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[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]

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  • Any Tulving Company financial details, such as accounting reports/records/statements (these would not be published, but would be very helpful to back up other information I have, and to have an extra set of eyes looking for anomalies)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.

Older Tulving Information

I 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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