internet is that The Tulving Company's losses were caused by improperly calculated hedging. For example, waiting too long to hedge an order (with a price swing in the meantime), or hedging for much more/less metal than is needed (which can happen with futures contracts, which are usually 100oz for gold and 5,000oz for silver). While the choice of hedging strategy may have played a role, the improperly calculated hedge theory can pretty much be ruled out as well (those who may think that I am wrong, feel free to come up with a hedging scenario that would result in loss as metals prices go down).

Right now, it sounds like it may really boil down to high expenses (with the possibility of a significant amount of those expenses unnecessary for various reasons). It is also likely that to some extent expenses added up over the course of years. For example, at a sales level of $350M/year, you could absorb a $2M expense simply by delaying orders an extra 2 days, which could go unnoticed. In that case, as sales volume goes down, the delays would get longer.

High expenses, however, still do not answer the question of what happened around mid-April, 2013 (which -- perhaps coincidentally, perhaps not -- was when metals prices had one of their worst one-week drops). To the best of my knowledge, all orders placed before mid-April, 2013 were delivered (and while there were some reports of delays then, there were not many). The complaints started increasing significantly for orders placed around or after mid-April, 2013. The invoice numbers suggest that there was heavy ordering at that time, likely due to the lower metals prices. So something changed around mid-April, 2013, but I have yet been unable to identify exactly what.

A-Mark: Je Suis Charlie

January 13, 2015 5:05PM EST
Facts6:
  • Hannes Tulving, Jr. stated in court records that the reason for the bankruptcy was that The Tulving Company "could not pay its daily operating expenses, including high-interest payments on inventory that was collateralized for operating expenses."
  • My source stated that Tulving had a repurchase agreement (or hedged bullion account) with A-Mark. A-Mark denied that it was called a hedged bullion account, but A-Mark neither confirmed nor denied that it was a repurchase agreement, and the description they provided about the arrangement to me matches exactly what A-Mark calls a "repurchase agreement" (or arrangement).
  • A-Mark has documents that refer to inventory used in repurchase agreements as "collateral."
  • Although A-Mark disputes that Tulving paid them any interest ("no interest was ever paid by Tulving to A-Mark"), they do admit that Tulving paid a fee for this service, and A-Mark's documentation also shows cases where they refer to fees paid for repurchase agreements as interest. A-Mark's refusal to state their preferred term to categorize a payment ("interest" or "fee") does not entitle them to quash the truth.
  • The bankruptcy Trustee mentioned A-Mark by name, in the context of signficant money having been paid to A-Mark by Tulving. Although some of the facts in and behind the statement are either disputed or not known, A-Mark was the only company named in this context.
  • I have received credible information that Tulving paid A-Mark interest and/or fees of about $75,000 per month (A-Mark confirmed fees were paid, and did not deny the amount),
  • I have received credible information that the inventory A-Mark held for Tulving's possible repurchase was worth approximately $10M (A-Mark confirmed the inventory, and did not deny the amount),
  • I have received credible information that the The Tulving Company paid A-Mark over $5M in interest and fees unrelated to any outright trades (A-Mark confirmed fees were paid, and did not deny the amount).
  • I see no evidence that Tulving had any collateralized inventory other than with A-Mark (or their subsidiary CFC).
  • My source has information about Tulving's interactions with A-Mark that I have not seen published anywhere, which A-Mark has confirmed as accurate. My source also knows an internal term used by A-Mark that appears nowhere on their website. This, along with other information (unrelated to A-Mark), leads me to find my source credible.
  • On about February 28, 2014, the inventory A-Mark held (reportedly valued at $10M) was liquidated in a manner than resulted in an approximately $130,000 wire transfer to The Tulving Company.
  • According to my source, the transaction on March 3, 2014 factored in a ~$75,000 interest/fee payment (I.E. A-Mark got paid after The Tulving Company stopped taking orders), and a ~$1,000 payment to CFC.

Reminder: Tips Wanted

January 6, 2015 7:05PM EST
Just a reminder -- if you have any tips regarding Tulving, you can send them anonymously on the tip form.

Customer List Sold for $150,000

January 13, 2015 6:55PM EST
Court records show that Tulving's customer list and associated intellectual property (e.g. phone number and domain name) were sold for $150,000 in December to the only bidder, Greatcollections.com LLC d/b/a Great Collections.

Tulving's Account With A-Mark

January 9, 2015 9:25PM EST
I had been trying unsuccessfully for a while to determine the specific type of account/agreement The Tulving Company had with A-Mark (beyond outright trades), and just got a document that has the exact information I was looking for. A-Mark refers to it as a repurchase agreement (or just "Repo" for short in some of their internal documents).

With a repurchase agreement, A-Mark would purchase metal from The Tulving Company (e.g. sent in from Tulving's customers), and The Tulving Company would have the option to repurchase the metal for fair market value at a later date. My understanding is that the amount subject to repurchase was around $10M at the time The Tulving Company shut down (and at times much higher), and that the fees (at least towards the end) were approximately $75,000 a month. With some repurchase arrangements similar to this, the fees would be appropriately classified as interest.

ADDED: A coin dealer could consider this is a type of hedging. They have easy access to metal (which they consider their inventory), yet are minimally effected if the price of metal goes up or down.

Update on Chapter 11 Theory

January 9, 2015 1:55PM EST
Yesterday, I posted a theory that there may have been a plan in place for The Tulving Company to continue operations via the Chapter 11 bankruptcy, with the goal of getting metal orders from creditors sent out.

As I am not a Tulving creditor, it is easy for me to overlook the perspective of someone who has had to deal with the bankruptcy. I understand that many, if not most, Tulving creditors hold Hannes Tulving, Jr. in a very negative light. And this is certainly understandable (I have even heard stories of how difficult this was on people who actually did end up getting their orders). I hope the theory I posted did not offend any creditors.

However, one of my goals here is to be unbiased. There are some very clear (although not court-proven) facts, among which are: The Tulving Company took money from customers with an inability to ship the orders (causing much pain for creditors), but on the other hand Hannes Tulving, Jr. did not run off to a private island with $20M as many had speculated.

Which leads me to this: I have received information that leads me to be convinced that the theory I stated was indeed correct. Specifically, that before filing for bankruptcy, The Tulving Company had at least the beginnings of a plan in place to allow the business to continue under Chapter 11, similar to what I had described (selling the coins that ended up being seized by the Secret Service, but not bullion). It would have effectively been an orderly liquidation of the company, with the goal of making customers whole (with cash). The plan was not just a thought, but involved negotiations with an organization that would help facilitate everything.

Theory on Chapter 11

January 8, 2015 8:45AM EST
When The Tulving Company filed for bankruptcy, I was surprised that it was done under Chapter 11. That's because Chapter 11 is for companies that plan to continue operations (as opposed to Chapter 7, where the business shuts down and its assets are liquidated). Chapter 11 works well for companies that cannot pay all their bills each month, but do not owe a huge amount of money. It is also often used to liquidate a company in a more efficient way than the bankruptcy court might be able to do (e.g. a "Going Out of Business" sale).

So why would The Tulving Company have filed Chapter 11? With nearly $20M of debt, an inability to send out metal on time, and losing its reputation for quick shipping makes Chapter 7 seem like the only option.

The answer may lie in the information I received recently that the seized coins were listed on Tulving's books for much more than the $3M that the Justice Department appraised them for. It may be that Hannes Tulving, Jr. decided to file for Chapter 11 bankruptcy, believing that these coins could be sold by The Tulving Company for more than they could be liquidated for, and bring in enough money to allow most (or all) of the existing metal orders to be shipped.

If this were the case, with Chapter 11 protection (which is overseen by the court), buyers would feel more assured that they would actually get the coins being ordered (helping overcome the reputation issue -- especially since Tulving had previously had a stellar reputation (aside from the 1990 bankruptcy). And it explains the sign on the door the day The Tulving Company shut down ("More Information The Week Of March 10th").

The original bankruptcy petition did state assets as less than $50,000, but it also had a number of similar inconsistencies (which appeared to be due to an inability to access the records that were seized, and a need to file quickly).

What we do know is that the Secret Service seized the coins on March 9, 2014, the day before the bankruptcy filing. With the coins and records seized, any chance of selling the coins and settling accounts with creditors would have been gone.

This theory, without hard evidence, would be hard to prove or disprove. However, if it turns out that the value of the coins does approach the amount of money owed creditors, it would make this a very credible theory.

Update on the Seized Coins

January 4, 2015 9:15PM EST
I have received information from an anonymous (yet proven reliable in the past) source regarding the numismatic coins that were seized by the Secret Service.

This source told me the fair market value of the coins (broken down into certified and raw coins), as listed in The Tulving Company's books, and the value is quite a bit higher than the original appraisal by the Deparment of Justice.

Again, this does come from an anonymous source, and the value could have changed since they were entered in The Tulving Company's books. I also do not know the source for the value in the books, or the method used to generate the value (e.g. based on auction/wholesale/retail prices, whether they factored in selling a large quantity of coins at one time, etc.). However, the information I received is quite promising.

Tulving Criminal Investigation Update

January 3, 2015 7:55AM EST
This information is about a month old (as a an odd side-effect of the courts charging to search for documents). However, at the beginning of December there was some information released about the criminal investigation into Hannes Tulving, Jr.

Mr. Tulving has continued discussions with prosecutors, and as of around early December was working with prosecutors on selecting an expert to value the "significant amount of precious metals currently in the possession of the federal government". This refers to the coins that were seized by the Secret Service shortly after Tulving shut down, that were originally valued as 'worthless', but later appraised informally (I.E. without looking at all the coins) at just over $3M.

This does not provide a lot of information; however, it at least helps reiterate that Mr. Tulving has not fled to a tropical island. I personally think that auctioning the coins would be best, as it would determine the value of them. However, I assume that between the bankruptcy and criminal investigation there are restrictions preventing that from happening.

A-Mark to be Subpoenad

December 23, 2014 4:25PM EST
On Friday, the court authorized the Trustee to subpoena A-Mark Precious Metals.

Rather than a blanket authorization of all the documents requested, the court limited the initial response to specific documents, giving A-Mark the option to object to further document requests. It also requires A-Mark to provide assistance in reviewing the documents, and requires them to submit to an oral examination under oath with 21 days written notice.

The documents required initially include monthly account statements from January 1, 2011 to the present, spreadsheets and account ledgers setting forth the details behind the transactions during that time, and copies of all underlying contract documents.

These documents should give the Trustee answers to some questions that have come up about A-Mark, such as the specific type of account(s) Tulving had (sucn as outright trades, deferred delivery, forward purchases/sales, spot deferred transactions, options, or more esoteric transactions). It should also provide details on the transaction on the day Tulving shut down, which one anonymous source with knowledge of the transaction claimed was $10M (whereas the QuickBooks entry may have just showed the $132,532.05 net amount due The Tulving Company, which would hide the nature of the transaction).

From an examination of past documents A-Mark has presented to courts, A-Mark should have no problem being able to produce documents showing exactly what was bought and sold (including product, quantity, price, vault shipping from, the A-Mark trader, etc.) every day during the time period, and outlining exactly what type of account(s) Tulving had.

Auction for Customer List - $165K Opening Bid

December 9, 2014 8:55AM EST
The court has authorized the auction of the customer list (along with the phone numbers, web address and possibly other intellectual property). If you know of a company that would be willing to pay $165,000 or more for the customer list, please pass this information on to them (full details in Docket 197)! Bids must be submitted by December 15, 2014 at 5:00PM PST (although the actual auction is the next day at 10AM, and the court will approve the sale a few days later).

This is a combination of a sale and an auction. In other words, there is a company that has agreed to buy the customer list for $150K, unless there is a higher bid (and if there is a higher bid, they would get a fee to compensate them for the time/risk involved). The minimum bid is set at $165,000. If there are no bids, it will be sold for $150K.

Subpoena Requested to Examine A-Mark Records

December 2, 2014 9:10AM EST
The Chapter 7 Trustee, R. Todd Neilson, has submitted a motion to the court to authorize the production of documents by A-Mark Precious Metals, Inc., and if necessary, an oral examination. This is because the records available to the Trustee are limited in detail and scope, but reveal extensive dealings between Tulving and A-Mark. The information is required to determine if the estate holds any claims or causes of action relating to such transactions.

The proposed dates and times are December 18, 2014 at 10:00AM for the production of documents, and December 28, 2014 at 10:00AM for the examination.

The documents requested include all documents relating to any transactions, transfers or business dealings between Tulving and A-Mark from January 1, 2011 to the present. It specifically includes all ledger records, purchase orders, invoices, delivery records or confirmations, cancelled checks, wire confirmations or instructions, and receipts.

You may be wondering how Tulving's records could be limited. I have heard that the Quickbooks accounting records may only show net transactions with A-Mark. Let's imagine that one day Tulving bought $200,000 of metal from A-Mark, sold them $100,000 of metal, had a monthly bill for $75,000 for the option to purchase metal, and a $5,000 loan payment. In this case, Tulving might get a detailed bill showing $180,000 due. Rather than have 4 separate entries, it might be entered in Quickbooks as just 1 entry showing Tulving paying A-Mark $180,000. If the original paper records were unavailable, it could be difficult or impossible to determine what the actual transactions were. Hence the need for the original documents.

Intangibles Sale Motion

November 12, 2014 8:20PM EST
Last Thursday, the Chapter 7 Trustee filed a motion to (among other related things) approve the sale and auction of the Tulving customer list and other intangibles (website and phone numbers). There will be hearings December 4 and December 18.

Worthy of note is that the customer list sale would be subject to an addendum addressing privacy. Also, the agreement specifies that the customer list is from January 2011 through the petition date (including customer contact information, and information about each order).

Consumer Privacy Ombudsman Report

October 25, 2014 8:00PM EST
On Wednesday, the Consumer Privacy Ombudsman filed his report on the sale of The Tulving Company's intellectual property (the customer list, website, phone numbers, etc.).

Although there is a lot I could mention about it, the short version is this: although there is some question as to whether a privacy policy existed, and the information may not be classifiable as personally identifiable information (as bullion is typically resold, not consumed), an addendum should be made to the sale documents stating that the purchaser will abide by the privacy policy in regards to personally identifiable information. I do not believe it is iron clad, but certainly places customers in a much better position than if the addendum were not included.

More Tips Wanted

October 21, 2014 2:20PM EST
Last Updated October 24, 2014 3:15PM EST: Tulving Company financials, strikeout repo info, add 'what happened?'

I am hoping to get some more tips from people. I believe a number of people reading this may have useful information. Right now I am hoping to find out more about:

  • Details on exactly what occurred early-to-mid April, 2013, that dramatically altered The Tulving Company's ability to ship orders. For orders placed through the first week of April, 2013, complaints were typically about 2-5 week delays; orders received starting the second week of April, 2013 were subjected to lengthy delays. Whatever happened then may be the key to answering "What Happened?".
  • Any Tulving Company financial details, such as accounting reports/records/statements (these would not be published, but would be very helpful to back up other information I have, and to have an extra set of eyes looking for anomalies)
  • Any organization that may have held inventory for The Tulving Company (in Tulving's name or otherwise),
  • Any hedged (or similar) accounts that The Tulving Company may have had with wholesale bullion dealers or similar companies,
  • A sample "repo" agreement with a bullion dealer (e.g. "Addendum to Trading Agreement" or similar, with information redacted if needed; it does not need to be from Tulving),
  • Details of how a bullion dealer might use a "repo" or "collateralized inventory" account in their normal course of business
Information can either be sent via or the anonymous tips form (although I do not have a way of responding to anonymous tips). Either way, I do not disclose my sources unless they specifically request me to. I can also keep information confidential if needed. The tip form can accept files.

Trustee Report #4 Released

October 20, 2014 9:25PM EST
The Chapter 7 Trustee, R. Todd Neilson, released the
Trustee Report #4 today (you can get a copy directly from the official bankruptcy site here).

For those that have been following the Tulving bankruptcy, there is not much noteworthy new information in the report, but I urge you to read it. A few pieces of information: the Trustee is looking into ways of collecting some of the accounts receivable while avoiding costly legal expenses (that do not guarantee payment), the Trustee is hopeful in selling the intellectual property for $150K as originally planned, and they are untangling the $1.2B or so of money that flowed into and out of Tulving in the 3 years prior to bankruptcy (but being careful to use resources appropriately).

The Trustee also mentioned that they plan to file a fee application later this year to approve possible payments of professional fees (reminding us that the Court assured attorneys that all fees would be properly reviewed).

Where Things Stand

October 16, 2014 1:30PM EST
Last Updated October 16, 2014 1:30PM EST: (Safe likely contains no bullion)

Claims and Money Owed:

Total Owed at Bankruptcy Filing$19,821,127.03
Total Owed Customers at Bankruptcy Filing$18,671,529.98
Total Owed Non-Customers at Bankruptcy Filing$1,149,597.05
Number of Proof of Claim forms:378
Total Claimed by Creditors:$17,208,202.08
Total Claimed by Customers:$16,096,982.25
Total Claimed by Non-Customers:$1,111,219.83
% of money owed that was claimed:~85%

Notes: The 'owed' numbers come from Tulving's records, which may not have been accurate, especially towards the end. My original estimates were as high as $40M-$50M; this is one case where I am glad to be wrong. Claims are as of October 14, 2014. Total claims do not include about 5 duplicate claims I saw, but do include some late claims that may or may not be allowed.

Assets:

Cash~$400KExpected to be used to pay expenses, then distributed to creditors. The $400K figure comes from the end of May, 2014 (~$424K, but other expenses have almost certainly been paid since then).
DoJ-Seized Coins~$3MThis is the biggest potential source of money. It sounds like the Department of Justice wants to auction the coins, and the proceeds may or may not go to creditors. They also seized a safe, which could have some value in addition to the $3M appraisal, but I have heard that it does not contain any bullion.
Intangibles~$100K+Mainly the customer list, but also includes the domain name, phone number, etc. One company agreed to pay $150K, but that was before the Tulving privacy policy was known.
Accounts Receivable~$600KMy source believes this may include cases where bullion was delivered to dealers, and their checks bounced. It may be difficult and/or costly to collect this money.
Preference and Other Causes of ActionUnknownThe Chapter 7 Trustee is looking into payments preceding the bankruptcy, to see if recovery of some of the money may be appropriate. The Trustee has not drawn any conclusions on the recoverability of funds.

Expenses Owed:

Professional Fees$97,484.33This includes professional fees from the bankruptcy filing through the conversion to Chapter 7. It breaks down to $39,103.78 to PSZ&J, $38,839 to BRG, and $19,541.55 to the Trustee.
Lease Payments$79,200This includes payments for the Costa Mesa office/warehouse, $24,200 for March, 2014 (from the date of the bankruptcy filing), $33,000 for April, 2014 and $22,000 for May, 2014 through the date of the lease rejection.

Notes: These do not include professional fees since the conversion to Chapter 7. There are also other expenses that are a bit harder to quantify. For example, there was ~$4,500 in expenses to the auctioneer, there have been storage fees, bank fees, reimbusements for postage, etc. However, these are relatively small compared to other expenses. Also, I understand that the expenses listed here need to be approved by the court before they can be paid.

$659,125 Check Mystery Solved?

October 14, 2014 8:45AM EST
I realized yesterday the most likely reason for the $659,125.00 check that was deposited in January, 2014, that was returned on March 6, and re-deposited in late March, 2014. It is a mystery because no claim was filed for it (in fact, it would have been the largest claim). Interestingly, a source of mine states that this was a personal check, not a cashier's check as it is described in court documents.

I believe it was most likely for a monster box of gold U.S. Eagles. Based on spot prices in January, 2014, Tulving was selling gold U.S. Eagles in monster box quantities for about $627,475 to $661,475 (assuming no quantity discount), so price-wise it does fit (if they ordered on or around January 24-27). The price for a monster box will always be an even dollar amount ending in 5 or 0, which also fits. And the end-of-January timeframe seems right, given the early March rejection of the check.

One possibility is that the person who sent the check got nervous, placed a stop payment order on it, and later got their metal (which would explain why they did not file a Proof of Claim). Given the amount, it would likely be an order from a bullion dealer.

The A-Mark Transaction

October 8, 2014 9:05PM EST
I have confirmed that The Tulving Company had an agreement with A-Mark Precious Metals, Inc. that went beyond 'outright trades' (immediate physical delivery at the full cash price).

The Tulving Company had at least one financial transaction with A-Mark where there was bullion stored by A-Mark in a Brinks vault in Los Angeles. A-Mark states that this bullion was owned by A-Mark, and that Tulving paid a fee for the option to purchase the bullion at market price. A-Mark has previously stated that they never engaged in futures trading, forwards contracts, or transactions involving any type of commodity derivatives with Tulving.

This metal was liquidated on March 3, 2014 (the day Tulving shut down). As a result of the transaction, A-Mark wired just over $132,000 to The Tulving Company.

To the best of my knowledge, all of the information in this post was verified by A-Mark and/or can be confirmed by public documents.

Credible Rumors, Part II - The Loan

October 8, 2014 7:35AM EST
My source says that The Tulving Company had an unsecured $4M line of credit with an individual. The line of credit started before 2011, and ended in June, 2013.

To put June, 2013 in perspective, it was mid-April when the price of gold plummeted one week, and orders could no longer all be fulfilled. I had also heard (from another source) that the IRS may have been conducting a field audit in late April, 2013 or early May, 2013. And court documents show that The Tulving Company stopped making rent payments around June 1, 2013 (to be partially resumed about 6 months later).

Credible Rumors, Part I - Expenses

October 6, 2014 5:40PM EST
Last updated: October 6, 2014 8:25PM EST
I have been receiving a number of tips lately, many of which are credible.

I am being careful about what I disclose, for several reasons. First, in most cases, my sources do not want to be identified and/or I do not have documentation to confirm the tips (or have documentation that I cannot confirm is accurate). In other cases, disclosing too much could lead to my sources being identified, which I want to avoid at all costs. Some facts may be modified a bit for similar reasons (e.g. '415 customers' changed to 'Over 400 customers').

The information, if true (which I believe to be the case), helps outline exactly what happened to The Tulving Company. There seem to be 2 essential components, the first of which I will discuss here (some of this is from my own discoveries, some comes from tips provided by anonymous and/or confidential sources).

Financial records show some anomolies between 2010 and 2011. Towards the end of 2010, sales increased significantly (going up 80% between 2010 and 2011). And many expenses seem to have shot up, as well: insurance, personnel, and rent. But it doesn't add up.

The insurance went up 150%, which appears reasonable given the nearly doubled sales. The rent costs about tripled, as well -- but that doesn't make sense, as the company stayed in the same location it moved to in early 2009, and Hannes stayed in the same apartment he had been in for at least a couple years. And why would the office lease be renewed less than 2 years after it was originally signed (Tulving was a long-term business, that wouldn't have the need for a 1- or 2-year lease that a startup would)? And why was the lease not signed by Hannes Tulving, Jr.? Court documents show that the accountant who signed the lease started around the time the lease was signed (January 1, 2011), and list his address as 'unknown'.

But there is more to it than that. There is the cost of personnel. From what I have seen, it appears that the average salary shot up at some point in early 2011. Increased sales would not account for that. And none of the people that I have talked to that used to work at Tulving mentioned longer hours that would account for it. And later on, the average salary plummeted. By process of elimination, it seems that someone had a huge salary for a period of time. That doesn't seem like a normal occurrence to me, as I don't see any signs of Hannes Tulving, Jr. increasing his salary by a large amount during that time. And how could someone at such a company convince Hannes Tulving to pay him a huge salary (perhaps 5 times the average salary)? He took pride in explaining that a reason for low prices was not hiring expensive salespeople or coin buyers. It just doesn't add up.

The Tulving Company was known for many years for shipping within a day or two of receiving good funds, without fail. The first complaints of orders taking several weeks or longer started around March, 2011 -- at about the same time the expenses were mounting. Although it was a couple years before things got completely out of control, this seems to be the time that orders started being delayed. And we know nearly for a fact that Tulving went out of business due to delays, which were caused by using incoming customer money like a loan. So the large expenses caused a change from a well-tested businsess model (ship within a day or two) to a so-so business model (ship when you can, within a few weeks).

So it is starting to seem clearer and clearer that the events that led to Tulving's demise started at the beginning of 2011, and were related to high expenses. If you are paying more money than is coming in, you need to delay your customer orders. So where could this money have gone? That is beyond my expertise, and I feel confident will be discovered as part of the bankruptcy proceedings; the Trustee has a background perfectly suited for something like this. And even if he did not go back that many years, between the criminal investigation and other agencies investigating Tulving, if there is something to these rumors, it is sure to come up.

Still Actively Seeking Tips

October 4, 2014 7:00AM EST
I have received a number of tips lately, and any further details are certainly welcome. And I want to send a big thank you to the person(s) providing tips. You can use the tip form to send nearly anonymous tips.

Claims Update

October 3, 2014 7:05AM EST
I am showing 379 claims totalling about $17,088,983.08, of which $15,977,763.25 are claims from customers. The numbers will not match the court records, as I have taken out duplicate entries from the dollar totals, and added several Proof of Claim forms that the court received, but neglected to file.

There is also a clear issue with late claims. On October 1, the court filed at least 6 claims, which appear to have been received after the September 30, 2014 bar date. My understanding is that late claims can at times be allowed, but must meet certain strict criteria. Given the circumstances, however, I would expect the day-late claims to be allowed (it appears that none of them were on my E-mail list, so they likely did not know about the need to file a Proof of Claim until early September when the creditor list was generated).

Tulving Issues to Monitor:

October 1, 2014 7:00PM EST
I expect all claims received by the bar date should be processed by the end of the day tomorrow. I am aware of several claims that the court neglected to process; if that was done in error (as I expect), I am not sure how long that would take to correct.

At this point, I am starting to think about what happens next. I am putting together a list of answers I hope to find out, and information I hope to get. I thought there would not be much, but there are plenty of unanswered questions and information not yet known. It includes:

  • What Happened? That, of course, is one of the biggest questions. This almost certainly cannot be a simple 'We ran out of money' bankruptcy; a business like this running successfully for 20 years does not shut down owing customers $18M.
    • A Normal Bankruptcy?. I want to investigate a bit to see if there was any chance this was just a normal bankruptcy -- expenses exceeding assets (to the tune of $18M+). With about $5M of revenue after the bullion cost, it seems implausible. Now that we know many expenses, it should be easier to disprove that this could have been a normal bankruptcy.
    • Collateralized inventory?. Was there collateralized inventory, as Hannes states, and rumors suggest? I need to investigate this more.
  • Investigations. What will be the results of the Department of Justice criminal investigation, the CFTC investigation, and the class action lawsuit?
  • Potential Assets
    • Customer List. The customer list and other intangibles will be sold and/or auctioned, with a review of a consumer privacy ombudsman.
    • Preference Actions. Will preference actions (a/k/a clawbacks) be taken against anyone? It sounds unlikely that there will be clawbacks against those who received their metal.
    • $3M of DoJ-Seized Coins. The Department of Justice seized $3M of coins, that we originally assumed would be part of the bankruptcy estate. However, there is a chance that when the DoJ auctions them off, some or all of the money might not go to the bankruptcy estate. And how much money will they actually bring in?
    • The DoJ-Seized Safe. The Department of Justice also seized a safe from the Tulving offices, with contents that were 'observed and photographed', yet oddly not appraised. How much are they worth?
    • Accounts Receivable. Where did the accounts receivable come from, and why are the people balking at paying money for what appears to be metal they did receive?
  • Expenses
    • Professional Fees. Are they reasonable? So far, they appear to have been.
    • High-Price Lease as Administrative Expense. The landlord is claiming $79,200 as an administrative expense of the bankruptcy for the Tulving property from the petition date until the lease was rejected by the court (claiming the estate had valuable use of it, due to the auction of propery, which yielded $23,505.15, less than 30% of the rent expense). Despite starting as Chapter 11, the business never operated after the petition was filed. However, even if excessive ($30K/mo for a $10K/mo market value), I imagine this expense is unavoidable.
  • Claims
    • Duplicate Claims. I see 5 duplicate claims (#32, #68, #105, #150, #350), where someone filled out 2 Proof of Claim forms for the same claim (in one case one claim had the amount billed, the other had the amount paid after factoring in the $15 wire transfer credit).
    • High-Price Lease as a Claim. The largest creditor by far is the landlord, who is also claiming $921,056.84 for money owed on the leases before the bankruptcy, and damages. However, there are many issues and oddities here:
      • The leases appear to be 2-3 times market value (e.g. the 6,600SF Tulving office and warehouse was renting for $30K+/mo, yet another office/warehouse space of 6,600SF in the same building is currently being offered for $10K/mo),
      • The landlord and Hannes had a close business relationship (e.g. Hannes hired a relative of the landlord, bought/sold a house and mortgage with the landlord's family)
      • The landlord appeared to allow Hannes to go months without paying rent without eviction,
      • The apartment normally would not be rented by the business and therefore not part of the bankruptcy,
      • The residential leases were 10-year leases, which is highly unusual,
      • The leases were 10 year leases, yet claims are based on 10 years 2 months,
      • Hannes seemed to pay everyone on time, except the landlord (who often would visit Tulving),
      • The landlord knew of Tulving's financial difficulties for about 8 months before the bankruptcy,
      • Hannes claimed the bankruptcy was caused by the inability to meet expenses -- yet the high-priced lease is the largest of Tulvings' known expenses (with the possible exception of massive interest payments).
      • Hannes was paying $15K/month towards the Tulving office lease in the last few months, put paid the payment that would normally have been made mid-March on February 17, paying the landlord before the bankruptcy, giving him priority over other creditors,
      • The landlord shows 2 $6,300 payments for the apartment in early 2014, yet the Trustee's records show 2 $5,000 payments - why the discrepancy? Was this an error, some off-the-books deal, or something else?
      • The first of the 2 $5,000 payments for the apartment was actually 2 separate $2,500 checks on the same day -- presumably they were intended to be allocated as $2,500 each for the two apartment leases, but was actually applied as $5,000 towards the higher-priced lease.
  • $659,125 Cashiers Check. There was a $659,125 cashiers check that Tulving deposited, which the sender tried to reverse (but did not). Who sent Tulving such a large check, why, and why did they not file a Proof of Claim? If claimed, that would have been the largest claim after the landlord.
Wow, I did not realize how much was still unanswered at this point!

A-Mark's Claim Comes In

September 29, 2014 9:20PM EST
A-Mark's CFC division filed a claim today for $175,600.

This claim is secured by coins that CFC should have in their possession, which R. Todd Neilson (Chapter 7 Trustee) referenced once in passing. The coins had a documented value of $375K (very close to the $350K I had estimated), but the value per the claim is now $193,114. So the sale of the coins will likely result in about as much money as is owed (in other words, having almost no effect on what customers receive from the bankruptcy).

As I had previously reported, the loan was originally made in 2008. It started with a 12% interest rate, which was quickly lowered to 8.5%. It has been renewed every 6 months since then, with the latest renewal in September, 2013. Although Hannes agreed to pay down the loan by $50,000 per month starting in January, 2009, there is no evidence suggesting that he did so (and I am sure that Hannes would not have kept renewing the loan if he had paid it off). It was treated as an interest-only loan, so the $175,600 principal value stayed the same throughout the course of the loan.

Claims Pass $15M

September 29, 2014 5:20PM EST
As of this writing, there are 329 claims (as I have recorded them, which may different from what the court or bankruptcy trustee show) for a total of $15.1M ($14.2M of which is claims from customers). The deadline is tomorrow, but the court may take a couple of days to finish recording them.

The Last Minute Greedy Claims

September 26, 2014 8:30PM EST
Over the months, there have been some odd claims, mostly because people didn't understand the form. But overall, most seemed appropriate.

However, today there were 2 inflated claims filed. The first was from an individual who is basing the value of the metal he did not receive on the spot price a week after he ordered ($24.56 versus $23.43 the day he ordered), and at a $3.60/oz premium over spot (compared to the $1.34 Tulving charged over spot a month before he bought). The $3.60 over spot is for a vintage Johnson Matthey round, rather than new Johnson Matthey silver bars he bought. The $3.60 price over spot is for 1-19 bars, whereas there is a discount for 500+. He then wants nearly double that, due to 'California Unfair Comptetiton Law', then again for actual damages, and again for punitive damages, taking a $86,695 loss and asking for $407,197.13 (4.7 times his actual loss).

The second inflated claim was someone who paid $42,670.50. First, the attorney incorrectly claimed the creditor had paid $42,685.50 (he overlooked that she received a $15 discount for paying by bank wire). Then, he claimed $129,305 due to damages, fees and costs. Finally, the amount claimed is $1.50 short of what the numbers add up to. Egads.

The problem with these claims is that if they apply to one creditor, they should apply to all (or all in the same state, if state laws are involved). If their inflated claims are accepted, they take money away from other creditors. However, just because someone makes a claim does not mean it will necessarily be approved (and some certainly will not, such as a couple of people that filed twice, likely be mistake).

Landlord Files 11th Hour $1M Claim

September 26, 2014 3:30PM EST
Yesterday, the owner of the Tulving offices and the two Tulving residences requested immediate payment of $79,200, as well as $921,056.84 as a creditor for the broken leases. The landlord is best known for buying 21 Lamborghinis worth $6M for $3M from a friend, and even once sold a scaled-down Lamborghini to child actor Gary Coleman. He has close ties to Tulving, with a family who worked there who also borrowed $900K from Hannes to buy a house that a company of Hannes' bought from another family member of the landlord in 2009. The landlord would also apparently often visit with Hannes at the office.

The $79,200 payment is for lease payments for the Tulving offices from the day of the bankruptcy through May 20, 2014, which the court determined to be the date that the lease would be rejected. My understanding is that this is considered a normal bankruptcy expense, and will be paid as soon as the court approves it (before distributions to creditors).

The $921,056.84 as a creditor is for rent money that was owed before the bankruptcy, and damages. That works out to $195,645.16, $32,935.48 and $31,154.85 unpaid rent for the Tulving offices, Home Office, and Residential Lease respectively ($259,735.49), and $454,380, $95,307, and $111,634.35 respectively for damages (total $661,321.35). This would likely be paid from the same pool of money as Tulving's customers.

There are a number of concerns here, and differences between these claims and those of customers:

  • Normally, the owner of a company receives a salary and pays his own rent; had that been the case here, there would be no claim for the 2 residential leases (about $270,000 of the claims).
  • The residential leases were 10-year leases, which is highly unusual. Businesses often have 10-year leases, due to the expenses of moving and the advantage of keeping the same address. The average homeowner moves every 5-7 years, and the average apartment tenant less than that.
  • The landlord knew that Tulving was having financial difficulties and likely insolvent; he may in fact have been the only one who knew Tulving could not pay all his bills, and he likely knew that employees had been laid off. Hannes stopped paying the landlord days after talking with his bankruptcy attorney.
  • Records show that Tulving paid nearly everyone on time (except customers). Hannes' choice not to pay the landlord was likely due to his closeness to him, and with his permission.
  • A landlord normally would evict a tenant that did not pay for months on end; yet that did not happen.
  • The leases started January 1, 2011 and were 10-year leases, but the landlord is claiming rent owed in January 2021 and February 2021.
  • The leases state they are NNN (where the company leasing pays maintenance, insurance, and taxes), yet the lease states that the landlord pays property insurance and taxes. It is unclear who actually paid those costs. NNN is common for businesses, rare for residential.
  • The residential rent may or may not have been appropriate: a quick search shows several Newport Beach houses (on the beach) renting in the $4,000 range (versus over $10,000/mo for the combined apartment and home office). 3-bedroom apartments in the area range from about $2,400 to $4,500/month. Data for 7 apartments on the next block show all of them with a rent value of less than what Tulving was paying.
  • The office rent may not have been appropriate: Loopnet shows an average rent of about $19.50/SF/year for office space in 2011 when the lease was signed ($10/SF/year for industrial rent). Tulving was charged about $54/SF/year with a ~3%/year annual increase (despite average rent in the area having gone down 30% over the previous 3 years). The total rent expected over the 10-year term exceeded the assessed value of the property (Hannes could have bought the property in 2011 for the assessed value, and paid less than renting, and owned the building at the end of the term). In fact, it appears that another office/warehouse in the same building of a similar size is renting for $18.20/SF/year ($10,000/mo)!
But the biggest concern is that if the landlord had evicted Tulving when the rent checks stopped, Tulving might have been out of business before nearly all the current creditors purchased from Tulving. The landlord was well aware of Tulving's financial difficulties, and the nature of Hannes' business.

So that $79K will get paid before customers, and the $921K owed alongside customers (all of whom are likely non-priority unsecured creditors). So are there differences between the landlord and customers? Of course. The landlord bought his investment knowing very well that there was a good chance any tenant(s) would fail to pay what was due. Customers, on the other hand, had no reason to suspect that their investment would be wiped out. The landlord's investment had at best a minimal loss of value as a result (just a diminished return), yet customers lost 100% of their investment. The landlord knew of Tulving's financial difficulties, customers did not. The landlord chose to increase his damages each month, whereas nearly all customers stopped making purchases once the first ones were not received (no customer would make purchases 6 months in a row without having received any of them). The landlord's net worth was likely nearly uneffected by the bankruptcy; some customers claim to have lost their life savings.

That's all I have to say about that.

Proof of Claim Forms Due Tuesday

September 24, 2014 8:35AM EST
As a reminder, if Tulving owes you money (or metal), and you have not yet filed a Proof of Claim form, the deadline is Tuesday, September 30, 2014 (less than a week away).

If you could use some guidance, I have a page to help with the Proof of Claim form, or you can (I am limited as to the assistance I can provide with the form, as I cannot give out legal advice, but will do what I can to help out).

If the court does not have your Proof of Claim form by Tuesday, it should not be accepted, in which case you will not be able to receive your share of any distributions that are made. At this point, you may need to send the form via Priority Mail or overnight to get it there on time (the court does not accept claims over the Internet).

Also, I am aware of one case where the court did not record a Proof of Claim form (apparently, because the form was not filled in correctly, and they could not determine which bankruptcy it belonged to). I urge you to check the official bankruptcy site to verify that the R. Todd Neilson, the Chapter 7 Trustee, has received your claim (click the link in the second-to-last paragraph).

Hannes Sold a $900K Promissory Note Last Month

September 15, 2014 8:55AM EST
After hearing a rumor that Hannes Tulving, Jr. may have been buying real estate with gold, I felt obligated to do some digging.

Although I found no evidence of Hannes buying any real estate since the troubles at Tulving began, the State of California shows that he started a real estate holding company in 2006 (since suspended). Public records suggest that at the time he was associated with other real estate investors. I can only find one property that Hannes bought through the holding company, which he bought from the son of a Tulving creditor. He later sold the property to another relative of a Tulving creditor, with his company receiving a $900,000 promissory note (where the company would be paid monthly, like a bank with a mortgage).

If it was a traditional 30-year fixed-rate note, Hannes' company would be receiving about $5,000 a month from it, and it would have a balance owed of around $850,000 at this point.

I then discovered that last month Hannes sold the promissory note (for an undisclosed amount, but likely near or over $800,000). It is unknown if Hannes is the sole owner of the holding company, as he was with The Tulving Company, or whether this amount would be split with other investors (or even re-invested).

To be clear (given the rumor that led me to the information), I am not aware of any reason why this transaction should not have occurred, nor do I see anything suggesting bullion was used in the transaction at any point.

Trustee Report #3 Available

September 15, 2014 8:35PM EST
R. Todd Neilson, the Chapter 7 Trustee, has released Trustee Report #3 (you can also find it at www.tulvingbankruptcy.com, the official bankruptcy site).

It points out the the coins that the Department of Justice seized will be auctioned off by the Department of Justice, in the manner they see fit. The proceeds will hopefully go to the Tulving bankruptcy estate, but that is not certain.

It discusses the accounts receivable, but I still do not understand it. It sounds like the accounts receivable are for metal that was shipped that customers have not yet paid for (which makes sense, except that Hannes likely would not have shipped much metal without getting money first). It explains that in some cases, the payment was sent in the final days but not reflected in Tulving's records (which also makes sense). But it says that those owing the $600,000 or so of valid accounts receivable are claiming that they are unable to pay. This makes little sense; if they received the metal and never paid, how can they claim an inability to pay? Did they expect to get free gold at the expense of Tulving creditors? I think I am missing something here.

The report is about 5 pages long, so feel free to peruse it.

Customer List Ordered Sealed

September 13, 2014 7:15AM EST
As I mentioned on September 11, R. Todd Neilson made a motion with the court to have the customer list sealed. The judge yesterday ordered the customer list to be sealed. This will be a major benefit, providing peace of mind to Tulving's customers that are choosing not to file a Proof of Claim form over concerns of privacy, as their information will not be part of the public record.

Hannes Tulving Negotiating in Criminal Investigation

September 12, 2014 2:40PM EST
According to court documents filed this week, Hannes Tulving, Jr. has engaged in negotiations with the United States Attorney for the District of North Carolina relating to potential criminal charges against him.

Customers Owed $18,671,529.98

September 11, 2014 12:35PM EST
Yesterday, the Chapter 7 Trustee, R. Todd Neilson, filed the bankruptcy Schedules and Statement of Financial Affairs, that many have been anxiously awaiting since March.

Although there are some important questions that it does not help answer, there is still a lot of information:

  • First, kudos to R. Todd Neilson, as the filings show that he has made a motion with the court to file the names of customers under seal, which means that they would not become part of the public record. Although Proof of Claim forms become part of the public record, this allows those choosing not to file a Proof of Claim to maintain their privacy.
  • It suggests that roughly half of all Tulving creditors have filed Proof of Claim forms so far.
  • It shows a total of $18,709,333.91 in liabilities, of which $18,671,529.98 is owed to customers. Note that these numbers could change, but I suspect the $18.6M to customers is from fairly accurate records (although a lot lower than I had anticipated). As of this morning, there were 246 claims filed adding up to $10,097,524.85.
  • It again mentions Accounts Receivable ($593,434.00), but it is not clear what that could be.
  • It shows misc. payments owed, such as to UPS, USPS, the phone/electric/gas companies, etc.
  • It confirms that Hannes Tulving was 100% owner of The Tulving Company
  • It shows that the bankruptcy attorney (Andrew Bisom) was paid March 3, 2014, the day employees were sent home. Before, we learned that Hannes first paid him in June, 2013 (when he should have filed bankruptcy).
  • It shows that Hannes was drawing about $4K/month (not including his rent, and perhaps utilities, which were paid for by The Tulving Company)
  • Surprisingly, there were a few checks were written several days after the business closed (such as a payment to UPS). It seems Hannes gave a very high priority to paying bills.
  • It does not show payments to bullion dealers, presumably because they are not creditors (I.E. they get paid before they ship metal).
  • There was a piece of information that could potentially provide a clue or lead as to Hannes' whereabouts.
  • It does not provide any clues as to the $1M liability shown as being owed the landlord on the original petition.
  • It does not state how many Tulving customers are owed money. Based on the average order size, which has proven to be very accurate, it would suggest roughly 425 customers in all (compared to the 'up to 1,000' I was estimating).

Mailing List

If you are looking to get important updates on The Tulving Company, you can sign up for the mailing list. This mailing list will only be used to provide important updates regarding The Tulving Company (on average about one a week). Although it is intended primarily for those who have placed orders with Tulving in the past year, anyone may join the list. If you want to contact me directly (all your information is kept confidential unless you state otherwise), feel free to .

Tips Wanted

June 23, 2014 5:10PM EST
Do you have any tips regarding Tulving that you want to be (reasonably) anonymous? I have added a tip form that you can use. Quite a few people have E-mailed me, but this extra level of anonymity may be helpful for some.

You can also E-mail me at about.ag [at] gmail.com if you wish a response, or do not mind me knowing who you are (I have never given out any of my sources, nor do I have any intent to).

Consumer Privacy Ombudsman

September 10, 2014 7:00AM EST
The court reports that yesterday the U.S. Trustee and the Chapter 11 (sic) Trustee filed a stipulation requesting that the court direct the appointment of a Consumer Privacy Ombudsman.

You may recall that on August 7, 2014, R. Todd Neilson (the bankruptcy Trustee) filed a motion to sell the Tulving customer list, unaware at the time of Tulving's privacy policy. I reported on this, and a number of creditors became very concerned as they had believed Tulving had a privacy policy (and relied on it). Shortly afterward, the trustee ended up withdrawing the motion.

A Consumer Privacy Ombudsman is tasked with informing the court of the facts, circumstances, and conditions of a proposed sale that includes personally identifiable information. The ombudsman does not make any decisions, but instead helps the court understand the advantages and disadvantages of a sale. The Ombudsman would be appointed by the U.S. Trustee, with fees capped at $15,000.

Did You Contact Your Bank?

September 9, 2014 4:10PM EST
There is a Tulving creditor that is looking for other creditors who contacted their bank, who then contacted Tulving's bank (or creditors who contacted Tulving's bank directly), to see how aware Tulving's bank may have been regarding what was happening.

If you did either, please , and I can pass your information on.

Have You Opened Sealed Monster Boxes?

October 13, 2014 3:00PM EST
16 Oct 2014 Update: After about 3 days, I have had no similar reports (and a number of reports of people who did open their monster boxes, which contained silver). I am going to treat this was an isolated incident.

I received a report today from someone who said that he received a sealed monster box of U.S. Eagles from The Tulving Company that he opened, and it contained lead, with no silver.

Before I start a panic here, this is the only report I have received (and 6 months after the bankruptcy). I have not heard of this happening before with any company. It is possible that my source could be incorrect (note to my source who has a monster box of lead: please take no offense at that!). It is also possible that a customer tampered with and sold a few boxes, or someone did this with a few boxes between the U.S. Mint and Tulving.

In any case, if this is or was happening, this is extremely important to know more about. Many people buy sealed monster boxes without opening them (as there is often a higher premium if they are unopened), which would allow such tampering to go unnoticed for a long time.

If you have received sealed monster boxes from Tulving within the past few years and you opened them, and they contained anything but silver, could you please let me know ? Or if you purchased sealed monster boxes from another source that did not contain silver, that would be very useful information as well. Also useful would be approximately when the monster box(es) were ordered.

You can send me information via , or semi-anonymously using the tip form.

If I receive any other reports of lead-filled sealed monster boxes, I will report here.

What's Coming Up

September 5, 2014 7:15AM EST
It has been very quiet lately, with minimal news since Hannes Tulving was seen in public.

However, that will change soon.

First, the important schedules that are normally turned in the day the bankruptcy is filed (or up to a couple weeks later) need to be filed be R. Todd Neilson (the bankruptcy trustee) by Wednesday (after several very long extensions). He is in the middle of a number of bankruptcies, several of which likely take priority over Tulving's. At the least, the schedules should produce a (possibly partial) creditor list. It may also provide some clues as to what went on.

Next, the bar date for the Proof of Claim form is September 30, 2014, less than 4 weeks away. We already know that there is one potentially large claim by a company Tulving owed money to, which is at least partially secured. And there could be a giant influx of Proof of Claim forms after the creditor list is released, depending on how well I got the word out about the bankruptcy. By the time the bar date is reached, we will have a much better idea of the total claims.

Tulving's Problems Spread to Other Dealers

August 19, 2014 6:35AM EST
According to a Florida TV station, a woman is accusing a coin dealer in Florida of bilking her out of $30,000 of gold coins that she paid for 6 months ago. When the TV station confronted the owner, he explained that he had ordered the coins through The Tulving Company. Apparently unable to absorb the loss, he tried passing the loss on to his customer.

I am not naming the dealer, as it appears to be an isolated incident, and he claims to be a Tulving creditor (although my records do not show him having filed a Proof of Claim form).

Hannes Tulving, Jr. Seen

August 18, 2014 5:50PM EST
Hannes Tulving, Jr. appeared today at a court-ordered deposition in an individual lawsuit by one of the claimants, and plead the 5th to most questions.

I believe this is the first time Hannes has been seen since he shut down the business.

If I get more details on the deposition, I will post them here.

Customer List Sale/Auction Postponed

August 13, 2014 6:50AM EST
R. Todd Neilson, the Tulving bankruptcy trustee, has withdrawn his motion to sell/auction the Tulving customer list and other intangibles, due to "certain concerns subsequently raised in respect to the proposed sale."

Presumably, this is the concern that I brought up that Tulving may have disclosed a Privacy Policy that requires closer scrutiny of the sale to ensure that privacy concerns are met.

My understanding is that the intangibles would still be sold/auctioned, but at a later date, with some modifications (likely adding a clause to the contract preventing disclosure to third parties).

Customer List to be Auctioned for $150K+

August 8, 2014 8:40AM EST
[13 Aug 2014 UPDATE: It sounds like the privacy concerns are being addressed.]

R. Todd Neilson, the bankruptcy trustee, has filed a motion (Docket #158, #159) to sell the Tulving customer list (along with domain name, phone number, customer order records, etc.) for $150,000 (or a higher amount, if a higher bidder is found at an auction). He has already had discussions with 4 other interested parties.

While this sounds good, there is one part that concerns me. A footnote refers to 363(b)(1), which (in general) prohibits the sale of personally identifiable information in a bankruptcy if the debtor had a policy of prohibiting such transfers, unless a consumer privacy ombudsman is appointed and approves the sale. Mr. Neilson stated that he believes that no such policy exists. This surprised me, due to the extreme privacy constraints of many bullion buyers. I could not believe Tulving would not have had made statements regarding privacy.

In under a minute, I found that the Tulving website on many pages discussing specific types of bullion coins stated "Privacy Policy... We have no commissioned salesmen looking at your records. We have no telemarketers. We do not sell your private personal information to 3rd parties. We only use the personal information that is provided to us to serve our customers and to complete our business transactions. ... If you have any questions regarding our policies and practice’s you can call us at 800-995-1708 Or E-Mail hannes@tulving.com or write us at..."

Having a consumer privacy ombudsman would likely cost money (although having the terms of the sale consistent with the privacy policy might not cost a thing). However, it sounds like that law was designed exactly for cases like this -- where people have a high expectation of privacy, and we are talking about people who may have $50,000 of bullion sitting in their home. Hannes may not have done as good a job touting his privacy policy as a larger company, but he did have a clearly thought out privacy policy.

Unfortunately, since Mr. Neilson severed communications between me and him, I am not in a position to let him know about things like the privacy policy (and the issues on the tulvingbankruptcy.com website, which have been fixed).

tulvingbankruptcy.com Website Minor Update

July 31, 2014 7:40PM EST
Today, the tulvingbankruptcy.com website had some minor updates.

They added the bar date (30 Sep 2014) to several places, (but did not update the second FAQ question, which still says it is not yet set).

The Claims Register was also updated, but somehow reverted back to the one they added July 1st. But, that's good -- when I was checking, it turns out they updated the Claims Register on July 21 (but the 'Last Updated' date did not change, so I did not notice). Although gone for now at tulvingbankruptcy.com, I've saved a copy of the updated Claims Register List from tulvingbankruptcy.com. Remember, though, this site is not an official bankruptcy site.

[NOTE: The website was later changed to reflect the issues I noted]

Chapter 11 Report

July 24, 2014 9:35AM EST
Yesterday, R. Todd Neilson, the Chapter 11 Trustee, filed the final Chapter 11 report (it is considered final because further reports will be Chapter 7). The report was required per Docket 108 (entered May 29), which required a final report to be filed with the U.S. Trustee within 30 days.

Mr. Neilson points out that assets include (but are not limited to): Tulving's customer lists, potential preference and other actions, the coins seized by the Secret Service, domain names, E-mail addresses, and phone numbers. There is also a safe that the Secret Service seized with unknown (to us) contents that was not specifically mentioned, and the mysterious ~$1M in accounts receivable (that might be -- just a guess -- money owed by people due to a 'market loss' policy).

He also lists the unpaid debts after the bankruptcy petition was filed and before the conversion, so about March 10 through May 29 (about 80 days). They include $39,103.78 for Pachulski Stand Ziehl & Jones (attorneys), $38,839.00 for BRG (accountants), and $19,541.55 for R. Todd Neilson (Trustee), for a total of $97,484.33. That works out to roughly $36,500 per month. The amount owed PSZ&J works out to right around $600 per docket that was filed from the time they sought employment until the Chapter 7 conversion.

Creditors' Meeting #2 Audio/Notes/Transcript

July 17, 2014 2:50PM EST
I today got hold of the audio to the 2nd Creditors' Meeting (1st Chapter 7 Creditors' Meeting). You can find the audio here.

The meeting was less than 15 minutes, and there was not a lot of new information. In addition to (and repeating some of) the notes I posted before:

  • Metal likely cannot be identified as to who sold it to Tulving.
  • They have no concrete evidence that Mr. Tulving was involved with speculative trading with a company Mr. Neilson had mentioned at the last Creditors' Meeting, but they also do not have concrete that he did not.
  • They either have received, or are close to receiving, images of the hard drive (which was originally estimated by Tulving's attorney to be received by the end of May).
I have also posted a 'summary transcript' of the meeting, which summarizes what was said (in many cases word-for-word, but not always). The notes are time-referenced, making it easy to find something you are looking for.

Claims Pass $5,000,000

July 10, 2014 7:40AM EST
I have heard from the court that yesterday claims in The Tulving Company's bankruptcy passed $5,000,000, with about 118 customers (and 5 other creditors, such as Ford, the IRS, and a bank).

Estimating the total claims filed is very inaccurate, as it is very difficult to predict how many people will file Proof of Claim forms based on how many have been filed so far. That said, if claims continue at the rate that they have for the past 1-2 weeks (higher than previously, perhaps now that I have explained that all creditors must file a Proof of Claim form to get any money), there would be around 275 creditors with total claims of about $11M. That would be much less than the up to 1,000 creditors with $40M in claims that I was estimating. I cannot say whether this estimate is way off (it could be), whether the actual number of creditors is much less than I thought, whether creditors are waiting to file, or whether there are many creditors not willing to file (prefering privacy over money).

As a reminder, Proof of Claim forms must be received by the court by September 30, 2014.

Ford Gets the Van

July 10, 2014 7:20AM EST
Yesterday, there was a hearing to determine if Ford could repossess the Ford E-350 SD van that Tulving bought in in November, 2010. There had been no objections.

Ford is owed $13,384.17, and valued the van at $14,400. It should have a negligible impact on the assets available to creditors, as I was not treating the van as having value (since we have known of Ford's secured interest in it for a long time), and the value of the van is so close to what is owed.

California Payroll Tax Owed

July 4, 2014 7:45AM EST
The State of California has put in a claim for $9,888.54 for unpaid taxes ($8,989.58) and a 10% penalty ($898.96).

This is for the period January 1, 2014 through March 10, 2014. It covers SDI, PIT, UI, and ETT payroll taxes. The majority of the claim is a priority claim (priority claims get paid in full before any non-priority claims get paid).

Aside from this claim, the other claims by non-customers so far have totalled under $3,000 (except for Ford that is owed a bit over $13,000, but has the truck as security, which should cover most or all of what they are owed), including the IRS claim.

Creditors' Meeting Summary

July 3, 2014 4:15PM EST
Here are some brief notes from the Creditor's Meeting.

  • The Trustee, R. Todd Neilson, made it clear that he has no proof that commodities speculation did or did not occur.
  • Mr. Neilson referred to a CFTC investigation of The Tulving Company, and that they had no proof at this point that Tulving was speculating. UPDATE: He referred to a CFTC investigation, implying that it was of Tulving's speculation with a specific company.
  • The financial records may provide some clarity regarding whether or not speculation occurred.
  • The Trustee's job is to essentially to collect money and disburse it, not to determine Tulving's liability or intent, or criminality.
  • Neither Hannes Tulving, Jr. nor his attorney were present. It is expected that Hannes will not be participating further in the bankruptcy.
  • The accounting records that Mr. Neilson has are not current as of the closing, and while he expects to get copies of the hard drives from the Justice Department, he expects that the records will likely be incomplete.
  • People who sold coins to Tulving but did not get the money would be considered regular creditors, partly because any coins seized by the Justice Department likely could not be traced to the original owner.
  • Mr. Neilson concluded the Creditors' Meeting, which means that no further meetings are currently scheduled.
When I get a copy of the audio, I will be sure to post it, as before.

Further Details on Retraction

July 3, 2014 4:35PM EST
I have had several requests for any communication I may have had from A-Mark regarding the retraction I made. While I do not feel it appropriate to disclose any communications, to help ensure that the truth is properly disseminated, I will add that A-Mark made the following statements (verbatim, except for possible typos):

  • "Neither the Tulving Company nor Hannes Tulving, Jr. engaged in any futures or forwards trading with A-Mark." and further stated "A-Mark never engaged in futures trading, forwards contracts, or transactions involving any type of commodity derivatives with Tulving"
  • "A-Mark is not being investigated by the CFTC" and "A-Mark has never been investigated by the CFTC."

Creditors' Meeting Today: Information Wanted

July 2, 2014 7:15AM EST
The Chapter 7 Creditors' Meeting is today at 10AM PST (1PM EST).

It is expected that Hannes Tulving, Jr. will not show up, but he could. Mr. Neilson will be there and available to answer questions. I had previously posted a list of some suggested questions. Another good one to ask would be explain why he stated that Tulving engaged in commodities futures trading with A-Mark, when that is false.

If anyone attends the meeting and would like to send any information, you can E-mail me at about.ag [at] gmail.com, or alternatively there is now a tip form that is more anonymous than E-mail.

Retraction About A-Mark

July 1, 2014 5:15PM EST
I had previously made two updates on this page about Tulving's dealings with A-Mark. I have recently received information from A-Mark that shows several of the assumptions I had made from Mr. Neilson's statement at the Creditors' Meeting were incorrect. This led me to make statements that may have been misleading or incorrect.

Some correct facts about A-Mark include:

  • Neither The Tulving Company nor Hannes Tulving, Jr. engaged in the trading of any futures, forwards, or other commodity derivatives with A-Mark.
  • A-Mark only sells wholesale, and therefore was not a competitor of Tulving nor would normally do business with Tulving's customers.
  • A-Mark is not being investigated by the CFTC, nor has it ever been.
Therefore, I no longer believe that A-Mark was responsible in any way for Tulving’s financial problems which led to the close of its business, the loss of its customers’ money, and ultimately its filing bankruptcy. Any comments I previously made or inferences I raised to the contrary were based upon incorrect facts and assumptions. I am not aware of any inappropriate actions taken by A-Mark with respect to Hannes Tulving, Jr. or The Tulving Company.

I apologize for any incorrect statements I may have made. One of my primary goals for this website has been to find the truth. The good news is that the truth is now known here. I wish to apologize both to my readers for any misinformation, as well as to A-Mark.

100 Known Creditors

July 1, 2014 10:10AM EST
The bankruptcy Trustee has just released the latest list of claims filed, at tulvingbankruptcy.com. There are now 100 creditors known to the court.

The average customer claim is just over $45,000 (very close to the $44,000 figure I have often used since before the bankruptcy). Of the claims, 29 were filed in March, 29 in April, 13 in May, and 29 (so far) in June. 15 claims have been filed since I notified creditors (almost 3 weeks ago) that the Proof of Claim form is now required. 96 of the 100 claims are from customers. The total claims so far are just about $4.4M.

I estimate that the total number of creditors is around 500-1,000. If correct, that means that only about 10% to 20% have filed a Proof of Claim so far. It may be over 2 months before we find out the actual number of creditors, and almost 3 months before we find out the total claims (some people likely will choose not to file a claim).

July 2 Creditors' Meeting

June 27, 2014 4:25PM EST
On Wednesday is the next Creditors' Meeting. This meeting is occurring because the bankruptcy was converted from Chapter 11 to Chapter 7. The meeting starts at 10:00AM, and is at 411 W Fourth St., Room 3-110, Santa Ana, CA 92701.

Given that Hannes did not show up to the previous Creditors' Meeting, I would be surprised if he shows up to this one. However, it is possible that he will show up (doing so might be advantageous if there are criminal proceedings against him).

The bankruptcy trustee, R. Todd Neilson, will be present, and available to answer questions. Therefore, it would be beneficial if there are at least a few creditors and/or their attorneys present. Perhaps some will look at the suggested questions I had listed before the previous meeting. Also:

  • Is there more information on Tulving and commodities trading, and corrected information on who it may have been done with?
  • Did Tulving own the $25M of inventory claimed in mid-to-late 2011, or was it financed?
I may add other suggested questions here before the meeting.

Assets now at ~$3,400,000

June 24, 2014 5:00PM EST
The tulvingtbankruptcy.com website was updated today (the last update was June 12). The monthly operating report for May, 2014 was just added to the site, and the trustee report #2 was released. Things I noted include:

  • The 'about 100,000' coins seized by the Secret Service have value; there are '189,000 misc. graded and ungraded coins, as well as gold and silver ingots and bullion' with a Fair Market Value of $3,017,718.03 (although not all coins were inspected, e.g. rolls), and there is a safe, the contents of which have not yet been appraised.
  • Mr. Neilson points out that there are about 90 claims so far, amounting to about $4M (FYI, those could be up to 10 times higher, depending especially on how many people choose not to file claims).
  • He reiterates the bar date of September 30, 2014, by which time Proof of Claims forms must be filed to prevent the risk of not being paid.
  • Mr. Bisom, Tulving's attorney, returned $16,338.40 of the $20,000 retainer he had received.
  • The auction of Tulving property netted $23,505.15. This is in line with the estimated $18K-$20K, and the expenses were slightly under what was quoted.
  • Someone at the auction got a minor bargain - a Franklin 90% silver half dollar for $7.50. This was the only bullion in the auction.
  • The boxes of bullion coins shown in the auction pictures were empty boxes.
  • Other auction items seemed to be appropriately priced, from what I could see.
The news of the coins being worth just over $3M (with that number subject to be changed significantly) is not a huge surprise to me. While excellent news for creditors, it does not help answer the "How much will I get?" question. That question depends highly on the actual number of creditors, the number of people who choose not to file claims, and how much goes to expenses. It also depends on other factors, such as the value of the coins in the safe, and whether or not any company may end up paying money (I have no information suggesting they will, just that it might be a possibility).

A special thanks to Mr. Neilson for being forthcoming with the information on the appraisal.

Estimated Numbers

June 13, 2014 3:30PM EST
It's been over 3 months since The Tulving Company filed for bankruptcy, and it could be another 3 months before some key numbers are given. So I'll step in with some actual number and some estimates.

TypeAmountDetails
# of Creditors~500-1,000So far, about 85 creditors are known to the court.
There about about 450 people on the Tulving Updates mailing list (some are not creditors).
From my calculations, there are likely around 1,000 creditors total.
Average Owed per Creditor~$39,000Data that Mr. Neilson has shows that the average customer claims to be owed about $39,000. This is very close to the $44,000 figure I have often used.
Amount Owed~$40,000,000This is based on calculations I made for law enforcement and consumer protection agencies to help show the size of the problem.
Assets in Hand~$500,000As of April 30, there was about $370,000 in the bank account
About $20,000 was netted from the auction
The Secret Service has 100,000 coins, which (without knowing details) should conservatively be worth at minimum about $100,000 (however, they were described as 'worthless')
Other Assets~$1.3MMr. Neilson refered to a mysterious $1.089M of accounts receivable; without knowing the context it is impossible to say if it might be recovered (e.g. owed due to a market loss policy, or owed for bullion actually received). There are also the intangibles (customer list, domain names, phone numbers, sales data), which I could see fetching $100,000 (I know someone who would pay $1,000 just for the sales data, without any contact information).

Depending on where the money went and why , recourse may be available that could significantly increase assets.

IRS Claim$1,752I have heard from a reputable source that the IRS has put in a claim for only $1,752. They could amend this, and may be owed more. However, the IRS did (again, from a reputable source) have a field audit of Tulving in April, 2013, so I would be surprised if they put in a claim for $1,752 unless the results of the audit was paid off. And I cannot imagine Tulving had a profit since the year audited.
Credit Card Debt$402Although Tulving could have had more credit cards, the one that is known appears to have been paid off in full every month, with a small balance remaining from purchases made in the last week before Tulving closed.

Another Extention for Creditor List and Schedules

June 13, 2014 2:30PM EST
Yesterday, R. Todd Neilson filed a request for an extension to file the creditor list and other schedules, until September 10, 2014 (or alternatively no sooner than August 27). That's more than 5 months after they were originally required to be filed.

The good news is that since this is now a Chapter 7 bankruptcy, the Proof of Claim forms are required, so the filing of the creditor list has little importance to those creditors who are already aware of the bankruptcy (the majority, I suspect).

The bad news is that this further delays the answers to some basic questions, including: How much money does Tulving owe (the court sees only about $3M in claims so far, whereas they could easily be as high as $40M or more)? How many creditors are there (I expect at least 400, possibly 1,000)? The financial statements could provide valuable information as well (which Mr. Neilson has, but are not public).

Mr. Neilson states "The Trustee has limited information concerning the scope of creditors in this case" and "It will take many weeks for the Trustee to analyze and compile the information needed to identify additional creditors and complete the schedules.". It's a shame that the first extended deadline of May 31 came and went without a word from Mr. Neilson, with creditors thinking he was going to file everything by then, when in fact he knew he would not be able to do it for many months. This is information that is normally required within 2 weeks of filing for bankruptcy, and presumably can in most cases be done in that amount of time. A quick 5-minute E-mail to me once or twice a week to pass on (or just updating tulvingbankruptcy.com) would make a world of difference to the creditors.

From this document and other statements, it almost sounds like Mr. Neilson never intended to start working on the creditor list and schedules until after the bankruptcy was converted to a Chapter 7, rather than attempting to meet the origianl deadline. Since the original deadline was 2 weeks ago, signficant progress would have been made otherwise.

I guess this should help justify the fees that the professionals are charging; I can only imagine how much higher the fees would be for accountants that could have met the original deadlines.

Proof of Claim Guidelines

June 12, 2014 2:45PM EST
As a reminder, the Proof of Claim form is now required. If you do not send one in by the bar date (September 30, 2014 per Docket 117), you may not get your share of any distributions that may be made.

I have a page here that covers the basics of filling out a Proof of Claim form. I cannot give advice on how to fill out the form, but have provided sample answers that people have used on forms that have already been filed. It also has the link for getting the form, address to mail it to, and privacy pointers (the form and supporting documents are a public record).

Compensation, Part II

June 11, 2014 3:25PM EST
After listening to the audio of the Creditors' Meeting, I became curious as to Mr. Neilson's claim of having to write off his time (along with his implication that I had been inciting creditors about fees). I did a bit of research. Maybe he was on to something.

Trustees get a maximum payment, based on the amount of money distributed to creditors. I recently explained his 'write offs' with an example of a thought process that "If the court paid me by the hour, I would get $500/hr. I put in 100 hours of work, that is worth $50,000. I only got $15,750, so I lost $34,250.".

Looking at another Chapter 11 bankruptcy, it shows that Mr. Neilson submits to the court a detailed line item summary of the work that he and his staff put in (if you have ever been billed by an attorney, it will look familiar). To get paid as much as possible, you would want to bill at least the maximum amount allowed by law. In other words, to be awarded the maximum amount from the court, you must bill in such a way that you have a 'write off'. So a write-off means that you made as much money as possible -- a good thing (for a trustee), not a bad thing.

As an example of what gets billed, R. Todd Neilson billed a Chapter 11 bankruptcy estate $2,665 for work he performed on December 14, 2011. That work? "Travel to and from fee application in Santa Barbara." So he got paid $2,665 for driving a car one day to ask for money. In that bankruptcy, he received about $2.1M from July, 2003 through November, 2011 (some went to his staff), or just over $250,000 a year just from that one bankruptcy (averaging less than 7 hours a week).

In another bankruptcy, from March, 2009 through November, 2013, he received $2,610,792.01 (again, some went to his staff), or just over $550,000 per year. In that case, he got $952 one day for an hour and a half reviewing his fee application. One billing period shows about 90% of the money went directly to Mr. Neilson, with about 10% going to his staff. The staff is separate from the company he works for, BRG, who received $4,508,850.06 from March, 2009 through February 28, 2011.

June 12, 2014 7:15AM EST Update
I want to add that I am not trying to say that Mr. Neilson's compensation is unfair -- it is no more than what is allowed by law. The law provides the compensation to give trustees financial incentive to maximize the amount of money recovered, and minimize the money going to professionals. The point of this piece on compensation is to show that while Mr. Neilson may be writing off his time, that doesn't mean he is not getting paid well. It's like working on commission in sales -- you may put a lot of time into sales that do not pan out, but then may get a huge order with little work. You have to pursue all leads, it's just part of the job.

Detailed Summary of Creditors' Meeting Audio

June 11, 2014 9:25AM EST
I now have a detailed summary of the Creditors' Meeting audio. It includes notes, such as correcting some errors, and inserting facts Mr. Neilson was unaware of.

Although the audio (available here) may be a bit boring, the summary is worth looking at. There is a lot of information that wasn't in the original notes that I placed online, and the summary lets you find what you might be interested in quickly.


Creditors' Meeting Audio Available

June 9, 2014 3:45PM EST
Today, I got a copy of the audio from the Creditors' Meeting.

Feel free to download the .mp3 file here. It is just over an hour, at 1:06:19, and about 60MB in size.

I hope to add a summary of the contents of the audio within a day or so along with time references, to help you find parts of interest. The section relating to me is found below.

Setting the record straight

June 9, 2014 3:15PM EST
I have received the audio for the creditors' meeting from May 21, and found that Mr. Neilson made a number of erroneous statements and omissions regarding myself. I have transcribed the related section (please excuse any errors), with some time references (where 00:00 would be the beginning of the audio recording):

	[All statements here by R. Todd Neilson]
26:30	Let's talk a bit about the claims. There is an individual by the name of Josh Gibbons who has I don't know what
	relationships he has had. I am going to assume that it is all, that my last communication to him was that I am
	going to assume that what he is trying to do is an act of a good samaritan, he has no claims here. He has taken
	upon himself to be a conduit for a number of creditors.
27:15	I have a standard and a policy I have had over a number of years, I won't deal with people unless they are a 
	creditor or an attorney representing a creditor or some party in interest. I'm not going to talk to someone who
	comes off the street and says 'Let me tell you how to do things.' I've got enough people who have a stake here
	that have anted up that can tell me how to do things.
27:45	He apparently felt like, and I did say it is obvious you don't have any bankruptcy experience, based upon the
	questions you are asking me. So I said I am going to disregard, you are not going to be the filter to a number
	of creditors, I'm not going to do that.
28:15	And so he told creditors, people he was in touch with, that I was unresponsive, and wouldn't deal with him.
	And that he found out that it was vital to file a creditor's list, that I was shirking my responsibility,
	that it must be filed by a certain date. I said that is not true, and I don't know where you are getting this,
	other than you are probably Googling something. It's just not true.
28:45	I said we will provide, and we are very careful about the claims in this estate, but what happened is he
	suggested to his minions that they start sending me E-mails and that they start calling me, I have 15 calls
	I haven't returned, 20 E-mails I have responded back to every single one of them. I will return
	every call. If the creditors want to talk to me, that is what I am there for. And I told him, in the future
	that I am not going to deal with someone who doesn't understand things. He has no skin in this game. I'll talk
	to creditors all day, but I am not going to talk to someone like that.
29:40	So I am getting pushed back from a number of creditors who are associated with him, saying we want him to 
	represent us, and I say he is not a lawyer. I think we have gone a ways towards solving that, and I said we
	have set up a website. And it is called tulvingbankruptcy.com. Here is my first report that I will be finalizing
	today. We will have references to Proof of Claims, filings that have taken place, that will be uploaded on
	a regular basis, we will have schedules, detailing proofs of claim, we will have notices, those types of things
	that people can understand.
59:20	All I ask is that we have civil discussions. I have not had civil discussions with Mr. Gibbons.
My notes follow, corresponding to the times above:

26:30	Essentially correct, although he never said to me that he assumed I was a Good Samaritan. He stated
	"Why you choose to inject yourself in this bankruptcy is beyond me", and that I have "whipped
	[creditors] into an unjustified frenzy". Hardly saying I am a Good Samaritan.
27:15	He neglects to mention that in my first contact I stated "I hope it is appropriate for me to contact you
	directly."  After 3 weeks he responded, and then answered a few questions I had. So he does deal with 
	non-creditors as he sees fit. I also never attempted to tell him how to do his job; I simply gave him information
	and a suggestion of where to look in financial records that might produce some quick answers (without any
	expectation of a reply). And apparently he feels that you have to be a gambler to play this game (you have to
	risk losing money to gain a lot of money in fees).
27:45	He did say that it was obvious I do not have any bankruptcy experience and that he was going to disregard me --
	but it took many creditors contacting him before he would tell me that. After he said he was going to cease
	communicating with me, I only sent 1 final E-mail (apologizing and asking he re-consider).
28:15	He makes it sound as if he was responsive; the facts are very clear that this is not the case.
	I still believe that the law requires R. Todd Neilson to file a creditor list, and read in court documents that the
	creditors' list was due by May 31, 2014 (in response to the extension request was filed). I have no idea what
	the Judge means by "Debtor shall file its schedules and Statement of Financial Affairs by May 31, 2014"
	(Docket 27) if the schedules (e.g. the Court says
	Schedule F is a list of creditors holding unsecured non-priority claims) do
	not really need to be filed by then. But I am not an attorney, so maybe I just do not understand. Perhaps
	orders by judges are just suggestions, or "shall" has the legal meaning of "if you want."
	Perhaps rather than spending time telling everyone I am wrong, which doesn't help anyone, he could tell people
	how I am wrong. Maybe he just prefers dealing with creditors who are uneducated on bankruptcy matters?
28:45	Here, he implies that I asked him about filing the creditor list (true) and that he gave me information about
	how they handle the claims (blatantly false). He never responded to my original request (knowing I was waiting
	for his response before updating this page), nor a request for comment before I sent out an E-mail to creditors.
	He then complains that I my "minions" (in other words, Tulving creditors, people he is obligated
	to serve) contact him, yet it was solely due to his refusal to respond.
	He then says how he told me he would not deal with me, but that was only after his continued silence.
29:40	Here, he refers to creditors who are "associated" with me, making it sound like I'm an ambulance chaser that has
	found a few creditors desparate for help. We're talking about 400 or so creditors, compared to the 50 or so
	that R. Todd Neilson knows about. And the only association is that I am providing information.
	I have also never suggested to creditors that I represent them in any legal capacity; that is very deceptive.
	What I stated (and he has seen this) was "If you would like Mr. Neilson to provide updates to creditors
	through me, feel free to let him know.".
	It is great that he set up a website for the bankruptcy; but even now there are no filings on there. Isn't it
	interesting that he charges perhaps $300/hr or so for someone to take weeks to put hand-picked filings online, yet
	I can put them all online daily at no cost? It provides nearly no benefit to creditors, at a large cost.
59:20	It is refreshing that R. Todd Neilson admitted that he was not civil in his discussions with me. Although with his
	talk about how discussions should be civil, and how people can agree to disagree, I would think that he
	would not have been so contentious, and more open to keeping communication open. I certainly hope that R. Todd Neilson
	was not being misleading and implying that my side of the discussions were not civil (again, anyone is welcome
	to read the E-mails).
It sounds like at first, he took me as just some guy off the street, then I gained a little respect in his mind when he heard about me from creditors (and therefore started dealing with me). But as soon as I started asking questions that could cut billable hours (trying to get the Proof of Claim forms to be consistent), he got a bit upset, and decided to stop responding to me (but without telling me), somehow hoping I would not tell creditors that he had stopped responding. When I didn't accept that, and suggested creditors contact him directly, it sounds like he got royally pissed off, for some reason unknown to myself. But that would have never happened if he had simply done what he implied, and told me that he wasn't going to communicate with me.

Sorry for the rant, but I believe when someone makes such misleading and/or untrue comments against someone, it deserves a response. As a reminder, the correspondence between R. Todd Neilson and myself can be found here.

Proof of Claim Deadline: September 30, 2014

June 5, 2014 9:35AM EST
Yesterday, a new Creditors' Meeting notice was sent out. Most importantly, it shows two key pieces of information (not yet reflected at tulvingbankruptcy.com):

[1] A Proof of Claim form is now required. As a Chapter 11 bankruptcy, it was not expected to be required. Mr. Neilson did not say if the conversion to a Chapter 7 bankuptcy would require a Proof of Claim. Now, we know for certain. The notice states in no uncertain terms "To be paid, you must file a Proof of Claim even if your claim is listed in the schedules filed by the debtor.". There is now no question that it must be filed.

[2] The Bar Date (deadline for filing the Proof of Claim form) is September 30, 2014. You absolutely, positively must make sure that you have sent in the Proof of Claim form, and that the court has received it, by that date.

At some point within the next few days or so, I will provide more information on the Proof of Claim form, and hopefully offer advice for filling it out. R. Todd Neilson refused to answer questions I asked him about the form (before he cut off communication with me and suggested I stop assisting creditors), and I cannot provide legal advice, but I hope to provide some useful tips for filling out the form.

I have seen 3 different addresses for sending the Proof of Claim; the address shown in the notice of the Creditors' Meeting is: U. S. Bankruptcy Court, 411 West Fourth Street, Suite 2030, Santa Ana, CA 92701-4593.

New Creditors' Meeting

June 5, 2014 9:35AM EST
Another Creditors' Meeting has been scheduled for July 2, 2014 at 10:00AM, at 411 W Fourth St., Room 3-110, Santa Ana, CA 92701.

Although there was already a Creditors' Meeting (which Hannes Tulving, Jr. did not show up to), I understand that the conversion to a Chapter 7 bankruptcy automatically results in a new Creditors' Meeting.

No Creditor List Yet

June 2, 2014 8:45PM EST
My understanding is that the bankruptcy required the final documentation, including creditor list and financial statements, to be filed by May 31, 2014 (per Docket 27). This has not been done.

This may be due to the conversion to a Chapter 7 bankruptcy, but is not quite welcome, especially without any explanation available. The financial statements may have provided important clues as to what happened. However, it is important to note that R. Todd Neilson stated that the release of the creditor list was unimportant, and not something to be concerned about at this point.

Tulving Was Current on Auto Payments

May 30, 2014 8:30PM EST
Ford Motor Company filed a Motion for Relief from Stay, which I understand means that they want to be able to repossess a truck that Tulving had purchased and owed money on.

One noteworthy piece in the 19-page document is that Tulving was current on payments through February 11, 2014. In other words, Tulving was keeping up with many day-to-day debts through the very end.

Also interesting is that it has Hannes' home address, which was not well known before the bankruptcy. This was listed as 2112 1/2 Oceanfront, Newport Beach, CA, 92663 (which The Tulving Company was paying the lease for). Hannes personally cosigned the loan.

There was a trade-in of a 2010 Mustang when the 2010 Ford E-350 SD was purchased.

However, most telling is that the purchase, made in November of 2010, was 100% financed, despite this occurring nearly a year before the first known financial issues at The Tulving Company, and less than 3 months before The Tulving Company claimed inventory worth over $10,000,000!

Who Are the Professionals?

June 10, 2014 7:15AM EST UPDATED
May 29, 2014 4:15PM EST
Oct 25, 2014 8:00AM EST
So who are the professionals involved in the Tulving Companys' bankruptcy? Here are the ones I am certain have done work so far (there are likely others):

NameEmployerRateTitle
R. Todd NeilsonBerkeley Research GroupCommissionChapter 11 trustee
Chapter 7 trustee?
Nick TroszakBerkeley Research Group$385/hrSenior Managing Consultant
Spencer FerreroBerkeley Research Group$280/hrConsultant
Linda F. CantorPachulski Stang Ziehl & Jones LLP$850/hrCounsel for R. Todd Neilson
Jason S. PomerantzPachulski Stang Ziehl & Jones LLP$875/hrCounsel for R. Todd Neilson
Jonathan J. KimPachulski Stang Ziehl & Jones LLPAttorney$665
Michael MatteoPachulski Stang Ziehl & Jones LLP$265Paralegal
UnknownPachulski Stang Ziehl & Jones LLP$150
(est.)
Legal Assistant(?)
Megan J. WilsonPachulski Stang Ziehl & Jones LLP$150
(est.)
Legal Assistant
Leslie A. ForresterPachulski Stang Ziehl & Jones LLP$295Law Library Director
Andrew S. BisomBisom Law Group$450/hrAttorney for Debtor
Nancy S GoldenbergU.S. Trusteen/aCounsel for U.S. Trustee
The Honorable Erithe A. SmithUnited Stated Bankruptcy Courtn/aUnited Stated Bankruptcy Judge

How Professional Compensation Works

May 28, 2014 5:10PM EST
I thought I would take a moment to clarify how compensation of professionals works in a bankruptcy such as this.

There are essentially 2 categories of people getting paid from Tulving's estate: the trustee, and the other professionals (lawyers, accountants, etc.).

The professionals get paid as they normally would outside a bankruptcy, typically by the hour. There is a process where the trustee must get approval from the court to employ them (with the option for interested parties to oppose); this has been completed for PSZ&J and BRG. Once approved, after they have done work (and/or including work done before they were approved), they need to file paperwork with the court to get paid. Both of these processes are normally automatically approved. But, as we saw in this case, 2 lawyers filed oppositions to the employment of PSZ&J and BRG.

The trustee, however, normally gets paid a commission based on how much money is distributed to creditors. The law allows for reasonable compensation. The law defines the maximum commission, which is what trustees customarily get. It is 25% of the first $5,000, plus 10% of the amount up to $50,000, plus 5% of the amount up to $1,000,000, plus 3% of anything beyond that.

So in this case, if $400,000 is recovered (which it seems it has), and the professionals bill hourly fees of $150,000 (I made that number up) and the court approves it, $250,000 would be left to go to creditors. For $250,000, R. Todd Neilson would earn $15,750. If the professionals used up the entire $400,000 in fees, R. Todd Neilson would earn nothing. If the professionals did their work for free, R. Todd Neilson would get a commission on the whole $400,000 ($23,250). As you can see, it gives R. Todd Neilson a financial incentive to reduce the fees, and increase the amount distributed to creditors.

From what little I have seen, it seems that bankruptcies have a "sweet spot" of professionals taking roughly half of the money recovered.

Some of you may wonder how Mr. Neilson may have to "write off" many of the hours he puts into the bankruptcy, and how he has lost tens of thousands of dollars -- even if he gets paid $15,750 (as in my above example). This is done using accounting magic. Specifically, the logic goes something like this: "If the court paid me by the hour, I would get $500/hr. I put in 100 hours of work, that is worth $50,000. I only got $15,750, so I lost $34,250." Again, the numbers are made up, but show how the loss works.

The Bisom Group Employment Rejected

May 28, 2014 5:00PM EST
The judge ruled that The Bisom Group, which had been representing Tulving in the bankruptcy, may not be employed by Tulving.

Apparently, in a Chapter 11 bankruptcy, a debtor in possession (which I understand Tulving would have been, if a Chapter 11 trustee had not been appointed, which is often done in cases where fraud may be involved) is allowed to employ professionals. However, when a Chapter 11 trustee takes over, a Chapter 11 debtor is not authorized to employ professionals.

First Trustee Report Available

May 23, 2014 1:00PM EST
The first trustee report is available. You can find a copy here.

A few thoughts/notes:

Regarding what happened to the money, he states "It appears there was an ongoing dissipation of assets over an extended period of time. It further appears that in a late-stage desperate attempt to recover funds, Tulving engaged in speculative commodity trading which further depleted the available assets... at first blush, that is what we believe occurred." This seems to match what I suggested, that Tulving went through about $20M of inventory and then perhaps $20M-$50M or so of customer money, using commodities futures or commodities options. However, the 'dissipation of assets' does suggest two stages: a loss of inventory, and then the commodities gambling. I certainly hope these words came from research on their end, and they are not just relying on what they have heard on websites (I.E. from me).

The Secret Service seized about 100,000 coins. However, they are most likely high graded PCGS-graded common non-bullion coins (my guess), and were described as "worthless" (however, if they are PCGS-graded coins, it would shock me if they were worth less than perhaps $100,000-$200,000 at minimum). On the other hand, an A-Mark subsidiary appears to have a secured claim that is likely backed by some of those coins (A-Mark had a claim on 281,659 coins). [01 Jul 2014 update: None of the seized coins were part of the collateral held by the A-Mark subsidiary.]

R. Todd Neilson states "prior to [PSZ&J] being paid for their services we must bring assets into the estate and those assets will generally not flow into the estate without the threat of legal action." There is already about $400K in assets, between the bank account and auctioned assets, so I am not clear why the threat of legal action would be necessary to pay PSZ&J (except for fees exceeding what has already been recovered). It also seems odd that their presence is needed to pay themselves (I'm guessing that isn't really the case, it is just poor wording). It also hints at clawbacks (people being forced to send back metal they got within 90 days of the bankruptcy filing).

About 68 Proof of Claim forms have already been filed by creditors (as of May 20). As you likely know, most creditors have not filed Proof of Claim forms, since R. Todd Neilson neglected to answer my questions about the form (I wanted to ensure they would be filled out consistently, helping save the bankrupty from wasted fees).

He again points out the unimportance of the court being aware of creditors at this stage, and refers to me (although not by name).

In the first paragraph, he suggests that the report will cover "timing for a possible distribution to those with allowed claims.", but does not cover it.

Also, he wrote the report several days before releasing it. As a result, it does not mention that the court approved the applications for PSZ&J and BRG as professionals, and that the court approved the conversion to a Chapter 7 bankruptcy.

The Tulving Company Bankruptcy Site Goes Live

May 23, 2014 12:55PM EST
I have just found out that the official website of The Tulving Company's bankruptcy has gone live. There is not a lot of information there yet, but should be a helpful resource. You can find it at http://www.tulvingbankruptcy.com.

Court Approves Employment of PSZ&J and BRG

May 22, 2014 4:50PM
I just heard that the court approved the application for R. Todd Neilson to use PS&J and BRG as professionals in The Tulving Company's bankruptcy.

My understanding is that the court also explained that it scrutinizes each fee application. In other words, R. Todd Neilson can use PSZ&J and BRG, but they haven't been given a 'blank check.' For example, a high-priced attorney doing the work of a paralegal would likely not be tolerated. Likewise, if they charge $2,000 to complete a task that the average-price competent local bankruptcy attorney would only charge $1,000 for, I doubt that would be tolerated.

Plus, since an opposition was made, I believe there would be less leniency regarding fees (in other words, the fee applications cannot say 'The creditors accepted our hourly fees').

Bankruptcy Converted to Chapter 7

May 22, 2014 4:35PM
I have just found out that the bankruptcy was successfully converted from Chapter 11 to Chapter 7.

A Chapter 11 bankruptcy is designed for a business to continue (reorganize), with a plan for how to become profitable and pay off creditors. A Chapter 7 bankruptcy, however, is designed to sell off any assets and distribute them to creditors. So the conversion comes as no surprise.

I will update as I find out exactly what this may mean to you. One important note is that in a Chapter 7 case, I believe all creditors are required to fill out a Proof of Claim form (as opposed to Chapter 11, where it is not normally required). I do not yet know what happens in the case of a conversion, if the Proof of Claim form is required; I believe most likely it will be. At the very least, when the creditor list is filed, you should get a mailing from the court telling you about this. But keep in mind that you may be required to fill out the Proof of Claim form (and by a specific deadline).

E-mails To and From R. Todd Neilson

May 22, 2014 1:15PM
R. Todd Neilson once said "I am more than willing to subject myself to the scrutiny of ... fair minded people." I agree.

Given that R. Todd Neilson chose to cut off communications with me (prefering to keep creditors in the dark), requested I stop acting as an advocate for creditors, and accused me of wasting his time and costing creditors thousands and thousands of dollars, I thought giving people access to the actual E-mail exchange would be useful (my only contact with R. Todd Neilson has been through E-mail). You can read them here. It's not important that you do, but if you are curious, they make for an interesting read.

Even More Details

May 22, 2014 11:05AM
Here are some details of the meeting. This is my interpretation based on notes from several people who were there. I was not present, nor do I have the audio (I should within about 2 weeks, which I will post online).

  • Although Hannes was not present, his bankruptcy attorney was, as well as about 10 creditors and/or their attorneys, and R. Todd Neilson (the Chapter 11 trustee).
  • The meeting lasted over an hour.
  • It sounds like Mr. Neilson has received Tulving's accounting records, and should be able to put together the creditor list.
  • It appears that Hannes was involved in trading commodities futures, as I had suspected in my post-mortem.
  • Hannes wanted to appear by phone, and plead the 5th to many questions, but Mr. Neilson did not allow the apperance by phone.
  • Hannes has retained criminal counsel for the grand jury subpoena, and the counsel will likely accept service of the subpoena.
  • The U.S. Attorney believes the coins that were seized (I'm guessing mostly PCGS-graded common coins of high grades, not bullion coins) are essentially worthless, but Hannes feels they have quite a bit of value.
  • There are accounts receivable of a bit over $1M. I'm not sure how they have accounts receivable. Mr. Neilson is unsure if it can be recovered.
  • The auction generated about $27K, although I believe that is before the fees, which would bring it down to about $20K.
  • R. Todd Neilson does not know much about the value of the intangibles (domain name, phone number, customer list) at this point.
  • R. Todd Neilson does not believe there will be much in assets to distribute to creditors.
  • I understand that if the case converts to Chapter 7, which is almost certain, there will be another Creditors' Meeting.
  • I was mentioned at the meeting, and R. Todd Neilson characterized me as a 'Good Samaritan', and explained reasons why he will not communicate with me (I am not a creditor or an attorney representing a creditor).
  • Mr. Neilson does not get paid an hourly rate (he gets paid a commission), the professionals do get paid hourly. Mr. Neilson stands by his decision to employ the professionals he has chosen.
Takeaways:

The fact that Hannes requested permission to attend via telephone is encouraging. It sounds like he is doing what he can to cooperate, except for coming out of hiding.

It sounds like the most likely scenario is that Hannes was gambling in the futures market, as I had guessed, but it sounds like that is preliminary information.

I have no idea about the accounts receivable, as that would suggest Hannes was selling metal without first getting paid.

Hannes' request to appear by telephone is a catch-22: if Mr. Neilson he had allowed it, we may well have gotten a lot of answers. But, if it was allowed, he would have been in compliance with the bankruptcy rules (and therefore would not risk losing the protection of the bankruptcy), and yet still remained in hiding.

That is what I have for now. The audio may provide a bit more, but likely not much since Hannes was not present.

And a big thank-you to those that provided me with notes about the meeting.

This Just In: Hannes Tulving, Jr. Does Not Show Up!

May 21, 2014 7:05PM
I have just received word that Hannes Tulving, Jr. did not show up at the Creditors' Meeting.

I do not know yet if he chose not to show up, or was arrested, or there was some other reason.

I will start doing some research into the ramifications of not showing up at the Creditors' Meeting. By not showing up, he runs the risk of the case being dismissed.


Suggested Questions for Creditors' Meeting

May 20, 2014 6:25PM EST
Here are some suggestions for questions to ask Hannes Tulving, Jr., if he shows up at the creditors' meeting tomorrow (Wednesday). As a reminder, the public is welcome, but questions are primarily restricted to the trustee and creditors.

These questions match those I sent out to the Tulving Updates E-mail list (see form below if you want to join). If I add anything before the meeting, I will make it clear. [UPDATE: A few questions have been added in a separate section, and 2 more questions added at about 9:05AM PST]

  • What commodity brokers did The Tulving Company have commodity accounts with from 2011-2014? [If "None", ask if they had an account with PFG - The Tulving Company was on the PFG bankruptcy creditor list]
  • If there were commodity accounts, did Hannes personally guarantee any of them?
  • Did The Tulving Company own any commodity put or call options in April, 2013?
  • Was there an event in April, 2013 that prevented The Tulving Company from shipping orders within 28-30 days? If so, what?
  • The Tulving Company claimed assets of over $25M at one point in 2011 (over 600,000oz of silver). Did The Tulving Company really have those assets, and own them outright? If so, what happened to the value of that inventory?
  • At what point was the $25M of inventory depleted?
  • Are there any secured creditors, aside from Collateral Finance Corporation (an A-Mark subsidiary)?
  • Why was The Tulving Company paying for Hannes' personal residence?
  • From 2011 to 2014, was any metal removed from Tulving's inventory without Tulving being paid for it (e.g. stolen or given away)? If so, how much?
  • How much money is owed to customers overall?
  • Where did the customers' money go?
  • From 2011 to 2014, were there any payments of more than $1M that were for anything other than inventory?
  • What percentage of orders were via check, bank wire?
  • About what percentage of orders were drop-shipped in 2011, 2012, 2013?
Some other questions that a creditor would like to know:

  • what is your current address?
  • Why did you not ship people's metals?
  • Are you hiding assets and money somewhere?
  • How do you plan to repay the millions of dollars you stole from your customers?
  • NEW: What salary was Hannes drawing?
  • NEW: What other personal assets does he have? [This may not be allowed]

Quiet

May 20, 2014 12:55PM EST
No court documents have been filed since late afternoon May 13, the longest time period with no court document filings since the beginning of the case in March.

I am guessing this may be due to the Creditors' Meeting tomorrow, and the hearings on Thursday. On Thursday, there is a Status Conference, a hearing regarding the request to employ PSZ&J and BRG, and "the Chapter 11 Trustee’s Motion to Convert Case to Chapter 11" (I don't want to let my inexperience show and suggest that the court document is in error and should say 'Convert Case to Chapter 7').

Unjustified Concerns Cause Thousands of Dollars of Fees

May 19, 2014 4:30PM EST
R. Todd Neilson, the Chapter 11 trustee of The Tulving Company's bankruptcy, has been telling creditors that they will be paying "thousands and thousands of dollars" to professionals, due to unjustified concerns.

He also points out that these concerns were a result of me suggesting creditors contact him. That is completely true. Had I not suggested creditors contact him, these fees would not have been expended.

What he neglects to point out is that the concern (the the bankruptcy court is unaware of about 90%-95% of the creditors) is a reasonable concern -- in other words, one that should be addressed (even if there is no cause for concern). To me, Bankruptcy Rule 2002(l) and its notes suggest that Mr. Neilson should publish notice of certain events (via newspaper, website, etc.) if "it is reasonable to believe that publication may reach some of the creditors who would otherwise be missed". We're not talking about a handful of missed creditors; we're talking about the vast majority of creditors.

I have believed since before R. Todd Neilson was appointed that it would be far more efficient for him to field questions through me, where appopriate, and pass answers on to creditors (rather than responding to each individually).

I therefore E-mailed R. Todd Neilson on May 9 about my concern. He got the E-mail, and knowing that I was waiting for a response before updating the website, chose not to respond. I again E-mailed on May 13, explaining that I would be sending out an update to creditors, and gave him a chance to comment. He again ignored the request, knowing I would be letting creditors know of my concern and that he was not responding.

I will let you decide whose actions caused these thousands of dollars to be wasted.

Creditors' Meeting Wednesday

May 19, 2014 9:15AM EST
As a reminder, the Creditors' Meeting is on Wednesday (May 21), at 10:00AM in meeting room 1-154 at the Ronald Reagan Federal Courthouse, 411 W Fourth ST, Santa Ana, CA 92701.

The public is allowed to attend, however questions are normally limited to the trustee (who runs the meeting) and creditors. The Department of Justice instructs trustees that "Creditors and other parties in interest must also be given an opportunity to ask questions and examine the debtor.".

Audio of the meeting will be available afterward, which I plan to obtain and place online.

I believe there is a good chance that Hannes will not show up. I have been told that he believes he will be arrested if he goes out in public, and he has missed several depositions that he was expected to attend. However, if he misses the meeting, he risks losing any protections the bankruptcy may provide.

Bankruptcy Will Have a Website

May 16, 2014 10:55AM EST
R. Todd Neilson has informed one of the creditors that he will be setting up a website about the Tulving bankruptcy, which will go live in a few weeks or so. The website will be TulvingBankruptcy.com.

As I like to dig into things, I looked into this a bit. The domain name was registered on May 14, 2014. I sent out the first E-mail about R. Todd Neilson being unresponsive at 9:42AM PST. It sounds like he registered the domain as a result of input from creditors that morning. Good work!

Oddly, the owner of the domain is a man named "Jason Strong".

19 May 2014 Update: R. Todd Neilson states "I was not pressured by the Creditors into creating a website. I have created numerous websites over the years and always fully intended on doing so in this matter. It is a good source of information for the creditors and I will keep them apprised of the progress of the bankruptcy case on a regular basis."

Hannes Tulving, Jr. Responding as of 12 May 2014

May 16, 2014 7:10AM EST
I have just discovered that Hannes Tulving, Jr. signed a court document on May 12, 2014.

This confirms that Hannes, although still in hiding, is still in contact with his attorneys.

Backup of tulving.com website

May 13, 2014 2:10PM EST
On March 6, 2014, I downloaded a copy of the entire Tulving website, knowing that it might otherwise become lost.

The archive of the website can be found at tulving.about.ag. Due to the way that the web works, not all links may work (e.g. a link may lead to www.tulving.com/pagename.htm); if that happens, you can replace "www.tulving.com" with "tulving.about.ag" and the page will load.

My Concerns re: No Mention of Late Creditor List

May 12, 2014 5:20PM EST
The day after Tulving filed for bankruptcy, the judge ordered a Status Conference for May 22. The first action listed that the court may take at the conference is to "set deadlines for the filing proofs of claims." (after that date, anyone owed money who is not listed with the court normally gets nothing). So this conference is very important to creditors.

Before the conference, a Status Report gets filed, which is designed to answer some questions for the judge (and anyone else interested in the case). The second of 11 questions the judge asked was "Whether Debtor is in compliance with all duties under 11 U.S.C. §§ 521,...". In other words, the judge wants to make sure that the bankruptcy is running the way it was intended. Since the judge relies on the Status Report when preparing for the Status Conference, this report is very important to creditors.

The problem, as almost all of you know, is that the creditor list has yet to be filed -- it's been a huge problem for hundreds of people, who have to wait for the Chapter 11 trustee to get and file the creditor list before they can put this behind them (and hopefully get a check at some point). The delay was because the documents were seized by the Secret Service.

The Chapter 11 trustee (R. Todd Neilson) filled out the Status Report, and for the question "Whether Debtor is in compliance with all duties under 11 U.S.C. §§ 521,...", he mentioned that 2 reports were not yet filed. Yet no mention was made of the creditor list not having been filed (despite the first 8 words of § 521 being "The debtor shall file a list of creditors"). To me, this can be construed either as erroneous or at best highly misleading (especially in conjunction with another filing the same day).

Besides the creditor list not having been filed yet, Bankruptcy Rule 2002 requires that creditors be notified of certain events at certain times. I do not believe that the Tulving bankruptcy has followed these requirements (as they have proceeded with certain events, such as rejecting leases, without notifying creditors, since the court is unaware of all the creditors). When the judge asked if the law was being followed, I believe this should have been mentioned as well. Taking those actions without creditors knowing may be appropriate given the circumstances (I am not a lawyer), but this is something the judge clearly is requesting to know about, and needs to know about.

This is, in my opinion, a very serious problem. The judge is likely unaware of this issue, and may not handle the case properly as a result, which could be devastating to creditors (a number of whom have lost their life savings). The judge is relying on the Chapter 11 trustee to report properly. It is bad enough if the bankruptcy proceeds without the judge being informed of the lack of a creditor list, but for the judge not to be informed when he asks seems inexcusable.

The error, by itself, is understandable -- we all make mistakes. The problem, however, is that the Chapter 11 trustee and his counsel have not responded to my concern (either to me, or the court). I am acting as an advocate for hundreds of creditors that the judge is unaware of, and have alleged a serious error in a court document, yet silence. I'm not quite sure what the Chapter 11 trustee and his counsel are expecting will happen by ignoring this (or delaying a response). It took them only 3 business hours to correct a clerical error in Docket #59.

For reference, the times to get a response to my previous E-mails to R. Todd Neilson were: [1] Under an hour, [2] 12 days (the response came about an hour after a creditor called him an mentioned about.ag), and [3] 5+ weeks (no response yet). That suggests I would have heard by now if I was going to get a response.

When I inititally discovered this error, I immediately started writing about it for the website -- but then I decided it was important enough to check in with the R. Todd Neilson and his counsel first, to give them a chance to explain or fix the error. Mr. Neilson is aware that I update the website frequently, and should certainly have expected that I would disclose this.

Status Report Filed: No Mention of Late Creditor List!

May 10, 2014 11:00AM EST
Yesterday, I reported that the first Status Report was filed, and that I believed there was missing information, and that I was waiting to hear back from the Chapter 11 trustee and his counsel.

It has been over 24 hours, and I have heard nothing, nor were any court documents filed yesterday. I promised more information shortly, so I will simply show you the E-mail I sent to the Chapter 11 trustee (R. Todd Neilson) and his counsel, so you are aware of what I noticed:

Date:     Fri, May 9, 2014 at 9:50 AM EST [6:50AM PST]
Subject:  Serious omission in The Tulving Company Status Report 
Hi,
I have introduced myself to Mr. Neilson previously; I run the only website that has covered the issues with The
Tulving Company, and am acting as an advocate for the estimated 1,000 creditors in this bankruptcy. In addition
to offering updates via my website, I am providing updates via E-mail to over 400 individuals, most of whom I
believe to be Tulving creditors.
I was extremely concerned this morning by what appears to be an error/omission in the Status Report (Docket #91).
Specifically, in response to the court's request (Docket #7) for a status update on "Whether Debtor is in
compliance with all duties under 11 U.S.C. §§ 521, 1106, and 1107, and all applicable guidelines of the Office
of the U.S. Trustee. If not, explain why.", no mention was made that the creditor list has not yet been filed.
The first 8 words of 11 U.S.C. § 521 are "The debtor shall file a list of creditors." The list of creditors,
however, has not yet been filed.
This is a very serious omission, given the actions that have occurred so far in the bankruptcy that require
notice to creditors. Worse, the Status Report was filed on the same day as the "Additional Notice of 341(A)
Meeting of Creditors" (Docket #92), which was filed because "additional creditors ... have appeared in this
case." This strongly suggests that the creditor list is similar to that of a typical bankruptcy (almost all
creditors listed, but perhaps a few missing), when in fact the court is unaware of the majority of creditors.
From what I can gather, the bankruptcy court is only aware of perhaps 5% to 20% of Tulving's creditors. In my
opinion, this is critical information, which the court requested in the Status Report, but did not appear there.
JG

Hannes Tulving, Jr. Responding as of 06 May 2014

May 10, 2014 7:30AM EST
I have just discovered that Hannes Tulving, Jr. signed a court document on May 6, 2014.

This proves that Hannes, although still in hiding, is still in contact with his attorneys.

The paperwork is a stipulation, where he agrees (if the court orders it) to have his personal bank accounts frozen, being able to withdraw $10,000 a month for rent, food, and utilities. As a reference, The Tulving Company had been paying $10,300 per month for Hannes' previous apartment and home office.

Status Report Filed - More Information Soon

May 9, 2014 10:00AM EST
The Chapter 11 trustee has filed the first status report.

I believe there may be some information missing from the report; I am waiting to hear back from the Chapter 11 trustee and/or his counsel, and will provide further details at that point.

Tulving Lease to be Rejected

May 7, 2014 3:45PM EST
The Chapter 11 trustee has made a motion to the court to reject the $31,000/month lease of The Tulving Company's Costa Mesa office, and allowing anything left in the building to be abandoned.

This makes sense, given that all of Tulving's physical assets (aside from those in the possession of the Justice Department) will have been auctioned off.

It remains to see what will happen with the intangible assets (e.g. the domain name, phone number, and customer list).

Tulving Unable to Make Rent in 2013

May 7, 2014 7:30AM EST
Court documents show that The Tulving Company was unable to make rent payments for their warehouse/office building in Costa Mesa in 2013. The 10-year lease, signed in 2011, was for $31,000 per month, with a $30,000 security deposit put down when signing the lease. However, the security deposit was applied towards the lease in 2013 when Tulving was unable to pay the rent.

Only ~$350,000 in Secured Loans

May 6, 2014 1:30PM EST
After it was discovered about a week ago that Tulving had inventory seized by the Secret Service, the question came up as to whether there are any secured creditors (anyone owed money by Tulving that has assets as collateral, which would go to them and not unsecured creditors). Unfortunately, we do not yet know for certain if The Tulving Company has secured creditors, since they neglected to file the Schedule D when they filed the voluntary bankruptcy petition.

However, to be a secured creditor with full protection in bankruptcy, you need what the Uniform Commercial Code refers to as a 'perfected lien'. This process leaves a public record.

There is only 1 organization that has a perfected lien against The Tulving Company (none with Hannes Tulving, Jr. himself). It is a subsidiary of A-Mark Precious Metals. They had a secured loan with what I calculate to be roughly $350,000 of collateral (raw, ungraded 2007 quarters and dollars).

What does this mean? First, it helps answer the question as to who Tulving was paying high-interest payments to (their hint as to why they filed for bankruptcy). However, that opens further questions, as how can you lose $10M-$60M from a $350,000 loan?

It also means that if the Secret Service seized those 2007-dated quarters and dollars, the value of that inventory would end up going to A-Mark (up to what they are owed for the loan). However, that amounts to perhaps a couple hundred dollars per unsecured creditor, and was inventory we were not aware of until this week. So this should not be a huge concern. [01 Jul 2014 update: Those coins were not seized by the Secret Service]

The Chapter 11 trustee stated that the Secret Service seized Tulving's inventory, "e.g., gold and silver bullion, other precious coins and metals." The coins securing A-Mark's loan do not fit that description (there are over 250,000 such coins, made of base metals, likely in rolls, and much less secure than bullion). Presumably, that means that the bullion inventory seized had a reasonable value (e.g. in the $1,000,000+ range, not a single $12,000 monster box of silver eagles). However, that adds a new question: if The Tulving Company had $1,000,000 or more of inventory, why did they state under $50,000 in assets on the bankuptcy petition?

Given Tulving's statement (suggesting a high-interest collateralized loan caused the company to lose the $10M-$60M or so it lost), that would suggest that someone did lend Tulving a very large amount of money, but did not have a lien or did not perfect it (risking losing most or all of their money). Of course, it would be nearly impossible to lose so much money from a loan, so again, there are more questions than answers.

Tulving's Initial Explanation

May 3, 2014 4:30PM EST
Hannes Tulving, Jr. has come up with a brief statement regarding the reason for the bankruptcy:

"[The Tulving Company] filed for bankruptcy protection because it could not pay its daily operating expenses, including high-interest payments on inventory that was collateralized for operating expenses."

It is cute, but doesn't really say much. It says that they filed for bankruptcy because they had high interest loans using inventory as collateral, and couldn't keep up with the interest expenses. But if you have the inventory, and your operating expenses are too high, why take out a loan? You need to raise your prices, or go out of business.

This also means that much of The Tulving Company's inventory, which we just found out 2 days ago was seized by the Secret Service (previously, it was only known that records were seized), may be used as collateral for loans, and not available to creditors.

$371,418.75 in Tulving's Bank Acccount

May 1, 2014 9:00AM EST
Court documents show that The Tulving Company's primary bank account had a balance of $371,418.75 at the end of March. This comes as a surprise due to the bankruptcy petition showing less than $50,000 of assets.

However, it is a very small amount compared to the amount creditors are owed.

It also shows that the Chapter 11 trustee was aware that the estate assets were about 10 times what The Tulving Company claimed, at about the time he was looking to employee a law firm.

The same document also provides information that a $600,000+ cashier's check was deposited in January, 2014. This is very concerning, as it appears to be an order from a customer, yet our records of over 600 complaints the largest dollar amount shown was just under $320,000. This suggests that there may be many 'hidden' creditors out there that we are not yet aware of.

Conversion to a Chapter 7 Bankruptcy

May 1, 2014 8:35AM EST
The Chapter 11 trustee has filed a motion requesting the court convert the bankruptcy from Chapter 11 (where the business can continue running) into a Chapter 7 bankruptcy (where it is disolved).

As far as I can tell, this makes perfect sense, as there really never seemed to be a reason to file as Chapter 11 in the first place.

Tulving Inventory Seized in March

May 1, 2014 8:25AM EST
Court documents now show a new twist: Tulving's inventory was seized by the Secret Service in March, along with their records.

No information is available on what inventory they had, or what it was worth, but presumably any metal they had was seized. The Tulving Company claimed less than $50,000 in assets, and apparently was almost exclusively drop-shipping orders, so there likely was not much.

Tulving Considered Bankruptcy in June, 2013

According to information I just received, The Tulving Company was in discussions with a bankruptcy attorney in June, 2013.

This may have huge ramifications. The discusions occured only about 2 months after the The Tulving Company was no longer a viable business (mid-April, 2013). This shows that Hannes Tulving, Jr. clearly knew that his company was facing serious financial problems, and for over 8 months took orders he knew likely could not be filled. It also helps show that the "All Items With Prices Are In Stock" statement on their website was false. It also nearly proves that the ponzi-like scheme was going on at that point in time (as those following my site knew had to be the case, but proof is always helpful).

IRS Field Audit around April, 2013

April 20, 2014 6:15PM EST
I have been given information suggesting that The Tulving Company was the subject of an IRS field audit around late April, 2013.

A field audit is the most serious type of IRS audit, and typically reserved for cases where the IRS feels they may generate a substantial tax liability, due to either overreported expenses or underreported income. In April, 2013, they likely would have been investigating either the 2011 or 2012 tax return (2011 was the best sales year for Tulving).

This could introduce a new, although unlikely, theory: that unpaid tax bills caused the demise of The Tulving Company. The problem is it would be hard for the theory to account for money being spent in late 2011 and early 2012, as well as a field audit in 2013. Also, it would be hard for the numbers to add up given how much money Tulving lost (unless there were massive penalties, interest, and fees). However, it could have compounded other problems.

Lawsuit & Bankruptcy Documents Avaialble

April 18, 2014 8:30PM EST
I have added most of the documents relating to the class action lawsuit and bankruptcy here.

They are slightly redacted, meaning that I have removed some pages with information about creditors (e.g. addresses).

The Tulving Company's Assets to be Auctioned

April 18, 2014 12:40PM EST
The Chapter 11 trustee has made a motion with the court to auction what appears to be nearly the entirety of what The Tulving Company claims for assets. It does not include their customer list, however.

Assets include a 2010 Ford E350 Econoline Superduty van, a 2008 Ford E450 14' box truck, a forklift, coin counters, pallet racking and dexion shelving, computer monitors, printers, art and decor, furniture, fixtures, and equipment.

The assets to be auctioned are valued at $18,000 to $20,000. The proposed auctioneer will charge a 13% buyer's fee to buyers, plus $4,750 of expenses. The expenses include $1,400 for 2 ads in the Los Angeles Times (known for its great coverage of Tulving's issues circa 1990, but no coverage of the issues today), $850 to send 1,000 postcards about the auction, $300 for a performance bond, and $2,200 for 7 days of labor.

The auction will also make sure that the $30,000/month lease can be rejected.

Opposition to Trustee's Choice of Law Firm, Part II

April 18, 2014 12:50PM EST
On April 11, a notice of opposition was filed with the court objecting to the $850/hr fees for the attorney the Chapter 11 trustee wishes to use, stating the fees are unreasonably high.

The Chapter 11 trustee and the proposed law firm replied, suggesing that a lower rate would guarantee less qualified counsel, that the proposed law firm might save results in a cost savings, that opposition should occur when the law firm requests to be paid, that other law firms would not take on the risk of not getting paid, and that the opposition was made in bad faith.

Yesterday, another opposition was filed by the Law Offices of M. Candice Bryner, with thorough details. It points out that the proposed law firm is too far away (3-7 hours travel time to Orange County round trip, for which lawyers would get paid), suggesting a contingency fee or lower fees would be better for creditors. The attorney filing the opposition also points out that she is aware of several highly qualified law firms that would take the case at substantially lower fees. She also points out that she has never heard of an attorney in the Los Angeles or Orange County area charging $850/hr. She also points out that the point of filing an Application for Employment of Counsel is to provide creditors the opportunity to object to the terms, and that she feels that the first objection (that the Chapter 11 trustee felt was made in bad faith) was indeed made in good faith.

2 Tulving Leases to be Rejected

April 17, 2014 4:25PM EST
The Chapter 11 Trustee filed paperwork with the court yesterday to reject 2 leases that The Tulving Company had, to ensure that no money can be owed for the leases as of about the end of this month. Any contents with minimal value would be abandoned (e.g. furniture), as the costs involved would likely outweigh the money obtained by removing, storing, and selling them.

The first interesting point is that one of these units is apparently where Hannes was living ($5,800/mo), and the other is listed as a "Home Office" ($4,500/mo) with an address next to the residential address. This suggests that The Tulving Company was paying for Hannes' rent, which I believe is very unusual. It also suggests that there may be serious issues with separating Hannes Tulving from The Tulving Company (commingling funds), and could provide more reason why Hannes Tulving should be responsible for The Tulving Company's debts. This is especially so given that the Chapter 11 trustee believes that the contents can be abandoned, as they would presumably belong to Hannes Tulving (who has not applied for bankruptcy, as far as we know).

Another interesting point is that the landlord is listed as Levon Gugasian, which is very similar to "Leo Gushgarian", who is listed as having loaned The Tulving Company $1,000,000. They are almost certainly the same person.

Update: April 18, 2014
It appears that Levon Gugasian, who apparently runs an exotic car dealership, also owns the building in Costa Mesa that Tulving operated out of, and stores exotic cars in a separate area of the building (which would explain the exotic cars occasionally seen outside of The Tulving Company's offices).

.

Opposition to Trustee's Choice of Law Firm

April 16, 2014 9:00AM EST
On Friday, a creditor filed an opposition to the Chapter 11 trustee's choice of a law firm to use for the bankruptcy. He felt the feels were unreasonably high, and should be limited to $375/hr ($125/hr for paralegals).

The law firm has filed an a reply, suggesting that lower fees would result in less qualified counsel, and might not result in cost savings. They point out that the court should not interfere with the selection of counsel except in the rarest of cases. They also point out that the opposition is premature, without considering what amount will be billed for the work performed (the law firm is required to get approval from the court for actual fees at a later point).

Interestingly, the law firm is requesting that if there is a hearing in the matter, they be allowed to appear telephonically to limit administrative costs (presumably to help show that they are aware of ways to keep costs down).

Hannes Tulving has been Served

April 12, 2014 8:45AM EST
Hannes Tulving, Jr. has been served in the class action lawsuit against him.

The bankruptcy of The Tulving Company put a stay on the class action lawsuit against The Tulving Company, but not against Hannes Tulving, Jr. Hannes Tulving is believed to be in hiding, and therefore could not be served. However, the lawfirm handling the class action lawsuit made a motion for alternate service, which the judge granted. This allowed service by E-mail and regular mail, allowing the lawsuit to proceed.

Tulving Website Down

April 9, 2014 6:55AM EST
Yesterday, The Tulving Company's website was shut down.

The company still owns the domain name (tulving.com), and has pre-paid through 2020. However, the website will likely remain unavailable until it is possible to pay the web hosting company.

Trustee to employ Pachulski Stang Ziehl & Jones

April 4, 2014 8:35AM EST
The Chapter 11 Trustee has requested that the court authorize him to employ the lawfirm of Pachulski Stang Ziehl & Jones as his general bankruptcy counsel.

Creditor Meeting Date Changed

April 2, 2014 7:00AM EST
Yesterday, the Trial Attorney for the bankruptcy approved a change of the date for the creditor meeting, at the request of the Chapter 11 Trustee. The meeting has been moved to Wednesday, May 21, 2014 at 10:00AM (in Room 1-154 of the Ronald Reagan Federal Courthouse).

This is both good and bad. The bad part is that it gives Hannes Tulving, Jr. another month to stay in hiding, and delays getting very important questions answered.

However, given that the creditor list has not been filed yet, this delay was really necessary, as it is the only way to ensure that most or all creditors are aware of the meeting. Presumably, the request for the delay was due to the Trustee believing that the creditor list will be filed before then (in enough time to send notice to all creditors about the meeting).

All creditors are welcome (and encouraged) to attend the creditor meeting, but have no obligation to. It gives creditors a chance to ask Hannes Tulving, Jr. questions regarding assets, that he must answer under oath (an audio recording of the meeting is made). Creditors may ask questions 'pertaining to assets or any other matter pertinent to the administration of the case.'

There may be a bit of excitement involved, given that Hannes appears to be in hiding, and will likely be approached by process servers, and perhaps law enforcement due to the criminal investigation.

A quiet week

March 28, 2014 1:55PM EST
Not much has been going on this week regarding Tulving. At this point, we are pretty much waiting on the U.S. Attorney's office to get copies of Tulving's records to them, so Tulving can finish the bankruptcy filing.

Behind the scenes, the bankruptcy generates a fair bit of paperwork, but nothing noteworthy (aside from what I have mentioned here).

If anyone has any questions, feel free to .

Creditor List Deadline Extended

March 25, 2014 7:25AM EST
Yesterday, the judge granted Tulving an extension to complete the bankruptcy paperwork (schedules). The new deadline is May 31, 2014.

Most importantly, this means that it may be more than 2 months until Tulving files the creditor list. This appears to be a very rare extension, and is unforunate as it keeps creditors in limbo (not being able to verify that their name is on the creditor list, which is very important). It will also make some people (e.g. press looking at court documents) continue to think this case is much smaller than it is (it looks like there are 9 creditors owed $1.7M, versus hundreds of creditors owed perhaps as much as $40M). However, given that Tulving's records were seized, the extension was unavoidable (assuming Tulving did not have an off-site backup of his records).

I expect to send an E-mail by the end of the day going into more detail about the creditor list. The short version is that if you do appear on the creditor list (and agree with the amount, and it is not listed as disputed, unliquidated or contingent), you do not need to send any paperwork to get your share of any money that may be distributed. But if you are on the list, you will need to send paperwork by a to-be-determined deadline (after the creditor list is filed). If you are not on the mailing list, you can sign up below.

Tulving Assets Seized by Secret Service

March 20, 2014 6:30PM EST
There was a rumor last week that Tulving's assets had been seized by federal authorities.

Today, bankruptcy paperwork confirms that the Secret Service "seized all of [Tulving's] computers, files, and records", acting on behalf of the U.S. Attorney on or about March 9.

This is expected to delay the completition of the bankruptcy paperwork by up to 60 days. Importantly, this also means that the bankruptcy court will be operating with the hastily compiled list of just 9 out of the hundreds of Tulving creditors.

Chapter 11 Trustee Assigned

March 20, 2014 12:20PM EST
The U.S. Trustee has assigned R. Todd Neilson to serve as the Chapter 11 trustee for the Tulving bankruptcy.

R. Todd Neilson has been involved in a number of high-profile bankruptcy cases, and appears to be exactly what creditors of The Tulving Company would want in a trustee. He has extensive forensic accounting experience, which should be very helpful here given the circumstances. Regarding one Chatper 11 bankruptcy case, he stated "All I’m doing here, and all I did in the FBI, is try to get to the truth." I like those words.

Creditor Hearing

March 14, 2014 7:15AM EST
A creditor hearing has been scheduled for April 18, 2014 at 11:00AM. It is at 411 W Fourth St., Room 1-159, Santa Ana, CA 92701. [CHANGED]

As a reminder, the creditor list in the voluntary petition is minimal. I understand this must be corrected within 14 days of the petition, which would be Monday, March 24. At that point, all creditors should be listed.

If you are owed money or metal by The Tulving Company, I would recommend downloading a PDF copy of the Notice of Chapter 11 Bankruptcy Case, Meeting of Creditors, & Deadlines. This is required to be sent to you, but as the list of creditors is incomplete at this time, the notice will be delayed.

Did you get metal or cash after December 9?

March 13, 2014 9:05AM EST
The Tulving Company filed a petition for bankruptcy on March 10, 2014.

As mentioned in our FAQ, bankruptcy law has something called 'preference' (commonly known as 'clawback').

Unfortunately, this means that if you received metal or cash from The Tulving Company after December 9, 2013, you may be required to return it to the bankruptcy trustee. Returning products in a bankruptcy proceeding is unusual, but may apply here due to the liquid nature and high value of the products.

You may want to pass this information on to people who may have received product (or cash) from Tulving after December 9, 2013. This will be unpleasant news, but knowing sooner rather than later may be helpful.

FAQ

March 12, 2014 5:05PM EST   We have added a FAQ about the Tulving fiasco here.

The Tulving Company Files for Chapter 11 Bankruptcy

March 11, 2014 8:00PM EST
We have just heard that The Tulving Company has filed for bankruptcy, effective March 10, 2014.

The case is 8:14-bk-11492-ES (click to see petition, minus creditor list). You can read the generic order here.

There are a few surprises here. First is that it is a Chapter 11 bankruptcy, which would allow for reorganization (staying in business). The second is that he lists only 9 creditors, which obviously cannot be including all customers owed metal. He lists assets as less between $0 and $50,000, much less than I would have expected.

The creditor list (showing 9 creditors) is incomplete, and will be corrected with schedules that will be attached to the voluntary petition.

Temporary Restraining Order approved

March 17, 2014 Update
On Friday, the court re-scheduled the hearing to March 18, 2014 at 1:30PM.

March 10, 2014 1:15PM EST
On Friday, a request for a temporary restraining order was filed on behalf of the class action lawsuit against The Tulving Company and Hannes Tulving, Jr. I just found out that the judge approved it this morning.

The order is good until March 17, at which point a request for an preliminary injunction will be made. A hearing is set for Monday March 17, 2014 at 9:00AM. Hannes Tulving, Jr. is ordered to appear at the hearing.

Essentially, it means that the bank account that The Tulving Company was using has been frozen, and Hannes Tulving, Jr. cannot legally sell, withdraw, loan, conceal, etc. any metal that may be owned by him or The Tulving Company.

We have a copy of the request and order if you are interested in viewing the PDFs.

Class Action Lawsuit

March 6, 2014 7:45PM
We have just heard from an attorney whose firm has just filed a class action lawsuit against The Tulving Company and Hannes Tulving personally. The case number is 3:14-cv-01054.

The attorney is Karl S. Kronenberger of KRONENBERGER ROSENFELD, LLP, and can be reached at or via phone at (415) 955-1155, x-150.

If you placed an order with The Tulving Company and have not received it, I would recommend E-mailing this attorney and giving them details of your order(s). You do not need to contact them to be a class member (unless for some reason Tulving's records are unavailable, which I would post here and to the mailing list). However, doing so will improve the case, showing the size of the problem.

If you Ordered After December 9, 2013

Please see the FAQ for details. The details relevant to you depend on whether or not you received what you were owed, and whether you were buying metal (or selling and owed money).

Chapter 11 Trustee

March 18, 2014 5:35PM EST
Still not much news.

The Tulving Company has agreed to having a Chapter 11 Trustee. There will be a meeting April 15, 2014 at 10:30AM. Of note is that it was signed by Hannes Tulving, Jr. on March 17, so at least his attorney likely knows his whereabouts. The document appears to have been faxed, allowing Hannes to avoid going out in public.

Tulving Post Mortem

March 7, 2014 1:35PM
I have put together a 'post mortem' of The Tulving Company.

It covers in great detail what happened to (and may have happened at) The Tulving Company. Spoiler: I believe it started with The Tulving Company being long gold and/or silver in the futures market in 2011, and owing a large amount of money. I believe they then sold off their inventory by mid-2012 to pay the debt, and started using customer funds at that time, causing delays of several weeks. They then tried to 'double up' on the speculative futures bets (and tried to earn income writing naked put options), which backfired in mid-April, 2013, with Tulving owing an estimated ~$40M.

Tulving Intends to File for Bankruptcy

5:19PM EST 06 Mar 2014
We have just heard from a reliable source that Tulving intends to file for bankruptcy.

A search of court records does not show any filings at this point. We will update as we get more information.

Bankruptcy?

March 4, 2014 12:18PM EST
We will update this page immediately if we hear that The Tulving Company has declared bankruptcy.

If The Tulving Company does not plan to declare bankruptcy, it seems like any 3 creditors (customers) could declare an "involuntary bankruptcy". There are restrictions for this, but they are likely met here. It sounds like involuntary bankruptcy is not commonly used, but fraud and/or ponzi schemes are typical reasons to force a company into involuntary bankruptcy. However, it appears that involuntary bankruptcy is unusual unless the company has significant assets. From the looks of things, The Tulving Company has minimal assets (however, there remains a chance that there are significant assets).

[March 17, 2014 update: The Tulving Company did file for Chapter 11 bankruptcy, which would allow the company to continue running. It may still be possible for 3 creditors to force them into Chapter 7 bankruptcy (liquidating all their assets). Court records show The Tulving Company claims less than $50,000 in assets, although I believe that amount to be somewhat higher.]

The Tulving Company is Out of Business

March 3, 2014 3:45PM EST
As we predicted/requested on Friday, The Tulving Company has gone out of business, as of Monday morning (March 3, 2014). They have not answered their phones since Friday, February 28, and we have independently confirmed that they have ceased operations, and the BBB and BCA believe this as well.

March 7, 2014 6:30AM Yesterday, a sign was placed on the door of The Tulving Company stating that they are closed, and more information will be available next week.


We hope to update this page with information about what will happen next. At this point, our best guess is that The Tulving Company will file for bankruptcy. Unfortunately, there is a good chance that there will be little in the way of available assets with which to compensate those whose orders were not fulfilled.

Tulving Phones No Longer Being Answered

March 3, 2014 2:25PM EST
We have just received two reports that The Tulving Company is not answering their phones.

In the past, they have had a notice on their website if they would not be answering the phones (e.g. for a meeting), so it looks like this is the end.

March 3, 2014 - Understanding the $42.5M Tulving Problem

I believe that The Tulving Company lost a lot of money over a period of time, most in April, 2013 (when the metals prices plummeted 20% in a matter of days), probably on COMEX. I calculate the loss to be $42.5M.

If this is the case, he has nearly $0 in the bank [March 12, 2014 update: PROVEN TRUE; he reports <$50,000 of assets], and $42.5M of outstanding orders. The only way to stay in business having lost so much money is to delay orders. If you have 1,000 outstanding orders, and 1 new order comes in, you can use the money from that new order to ship out one of the outstanding orders (instead of shipping the new order). The problem with this, of course, is that you still have 1,000 outstanding orders, and are in no better shape. That new order cannot be fulfilled until 1,000 new orders come in (at which point a different 1,000 orders will be outstanding).

Tulving was getting roughly $30M/month in orders before this started, meaning that with $42.5M lost, he would have to delay orders about 6 weeks. But, business declined as word got out about delays, so he is now doing much less business (probably around $6M/month). At $6M/month of incoming money, and a $42.5M backlog of orders, it would take almost 8 months to deliver them (but without being able to deliver the new orders).

If anyone can come up with an explanation as to what is happening with The Tulving Company that does not involve them having lost roughly $42.5M of customer money, please tell us!

March 2, 2014 - Why Tulving Is Ignoring the BBB/BCA

I finally figured out why Tulving is not responding to the BBB and BCA anymore.

Over the past few months, as he has approached the 'Tipping Point' (see below; complaints now exceeding orders), he has had to push out promised ship dates farther and farther.

The problem is that recently his promised shipping dates have hit 28-29 days after the complaint was filed.

28 days is the number of days that a California bullion dealer has to ship, per California commodities law. And the FTC requires shipment within 30 days (unless another time is given before the order).

So if Tulving responds to these complaints with a promised shipping date of, say, 35 days, then he is proving in what he writes that he is unable to fulfill even the most urgent of orders within the timeframe required by law.

So it sounds like Tulving had 3 choices: [1] Ignore the complaint, [2] Prove conclusively that he is violating the law, or [3] Lie (and later get caught lying).

Hannes, could you please do the right thing, and either file bankruptcy or if you are not insolvent come clean and explain the situation? If you need help doing so, I can try to help you.. Thank you, Hannes, for shutting down your operations and ending this.

February 28, 2014 - The End?

Addendum: Reports show that The Tulving Company is still 'in business', meaning that they are accepting money as of February 28. However, they are effectively out of business -- if they are collecting money, and stopped promising to deliver the metal, where does that leave them?

For the past week, the number of complaints reported by the BBB and BCA has gone down from about 35 per week to nearly zero.

Today, we have found out why: the BBB reported 12 complaints in the past 2 days that Tulving did not respond to!

Although the BBB has occasionally reported that Tulving has not responded to complaints, in the past it appeared to be due to the heavy volume of complaints (an average of 6 per day), and he just missed a few. But this is very different; it seems like he has just dropped the ball and is not responding to complaints anymore.

As far as we can tell, The Tulving Company is effectively out of business (and likely just tying up loose ends and/or filing for bankruptcy). [March 17, 2014 update: Correct; he was preparing for bankruptcy.]

We have had reports that they are still accepting orders/money, so it sounds like they are still trying to make good on old orders, but of course can only do so by taking new orders.

Wanted: Invoice #'s

We are looking for invoice numbers from 2013 and 2014 (earlier would be nice as well for comparing). These will help us determine how much his sales are declining each month.

If you can send the invoice number(s) and date(s) to , it would be very helpful. Feel free to "X" out the last digit (e.g. '52100X' if the order number is 521008). Thank you very much!

Tipping Point

February 19, 2014
We have gotten a ton of data about The Tulving Company. With 450+ complaints, often describing exactly what was ordered and the cost, we can find out a lot.

In the first half of 2013, he was averaging about 30 orders per day. From July, 2013 through the end of November, 2013, he averaged just 10 orders per day! In December, that went down to about 8 orders per day. In January, it is around 5 orders per day.

The problem here is that complaints are going up (see the chart at the bottom of the page). He is now getting almost exactly the same number of complaints per day as he is orders.

As complaints exceed orders (which happens because he did much more business in the past), he has to push out delivery dates that he promises to the BBB/BCA farther and farther.

And as orders go down drastically, so does your profit and ability to pay fixed costs like employees, insurance, rent, etc.

So at this point it looks like the tipping point may have been hit.

Changes to Tulving Website

At some point recently (on or after January 13, 2014), Tulving changed their FAQ page and removed the following:

6) How Do You Ship Gold, Platinum And Palladium? Currently, We Ship All Of Them UPS Next Day Air Saver ( Method, NOT time). We ship About 4-5 WORKING days after we get a wire from you.
7) Silver, you say, might take about 4-5 working days longer to ship after we get a wire longer than Gold. Yes, That Is Correct.
8) How long do "Trades" usually take? About 12 working days ( 3 Weeks).
9) How long do personal checks, cashiers checks, etc ( NON Wires) take to process and ship? The entire procedure is ABOUT 35 days.
14) When the Tulving Co. is sold out of an item, the Tulving Co. does not sell it, unless it is within 30 days. Why is that? We, like most dealers, can not sell precious metals futures. Over 30 days, in our opinion, is selling a futures contract. We avoid that situation.
16) What Is Your Shipping Policy On Paid Orders? We ALWAYS Ship On A First Paid, First Shipped Basis. In Other Words, If You Pay Earlier Than Somebody Else, You Get It Before Someone Else. If We Get In Items Earlier Than Expected, The Item (s) Go To Those That Have Already Paid For An Item. Call Us If You Need Examples. 800 995-1708
24)
H. If You Buy Or Sell $100,000 Or More And Live Locally, You Can Arrange A Meeting With Us In Costa Mesa, Ca. OR We Can P/U Or Deliver.
I. Would You Like To Pick Up Your Metal Order From Us? We Can Arrange That. Regardless Of Where You Live, You Can PU If You Order $100,000 Or More. Payment By Wire Is Required When You Order And 2 Days In Advance Of Your PU. Call To Set Up

Apparently, he thinks that by not stating delivery times, he can bypass the FTC Mail Order Rule (not true; he would have to state the actual delivery time, the default is 30 days if not specified), the California Commodity Law of 1990 (not true; it's always 28 days).

Tulving Kicked Out of Certified Coin Exchange (CCE)

The Certified Coin Exchange (CCE) is a network that bullion dealers use to trade metal. For example, if a local coin store buys 10 100oz silver bars, more than they want to keep in stock, they can use CCE to find someone (like Tulving) who would buy it from them.

Tulving used to put offers on there, and it was one of his sources of metal. He apparently would usually pay a bit more than most other dealers, and likely obtained quite a bit of metal through there.

However, we have now heard from several coin dealers that The Tulving Company was kicked out of the CCE network. The most likely explanation for this would be that Tulving was buying product from dealers, and unable to pay right away ("I'll gladly pay you Tuesday for a hamburger today.").

This appears to have happened within the first week or so of January, 2014.

Missed BBB Promises

On January 31, 2014 we discovered 2 reports that The Tulving Company did not ship orders by the dates promised to the BBB. In other words, The Tulving Company delayed thes orders for 3-5 months, and the customers complained to the BBB -- at which point, The Tulving Company promised to deliver them by a specific date, but failed to.

This is important because of the way that The Tulving Company has been handling complaints. They respond to the BBB or BCA with the date (in the future) that they will ship, rather than responding after they have shipped. As a result, we have to trust that they will ship when promised (funny, huh?).

However, their apparent inability to ship the product when promised to the BBB suggests that they may have surpassed the limit of what they can send out (in other words, money coming in from new orders is even less than expected).

*** On February 6, 2014 we confirmed that Hannes Tulving promised the BBB that an order would be shipped on January 10, 2014, that the customer alleged was not shipped. Mr. Tulving confirmed that it was not shipped, and promises that it will be shipped February 7, 2014. That is 4 weeks after originally promised to the BBB!

As of February 18, 2014, we have not discovered any more such issues, so it appears those may have been isolated issues.

Quick Note/Disclaimer

This page has just received a lot of press starting January 27 (the page was first put online in October), including many sites providing a warning of how Tulving's reputation has changed.

To clarify: the about.ag website is designed to be a source of truth for silver (and gold) investors. We do not have any direct connections with any bullion dealers. I (the maintainer of this page) have done business with The Tulving Company in the past, had excellent results, and have recommended him to many people over the years. In other words, I'm close to an impartial observer.

It is my belief is that Mr. Tulving is trying to make good for his customers, but is simply unable to. I have just reached out to Mr. Tulving, and would be happy to work with him in finding the best solution for everyone involved.

Summary

Hannes Tulving, Jr., owner of The Tulving Company, currently has outstanding orders estimated at as much as $300,000,000 (but in reality likely much lower). It appears that he currently is only able to ship out about $1M of orders per week (every Friday), presumably using money from new orders. According to information from The Tulving Company, it appears that he has taken over $500,000,000 of orders since April, 2013, knowing they would not be delivered within 30 days, violating the FTC Mail Order Rule, CA law, and his FTC consent decree.

The 400+ complaints we have tracked are all the same: people order, they call to check on the order, are given the run-around (they have an 'unusually high volume of orders', shipping limits, etc.), and never get their order. We have only heard of several people ordering from Tulving since April, 2013 who have received their order in less than 30 days.

We also have a list of the 400+ complaints here.

Where/How to Complain:

First, open a complaint with either the BBB or BCA (see below). You've got a decent chance of getting your order within 2-3 weeks that way. [March 2014 update: The Tulving Company went bankrupt; they are unable to ship metal or send cash as of this writing, see our main Tulving page for details]

Then, complain to the other organizations to help end this as quickly as possible.

BBB or BCA[Now that The Tulving Company is shut down, it is unlikely these organizations can assist; however, the BCA says they are still accepting complaints] Your first stop is one of these two (BBB: click "File a Complaint against The Tulving Company Inc", BCA: click "File Complaint". So far, Hannes Tulving has been shipping out orders complained through BBB/BCA within 2-3 weeks.
IC3IC3 (Internet Crime Complaint Center), run by the FBI and NW3C.
FTCClick on "Internet Services, Online Shopping, or Computers", then "Online Shopping" then "I never received merchandise.". The FTC went after Hannes Tulving in the early 1990s and fined him.
CA Dept. of Business OversightThese are the guys that go after bullion dealers that do not deliver within 28 days, which is illegal in California (Section 29520).
CA Attorney GeneralThe California Attorney General may get involved if they receive enough complaints.
Orange County District AttorneyYou need to sign and mail in the form.
CFTCThe Dodd-Frank Act authorizes the CFTC to investigate matters that involve bullion purchased not delivered within 28 days.
USPSThe FTC says that the USPS sometimes investigates issues like this. However, this would likely not apply if you ordered silver (which he usually ships UPS).
Newport Beach Police DepartmentApparently refers people to Costa Mesa police department. You could go through your local police department, if desired.
Costa Mesa Police DepartmentApparently refers people to the Orange County DA's office (see above).
Private AttorneySome people have had luck with a private attorney. Before filing a lawsuit, however, be aware that by the time a lawsuit is finished, Tulving could be out of business with no assets. Filing a lawsuit would likely best be used as leverage for negotiation. You may have quicker action from the BBB/BCA.

Details of the Warning

For close to two decades, The Tulving Company has been well known for almost always offering the best prices on a fairly limited selection of items, with a high minimum order, and 'no-frills' being an understatement. We would always recommend them to people who could afford the minimums, and were looking for the best prices. They had an excellent reputation until recently.

In the past, he would normally ship very quickly (often the same day he received your money).

However, starting mid-April, 2013, there were reports of serious (read: illegal) issues with delays. Complaints to the BBB increased, and it looked like there could have been a problem.

Now, things are at the point where we feel that an alert needs to be issued. There are dozens of 400+ confirmed complaints of people waiting several up to 6+ months for $10,000 to $300,000+ orders.

We do not recommend using the Tulving Company for the time being. When we first wrote this page (October, 2013), we had "for the time being" there. Unfortunately, as of this update (January 24, 2014), we cannot in good faith keep "for the time being" there. We now sadly must recommend not using The Tulving Company anymore, even if there is a miracle and there are no future issues. If you do, you can expect a 5+ month delay.

Hannes Tulving, Jr. (and his customer service rep, Karen Brooks) has told people that his insurance policy limits the amount of metal he can send per day. However, some people have expressed concern that this may have turned into a $300,000,000-or-so Ponzi-like scheme (where money received from customers today pays for orders placed months ago). If the insurance limit is true, he has more business than he can handle, and he needs less business -- so waiting to do business with him should help the situation. However, given what must be plummeting sales, the insurance expanation no longer is plausible (otherwise, we would see the delay going down).

In the past, the Tulving Company had an impeccable track record of the best no-frills prices and fast shipping. Unfortunately, that has changed, and all signs make it look like he is facing bankrupcy.

Verification

Hannes Tulving, Jr., himself, has verified an estimated 400+ complaints of delivery delays, averaging about 13 weeks and $42,000 each. All were for delays that appear to violate the FTC Mail Order Rule and the California Commodity Law of 1990 (CA § 29520).

At the beginning, the reports were near-anonymous complaints in forums, that could not easily be verified. However, Mr. Tulving has made part the verification simple by himself verifying the majority of the complaints.

Violating Their Own Policies

The Tulving Company states "We ALWAYS Ship On A First Paid, First Shipped Basis. In Other Words, If You Pay Earlier Than Somebody Else, You Always Get It Before Someone Else." However, many people have reported being told that a decision is made each day about which orders ship, and it is clear that those that complain to the BBB get their orders shipped more quickly.

The Tulving Company states "We ship About 4-5 WORKING days after we get a wire from you." (4-5 working days longer for silver) [FAQ page, 14 Oct 2013]. However, many people have reported multi-month delays.

The Tulving Company states "We, like most dealers, can not sell precious metals futures. Over 30 days, in our opinion, is selling a futures contract. We avoid that situation.". However, there are many reports of people not receiving their metal for several months.

The Tulving Company claims "All Items In Stock." However, this is quite obviously a blatant lie. Not only is it well known that he drop-ships many (or possibly now all) items, the facts make it clear he does not have a $300M inventory of bullion.

Laws Violated

FTC Mail Order Rule - Shipping Time

The U.S. Federal Trade Commission has a 'Mail Order Rule', which essentially says that orders shipped by mail must be sent within 30 days (unless a longer time is made clear to the customer). If not, the company is required to let the customer know, and give them the option of a full refund.

He is on record as having delayed orders more than 30 days on at least 400 occasions.

FTC Mail Order Rule - Refunds

The FTC Mail Order Rule requires businesses to offer customers a "full and prompt refund" if they cannot meet the original shipment date.

There are many, many cases on record where customers have requested a refund, but told flat-out that The Tulving Company does not allow refunds.

California Commodity Law of 1990 (CA § 29520)

The California Commodity Law requires bullion dealers to deliver within 28 calendar days. There are approximately 400 reports of The Tulving Company exceeding 28 day delivery time.

Hannes Tulving's FTC Consent Decree

In 1992, Hannes Tulving signed a consent decree with the FTC, which prohibits him from "misrepresenting the degree of risk or any other fact material to a consumer's decision to purchase any investment offering". Nobody would order if they knew of a 6 month delay, so that is obviously a material fact, and should violate the FTC consent decree. If he is on the brink of bankrupcy, as many believe, it would also violate the "degree of risk" portion of the consent decree.

Size of the Problem

Tulving has claimed sales of $650M in 2011. According to Hannes Tulving, "We ALWAYS Ship On A First Paid, First Shipped Basis." Given that a report on January 14 involved an order placed on June 28, 2013, that means that the current backlog would be about 6.5 months. That would be about $350,000,000 of orders that he owes customers, that have not shipped yet.

Since the problem started approximately April 12, 2013, as of January 12, 2014, that would be nearly $500M of orders that he took knowing that they could not be delivered within the 28-30 days required by law.

In reality, we do not believe that the actual numbers are that high. We believe his business was less than $650M/year when this started (although there is a report of him claiming in June 2013 of having "record sales"), and we know that orders are not first paid, first shipped.

There may be as many as 10,000 people waiting for their orders (according to Tulving's statements; I estimate the number as closer to 1,000), that have not received them yet.

Our estimate is that at least 90% of all orders (and quite possibly closer to 99%) are delayed at least 30 days (violating the laws mentionedabove).

Is Tulving a Con Artist?

No.

It appears that in the late 1980s he lead an extravagant lifestyle, and went bankrupt with an FTC consent decree. However, it is clear that he changed completely. He starting tulving.com in 1995, and built up an excellent reputation. For over 15 years, he built up trust and earned a reputation for having the best prices and shipping quickly. Nobody warned against doing business with him. Very, very few people had any complaints (the typical ones being from people who could not afford the minimum orders, and Mr. Tulving being 'gruff').

Certainly, things have changed completely over the past year or two -- and it is clear to many that he is operating illegally, by taking orders he knows he cannot ship within 28-30 days.

However, from what we have seen, he always confirms wire transfers after receiving them. He almost always ships out orders on the date promised to the BBB/BCA. From what we can tell, when he has the money in the bank to fulfill orders, he always does.

It is clear that he has no intent on skipping town with money from customer orders and is not leading an extravagant lifestyle (how can you, if you take orders at 2AM?). There is simply a problem preventing him from getting orders out in a timely fashion (that we believe is due to a large amount of lost money, likely due to hedging gone wrong).

At this point, we would strongly warn against doing business with him, we also feel we should go on the record that we feel that the delays are due to problems that are now beyond his control.

Sample Compaints

There are anonymous complaints on many message boards (see goldismoney2.com - 'past the 3 months late mark.', golddealerreviews.com (customer of 7 years waiting 2-3 months for delivery, 3 month wait, etc.), bullionstacker.com (sent 220oz of gold, no payment in over 3 weeks).

The BBB (and here) has over 200 complaints, with the Business Consumer Alliance showing over 150 complaints.

When we first wrote this, the most recent 5 complaints from BCA were typical:

  • Paid May 14, 2013 for 40 1oz gold Eagles, 126 days have elapsed without receiving. Tulving's response: They will ship by Wednesday.
  • Ordered $11,670 of American Eagle Silver Coins on July 30, 2013, over 2 months without receiving. Tulving's response: They shipped the day they responded.
  • $13,090 of American Silver Eagles, 'same as all the rest of the complaints' (no details on date ordered, etc.). Tulving's response: They shipped the day they responded.
  • $27,025 of American Silver Eagles. Promised delivery in 8-10 business days. Wire sent 9/4, not received as of 9/27 (17 business days). Tulving's response: They will ship by 10/7.
  • $206,330 of in-stock Canadian Wildlife silver bullion coins. Wired money April 12, as of September 23 not received (5 months later). Ended up settling with Tulving by 'selling back' the coins at a $30,000 loss to the customer!

Complaint Volume:

As of 17 Mar 2014, we have tracked 685 complaints in 2013-2014:

Month# Complaints# ComplaintsAverage DelayDays to BCA delivery
January, 2013   n/an/a
February, 2013 **23.5 weeksn/a
March, 2013   n/an/a
April, 2013   n/an/a
May, 2013   n/an/a
June, 2013 *****58 weeks3
July, 2013 ******67 weeks9
August, 2013 *****************1711.7 weeks4
September, 2013**********************2212.4 weeks9
October, 2013 *********************************************************5712.2 weeks10
November, 2013 ****************************************************************6413.9 weeks9
December, 2013 *************************************************************************7313.1 weeks16
January, 2014 *****************************************************************************************************************************12515.5 weeks16
February, 2014 *************************************************************************************************************************************13315.7 weeks23
March, 2014
(est. based on 3/1-3/14)
**************************************************************************************************************************************134n/an/a

NOTES: 'Days to BCA delivery' is the time from a complaint until the promised delivery date (usually via the BCA). This is important, as it shows how backed up Tulving truly is.

The average delay is based on how long it takes from the time payment cleared until the complaint was lodged or the product was delivered (if known). In some cases, estimates were used (e.g. is a '3 month delay' 12, 13, 14 weeks?). A few complaints may be duplicates (e.g. when someone complaints to BBB and BCA).

Remember, the average delay is skewed, as it is based on when customers complain publicly, which is earlier than when they received the product. So the average 12-13 week delay seen in recent month likely means that most people that will complain publicly will do so around that time period.

Old Status Updates

[First posted: ~October 11, 2013]

[16 Jan 2014 Update: We are now at 303 complaints logged, for an estimated $13.8M of orders!]

[06 Jan 2014 Update: BBB changed this around; the old page did not show new complaints. They now give Tulving a D- (changed from no rating), and have the text of some complaints online (partially censored). We are now at 257 complaints logged, for an estimated $11M of orders!]

[11 Dec 2013 Update: The Tulving Company has expanded their order hours (4 more hours per day). November complaints up slightly over October. No patterns detected worthy of mentioning, although December complaints appear to be down a bit. BBB may be censoring (not showing all complaints). Hannes Tulving seems to now be responding to complaints once a week.]

[13 Nov 2013 Update: For the first half(ish) of November, the number of complaints has gone down about 25%, suggesting that the end is near -- either Tulving is back on track slowly heading towards normal shipping, or 'the jig is up'.]

[As of 01 Nov 2013, we have tracked 111 complaints of delivery delays this year, averaging about $70,000 per order, for an estimated $7,566,612.00 of orders delayed about 3-5 months:]



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