[Summary: Tulving ceased operations Mar. 3, filed for bankruptcy Mar. 10, after many reports of multi-month delays]
[Other Tulving pages: FAQ, Old News, Post-Mortem, Order Volume, $42.5M Calculation, PDFs, Tips, Meetings #1, #2]
Tulving, CFTC and the TruthSeptember 28, 2015 4:25PM EST
Given how disturbing the CFTC Press Release and complaint were, I have set up a page Tulving, CFTC, and the Truth (Oh my!).
I wish to make it clear that I am not trying to defend what happened. The U.S. Attorney's office determined that what happened was wrong, and Mr. Tulving agreed to plead guilty to a charge of wire fraud. That is how the justice system works. What is not acceptable, however, is for a government agency to (from what I can tell, intentionally) mislead the public. What they did tries to re-write history, and take a company that was successful for 2 decades and make it "disappear" by saying that it did not do $2B+ in transactions, and was not an established and reputable dealer. This in effect portrays Tulving customers as fools -- people who got suckered by a con artist who made wild claims, when in fact most Tulving creditors were either repeat customers or referred from repeat customers.
To me, it seems like the CFTC acted with reckless disregard to the truth. I did contact the CFTC a few days ago to alert them to my article, and have not heard back. I will be happy to do anything I can to assist in getting the truth out. This was so out of line that I was unable to see through the misinformation to see what merit, if any, the lawsuit may have.
CFTC Complaint UpdateSeptember 13, 2015 4:20AM EST
I think I have to call the CFTC on Monday.
Their press release has the appearance of a complete farce. It appears that the CFTC missed that The Tulving Company was indeed a highly reputable, stable, and established precious metals firm from 1999 through some time around roughly 2011. It appears they think that Mr. Tulving started up shop around August 2013, took in $17.8M and skipped town (as is the case with the subjects of many of the CFTC enforcement actions).
For example, it says "The Defendants allegedly purchased and sold little or no precious metals with the funds they collected from customers. Instead, according to the Complaint, the Defendants defrauded customers by lying to them and misappropriating their funds for improper and unauthorized uses, including for the Defendants’ own financial benefit.". As most people reading this know, The Tulving Company did indeed take many orders that it was unable to deliver. However, I have proof (gathered by a 501(c)(6) non-profit organization) that at least $8.1M of metal was shipped in the Relevant Period, and court documents show only $26,437 (0.14% of the $17.8M) went directly Mr. Tulving during the Relevant Period.
So at best, the Press Release is highly misleading.
CFTC Files Civil ComplaintSeptember 11, 2015 8:20PM EST
The CFTC filed a civil complaint today against The Tulving Company and Mr. Tulving.
I will likely post more about this tomorrow, but I am quite surprised at first glance. Reading the press release makes it sound like The Tulving Company was never a reputable business (which it was, until the end). It also says that Mr. Tulving handled all funds received; however, the information I have shows that he was not even a signatory on the bank account. At first glance, it almost appears that this complaint was mixed with that of another company, and gives me grave doubts about the CFTC. But please note, this is after the briefest review; I expect to write more tomorrow.
Hearing Thursday in Criminal CaseAugust 18, 2015 2:10PM EST
On Thursday at 9:30AM there will be a hearing in Charlotte, NC. The purpose is for Mr. Tulving to enter a plea of guilty. Creditors are allowed to go and/or speak (you need to call ahead to speak). According to the U.S. Attorney's office, Mr. Tulving has already plead guilty. Because of the guilty plea, there will be no trial. The sentencing date is expected to be within about 6 months to 1 year.
UPDATE 20 Aug 2015 1:40PM: The hearing was held, and a guilty plea was entered.
E-mail from U.S. Department of JusticeAugust 13, 2015 2:30PM EST
I have heard from a Tulving customer that they received an E-mail today from the U.S. Department of Justice, regarding the criminal charge against Mr. Tulving.
Many of the documents have been sealed, and I am not a Tulving customer, so I cannot access the notification website and any notifications or documents that may be there.
What I do know is that a Plea Agreement was filed, as well as a Summons, and a Plea Hearing is set for August 20.
Bullion Direct UpdateJuly 29, 2015 1:25PM EST
Earlier, I reported that Bullion Direct was out of business.
It turns out that they have admitted to "not purchasing" metal that customers bought and stored with them (to the tune of an expected $25M+). In other words, you would send them a check for metal, they would say "OK, that metal is in your portfolio", but instead of buying the metal with your cash they would spend the money.
A-Mark/CFC Motion to Sell CollateralJuly 29, 2015 1:15PM EST
A-Mark's subsidiary CFC has filed a motion for relief from the automatic stay, which would allow them to sell the coins they are holding as collateral. They are valued at face value ($173,642), to cover a debt with principal of $175,600 and $44,631.66 of accrued interest (since the bankruptcy petition; the loan was current until then) and $7,079.50 in fees, totalling $227,311.16.
The valuation at face value is an immediate red flag, but further investigation shows that these coins (it looks like presidential dollar coins and rolls of quarters) do not even get high premiums on eBay. Unless they were proof, mostly high graded, or error coins, I cannot imagine a much higher valuation.
UPDATE: These are not the coins that were seized by the Secret Service (which have valuations from $300K to around $20M). These are separate, and have been in possession of A-Mark's subsidiary CFC since 2008. CFC loaned The Tulving Company some money around 2008, using these coins as collateral, and now is using the collateral since The Tulving Company now cannot pay back the loan (since it is in bankruptcy).
Plea Agreement FiledJuly 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 IssuesJuly 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  They did not respond, and  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 #6July 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 BusinessJuly 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 UpdateJune 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 PartnerJune 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 ClosedJune 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 UpdateJune 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.
QuietMay 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 SafetyApril 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 CompromiseMarch 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.
TaxesFebruary 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 FeesFebruary 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.
DocumentFebruary 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 ExpensesFebruary 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.
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 throuugh May, 2014,
I will likely go through the applications and report some information from them.
Trustee Report #5 Released - Good News, Bad NewsJanuary 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.
Two Theories Ruled OutJanuary 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.
Reminder: Tips WantedJanuary 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 $150,000January 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-MarkJanuary 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 TheoryJanuary 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 11January 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 CoinsJanuary 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 UpdateJanuary 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 SubpoenadDecember 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 BidDecember 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 RecordsDecember 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 MotionNovember 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 customer list is 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 ReportOctober 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.).
More Tips WantedOctober 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:
Trustee Report #4 ReleasedOctober 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 StandOctober 16, 2014 1:30PM EST
Last Updated October 16, 2014 1:30PM EST: (Safe likely contains no bullion)
Claims and Money Owed:
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.
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 TransactionOctober 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 LoanOctober 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 - ExpensesOctober 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.
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 TipsOctober 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 UpdateOctober 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:
A-Mark's Claim Comes InSeptember 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 $15MSeptember 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 ClaimsSeptember 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 ClaimSeptember 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:
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 TuesdaySeptember 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 MonthSeptember 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 AvailableSeptember 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 SealedSeptember 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 InvestigationSeptember 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 $18,671,529.98September 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:
Mailing ListIf 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 WantedJune 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 OmbudsmanSeptember 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.
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.
Older Tulving InformationI occasionally 'prune' this page, as it gets very big -- you can go to the Older Tulving Information page for older information.
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