RM Auction in Battersea, some nice cars available

[jonby]

In relation to the various stories about Coys, client accounts and re-starting, I'd say this

If there are no rules by way of legislation and if buyers don't check but 'assume' a client (escrow) account exists, whilst I'm not condoning for one moment what happened, I believe blame can't be laid entirely at the auctioneer's door. They presumably didn't intend to go bust (very few do) and therefore presumably didn't steal any client's money. I've posted earlier that Sothebys & Christies don't have client accounts (according the article from earlier this year, where the 2 houses themselves appear to admit same), so what Coys did that was 'wrong' was fail as a firm financially - legislation needs to change, not auctioneers

I can't quite believe I've said what I just did, because reading stories like the one posted above make my blood boil, but I think there are times when some responsibility needs to be taken by others. I always read small print and act carefully - I for instance never leave a deposit by anything other than credit card and I refused to transfer the money for my last audi til I was at the showroom and with the car- they were offended and said 'we're audi' - I replied your not audi your a dealer and even audi can go bust - they thought I was mad, I was just being prudent

I get a little miffed by all these various compensation schemes for mis sold PPI, mortgages, etc when in reality, I believe consumers have a responsibility to read the small print and check what they are about to enter in to. I would never consign anyhting to anyone, let alone my 'pension', without checking first but I'm naturally cynical !

[will_]

jonby said:

In relation to the various stories about Coys, client accounts and re-starting, I'd say this

If there are no rules by way of legislation and if buyers don't check but 'assume' a client (escrow) account exists, whilst I'm not condoning for one moment what happened, I believe blame can't be laid entirely at the auctioneer's door. They presumably didn't intend to go bust (very few do) and therefore presumably didn't steal any client's money. I've posted earlier that Sothebys & Christies don't have client accounts (according the article from earlier this year, where the 2 houses themselves appear to admit same), so what Coys did that was 'wrong' was fail as a firm financially - legislation needs to change, not auctioneers

I can't quite believe I've said what I just did, because reading stories like the one posted above make my blood boil, but I think there are times when some responsibility needs to be taken by others.

In relation to Coys I simply can't agree.

The fact that "Coys" were holding auctions barely months later (under a different company, and boasting that money would be held in a client account), let alone that they are still in business and presumably making money, is a disgrace unless all the injured parties have received all that they were owed.

It is an element of corporate structures that really needs to be stopped. The corporate veil should be lifted in circumstances such as these and the directors held personally liable. That can happen, but very rarely does.

There is never any excuse, ever, for using money which rightly (if not legally) belongs to others to pay your own creditors.

I hear what you say about people taking responsibility, but these are complex legal, commercial and insolvency issues and auction houses are not always transparent. They run off their reputations and people trust them. That trust should not be abused.

[jonby]

100 IAN said:

Jonby your comments are very educational. Having gone to many many auctions and spent thousands £'s buying at them i'm still always apprehensive as i'm never 100% sure i know exactly what's going on.

I know that when the auctioneer says "i'm selling" that the reserve has been reached but can you enlighten me of any other phrases.

I've always assumed that when they say "with me at £x" that refers to a bid that has been submitted before the start of the auction? or does it refer to a ficticious bid as the auctioneer is trying to reach the reserve?

Some auctioneers are easier to read than others. I recently went to a property auction where with only a handful of people in the room the auctioneer took obvious bids 'off the wall' and then in 4 out of 5 cases said "sorry not enough" and didn't drop the hammer. It happened on so many lots that everyone sniggered.

When he got a real bid his whole manner changed, he became much calmer, more relaxed and slowed his pace a little. He was clearly uncomfortable with the lots that he didn't get real bids for.

Other auctioneers whilst they may say "sold" sometimes don't bang the hammer which i assume means that reserve hasn't been met and the item hasn't actually sold - ?

Thanks Jonby for any insight you can give.

hmmmmm - it's difficult to answer because each auctioneer is different and such tiny little subtle nuanced differences in what or how it's said can mean a lot !

'with me' could mean on behalf of the vendor to get close to the reserve, or could mean on behalf of a commission/absentee bidder. More likely to be the former though. as you say, some are easier to read than others

I've always tried to be very transparent in my style because I think if you make the buyers comfortable, in every sense, then you'll get more money which is what my job is at the end of the day. the more you look like you're hiding things, the more you put off buyers IMO

property auctions tend to be dominated by lots that just scrape over the line (reserve) so that practice is a little more understandable

there's no question that an auctioneer's worst nightmare, which happens once in a while, is an empty room of unresponsive bidders who udnerstandably, can then smell blood. you can either put on a brave face and try to pretend it's not happening, or panic, or do what I do - be honest and open about it, explain you have duty to protect your vendors, admit the room is bare and explain you're going to come up with a sensible opening price in each lot and if no-one is prepared to start there, you'll move on

if they say 'sold' without banging the hammer (or gavel! though I still sometimes say hammer...) that shouldn't make any difference - you shouldn't say sold unless it has indeed sold

commission bids are an interesting one. I'm sure we've all seen the various programmes on TV like flog-it et al. You can see 2 different approaches. One is to start with the absentee bidder's total max bid - I hate seeing that with a passion ! The other is to start in the room and use the commission bid as a maximum, buying the lot as cheaply as possible. That's what I do. There are a few instances where you might use a middle ground. One example is if you can't get the bidding started in the room - you might start on behalf of the commission bidder at say 70% of what his max bid. You can hopefully see that there is no question the auctioneer is incredibly conflicted with a commission bid. If an auctioneer always sells to commission bidders at their maximum, bidders soom realise and stop leaving them, finding ways of phone or internet bidding instead

There are also by the way plenty of bidders who have bad practices too - it's not just the auctioneers ! Some insist that you don't point them out whilst bidding - I've had people use all kinds of methods to indicate they are bidding. It is a game, sometimes bordering on feeling like a battle, between auctioneer & bidder. As auctioneer you must establish early on that you are in control and fearless !

Bidders will try to manipulate the situation too - cartels, constantly dropping the increment to try to put off other bidders, deliberately waiting on every bid til you are about to drop the hammer trying to frustrate the other buyers, interrupting, all sorts....

[jonby]

will_ said:

jonby said:

In relation to the various stories about Coys, client accounts and re-starting, I'd say this

If there are no rules by way of legislation and if buyers don't check but 'assume' a client (escrow) account exists, whilst I'm not condoning for one moment what happened, I believe blame can't be laid entirely at the auctioneer's door. They presumably didn't intend to go bust (very few do) and therefore presumably didn't steal any client's money. I've posted earlier that Sothebys & Christies don't have client accounts (according the article from earlier this year, where the 2 houses themselves appear to admit same), so what Coys did that was 'wrong' was fail as a firm financially - legislation needs to change, not auctioneers

I can't quite believe I've said what I just did, because reading stories like the one posted above make my blood boil, but I think there are times when some responsibility needs to be taken by others.

In relation to Coys I simply can't agree.

The fact that "Coys" were holding auctions barely months later (under a different company, and boasting that money would be held in a client account), let alone that they are still in business and presumably making money, is a disgrace unless all the injured parties have received all that they were owed.

It is an element of corporate structures that really needs to be stopped. The corporate veil should be lifted in circumstances such as these and the directors held personally liable. That can happen, but very rarely does.

There is never any excuse, ever, for using money which rightly (if not legally) belongs to others to pay your own creditors.

I hear what you say about people taking responsibility, but these are complex legal, commercial and insolvency issues and auction houses are not always transparent. They run off their reputations and people trust them. That trust should not be abused.

Well hopefully you can tell by my response that I am torn in my thoughts - I don't totally disagree, I can just see several angles here

But when it comes to insolvency, this is a much wider issue that goes way beyond auctioneers. We have a legal structure that says if a limited company goes bust, directors are protected unless it can be proven they defrauded or traded whilst knowingly insolvent. In the former instance, if proven, they become barred from being a director. In the latter, the problem is that it's almost impossible to prove and rarely prosecuted - for instance most football clubs in this country are probably technically insolvent

So if a director of a company that enters into liquidation decides to start another business, be it in that industry or any other, there's nothing to stop him if he's not been barred. I don't expect you to agree but I promise you, if you take your argument to the nth degree and try coming up with a practical system to avoid this, you'll struggle. You keep coming back to the same thing, either you prove they did wrong and punish them, or you can't do anything

Going back to client accounts, I'm a passionate believer in them, as my other posts hopefully show. But I'm sorry, if there's no legal requirement to do it and if the auctioneer doesn't lie and say they do when they don't, you're on weak ground

Almost all business trade with their customers cash. Look at the situation with Comet at the moment. Look what happened when Courts went bust. Retailers buy stock on credit and are constantly juggling money, robbing Peter to pay Paul. I'm dealing with a wedding dress chain of shops that's just gone bust at the moment.......just think through some of the issues there ! And this one was run by a straight guy who's invested (lost) a 6 figure sum in the enterprise. But all the creditors will assume he's a crook....

Proving or even deciding whether a director of an insolvent company is dishonest, foolish, incompetent, desparate, deliberate, unlucky, etc is not always easy, even with all the facts

[will_]

jonby said:

Well hopefully you can tell by my response that I am torn in my thoughts - I don't totally disagree, I can just see several angles here

Indeed, and you make sensible points. I have a good understanding of the issues.

Keeping this a bit "on topic" I have a very cynical view of Coys having read the detail of the articles. People can come to their own views as to whether the whole thing was carefully orchestrated or not. However I can entirely understand the frustration of the creditors when they are out of pocket but, at the broadest level, the "business" is continuing as it did before. Even when the law is lacking there should be simple decency and morals when dealing with customers' money. Sadly that doesn't always happen but it says a lot about the people behind the business.

[P300V8]

jonby said:

.....For instance, a buyer may place a value on an item based on what it;s worth to them and of course this is influenced by need but what happens if they can;t access funds/finance to pay for it - he won't be able to bid so can;t influence the price but may after think it's sold cheap or dear. So if it goes for less than this person would say it's worth to them , has it still achieved market value ? Arguably yes....

I don't seek to undermine your knowledge base but I think there is a whiff of red herring here...

1/ An individual can decide the worth of something without bidding on it.
2/ The selling price is the market price on the day.
3/ You are confusing market price with market value

[jonby]

P300V8 said:

jonby said:

.....For instance, a buyer may place a value on an item based on what it;s worth to them and of course this is influenced by need but what happens if they can;t access funds/finance to pay for it - he won't be able to bid so can;t influence the price but may after think it's sold cheap or dear. So if it goes for less than this person would say it's worth to them , has it still achieved market value ? Arguably yes....

I don't seek to undermine your knowledge base but I think there is a whiff of red herring here...

1/ An individual can decide the worth of something without bidding on it.
2/ The selling price is the market price on the day.
3/ You are confusing market price with market value

I don't actually disagree - my point was simply that there are a number of non-conflicting definitions of value/worth. Many people on here thought the 'egg went cheap, including myself, but none of us out bid the winning bidder ! So was it cheap ? No right or wrong answer, depends on which hat you're wearing

[jonby]

will_ said:

jonby said:

Well hopefully you can tell by my response that I am torn in my thoughts - I don't totally disagree, I can just see several angles here

Indeed, and you make sensible points. I have a good understanding of the issues.

Keeping this a bit "on topic" I have a very cynical view of Coys having read the detail of the articles. People can come to their own views as to whether the whole thing was carefully orchestrated or not. However I can entirely understand the frustration of the creditors when they are out of pocket but, at the broadest level, the "business" is continuing as it did before. Even when the law is lacking there should be simple decency and morals when dealing with customers' money. Sadly that doesn't always happen but it says a lot about the people behind the business.

I'm in a difficult position because I don't want to comment specifically about a firm I have so little knowledge of, as much to protect myself as anything else ! Some of you on here have patently followed the story more closely than I have

But the bulk of what I do professionally relates to insolvency, so that's something I understand very well. I understand the frustrations for creditors and I understand the difficulties in doing anything about it. I'm not suggesting you aren't aware of the issues too of course !

(hopefully I'm not insulting your intelligence with this next bit) Let's look generally: a company enters into liquidation, the liquidator and their agent look to sell the business which is effectively the assets of the company - physical assets, goodwill, IPR, etc. Excluded from the sale would normally be book debts and liabilities (monies owed to or by the company)

So let's say a completely independant third party makes an offer, using a new company (newco) as the bidding vehicle, to buy 'the business', which effectively means the assets of the company. Now lets say that the former director of the company in liquidation (oldco) also sets up a new company and bids for the business, at a higher level (put to one side for one moment the important but separate issue of whether everyone is bidding on a fair playing field)

Does the liquidator accept the lower bid from the third party or the higher bid from the former director, knowing that he has a responsibility to maximise the realisation for the creditors who can techinically sue him if he doesn't ? He can't of course

Now I appreciate you may know all this. But what most people outside the industry struggle to separate is the process I've outlined above, from the issue of whether the director should be allowed to be in business at all. Instead, they see 'the business is continuing as it did before' and very understandably, become upset. But the issue, IMHO, really isn't that. The issue is did the director behave fraudulently, in which case he should not be allowed to run ANY business, not whether a director should be allowed to buy the assets of oldco using a newco

You can't (and shouldn't IMO) exclude a former connected party from the bidding process - let's face it, they would just use a relative if they did. But there should be more prosecutions of fraudulent directos of running any businesses

As for decency & morals, of course you are 100% right. But whether you call it cynical or realist, probably jaded by the industry I work in, I simply don't have very high expectations of most people in that respect - shame, but tends to be prudent !

Incidentally, I was a punter caught out by Crown Currency. I lost £1,000 which I'd sent off to buy euros. I saw they were members of some association or other, did my research, realised there was no protection and took the calculated gamble. The directors there are crooks - they stole millions. Little will be recovered. I'll not get a penny. Some customers are in an awful position having lost life savings - I feel dreadfully sorry for them, they have no protection or comeback. As I say, I'm a cynic and always assume the worse !

[will_]

jonby said:

Now I appreciate you may know all this. But what most people outside the industry struggle to separate is the process I've outlined above, from the issue of whether the director should be allowed to be in business at all. Instead, they see 'the business is continuing as it did before' and very understandably, become upset. But the issue, IMHO, really isn't that. The issue is did the director behave fraudulently, in which case he should not be allowed to run ANY business, not whether a director should be allowed to buy the assets of oldco using a newco

You can't (and shouldn't IMO) exclude a former connected party from the bidding process - let's face it, they would just use a relative if they did. But there should be more prosecutions of fraudulent directos of running any businesses

As for decency & morals, of course you are 100% right. But whether you call it cynical or realist, probably jaded by the industry I work in, I simply don't have very high expectations of most people in that respect - shame, but tends to be prudent !

Another good post, which I'ved edited to the core bits from my perspective.

My personal view is that the corporate veil should be lifted more regularly. It acts as a protection for the unscrupulous and crooked. There aren't the resources to investigate each failing business, but something is going very wrong when individuals can close one business (owing thousands to innocent creditors) whilst concurrently running a similar sounding business undertaking the same work and (presumably) making a profit.

I get that it's the game and that's how it's played. But the benefits of having legal entities so distinct from the individuals behind them are, in my view, outweighed by the capacity for such structures to allow what I can really only see as theft.

However I don't have a solution because it is a difficuly, situation dependent, issue. Like you, though, I do think it should be taken more seriously and investigated more thoroughly.

ETA - sorry to take the thread off-topic.

[P300V8]

jonby said:

I don't actually disagree - my point was simply that there are a number of non-conflicting definitions of value/worth. Many people on here thought the 'egg went cheap, including myself, but none of us out bid the winning bidder ! So was it cheap ? No right or wrong answer, depends on which hat you're wearing

Excellent - we are on the same page! If you use my (buyers perspective) model "cheap" is subjective and therefore never right or wrong. The seller/owner/auction house perspective would of course be different.

This of course leads to the thorny subject of sellers valuation and willingness to meet the market on the day - but I won't go there! Personally I abhor the practice of auction house bids in the room even below reserve. I was at RM and it was painful to witness the auctioneer trying to milk a reluctant cow!

[will_]

P300V8 said:

I was at RM and it was painful to witness the auctioneer trying to milk a reluctant cow!

The best option then is to start the bidding at the reserve, but presumably there is a school of thought that says a better price is achieved if a bit of momentum is added to the bidding process.

[jonby]

will_ said:

My personal view is that the corporate veil should be lifted more regularly. It acts as a protection for the unscrupulous and crooked. There aren't the resources to investigate each failing business, but something is going very wrong when individuals can close one business (owing thousands to innocent creditors) whilst concurrently running a similar sounding business undertaking the same work and (presumably) making a profit.

I get that it's the game and that's how it's played. But the benefits of having legal entities so distinct from the individuals behind them are, in my view, outweighed by the capacity for such structures to allow what I can really only see as theft.

agree with some caveats. firstly, I just don't see what difference it makes whether it's a similar business, other than if it's done in a way that people don't realise there's a newco (section 216 offence in the insolvency act) - you shouldn't be allowed to be in business full stop if you've defrauded.

Secondly, a business which closes owing money to innocent creditors has not necessarily done anything wrong. If I had the proverbial pound for every time a creditor suspects a director has been deceitful when in fact the director is the largest creditor and in reverse, for when they think the director is unlucky when I suspect he's a con-artist.............I'd have about £1,000 ! :-)

And thirdly, flawed though it is, I don't see how a capitalist economy would work without having limited companies. It's not question of disagreeing with your sentiment, just the raw practicalities - who would start a business if they were personally liable if it went wrong

So you get back to investigation and the onus of proof - criminals will always be one step ahead, whether it's drug cheats in sport or business cheats....

[Davey S2]

Wasn't Harry Metcalfe originally intending to put his Ferrari 330 in this auction but withdrew it when RM wanted to put the reserve at about £100K which he thought was too low?

Believe he sold it for around £130K through SOR with a dealer.

[jonby]

will_ said:

P300V8 said:

I was at RM and it was painful to witness the auctioneer trying to milk a reluctant cow!

The best option then is to start the bidding at the reserve, but presumably there is a school of thought that says a better price is achieved if a bit of momentum is added to the bidding process.

Remember it's a two way street. Buyers are often incredibly reluctant to start the bidding at any level. Many bidders will NEVER start the bidding as a point of principle. The auctioneer's job (IMO) is to make things happen

I remember a P&M sale about 5 yrs ago, on-site (away from our place) where there were just 30 or so lots and only a handful of buyers. All the buyers were specialist dealers in what we were selling. Machines that I know they would be more than happy to bid 50k+ for, I couldnt even get them to start at 10k. They just stood there staring at me. When the bidding did get started, every bid was like extracting teeth. Slow & painful ! What do you do ?

I had to get very tough, very rude and carry out some threats in terms of how I would treat lots. They soon got the message but it was very difficult - 10 yrs earlier and I'd not have had the experience or courage to do what I did then

[jonby]

Davey S2 said:

Wasn't Harry Metcalfe originally intending to put his Ferrari 330 in this auction but withdrew it when RM wanted to put the reserve at about £100K which he thought was too low?

Believe he sold it for around £130K through SOR with a dealer.

don;t know but in fairness, it's good that the auction house refuse if they aren't comfortable there's a good chance of reserve being met as it's not in the interests of either party to proceed otherwise

We have a sales rate of 99%+ (not a fair comparison with RM, very different market) and in ensuring that, it makes buyers comfortable the stuff is there to be sold. And of course that the auction is profitable for us......

Just don't go down the road of premiums & commissions !!!!

[Cheib]

The Merc Pullman only got bids up to £75k....that amazes me for some reason.

[rubystone]

Imagine my surprise at an auction recently where it appeared that I was bidding on a car up to its reserve price...at least the auctioneer did appear to be nodding in my direction....it's standard procedure to take bids of the wall up to the reserve and nothing illegal about that practice either.

As I have said on another thread, the strong prices at the recent RM auction are no surprise to me. I watched Rob Myers work the room once and he does a bloody good job of it too. He knows all the big buyers and his team know them too.

That's why I don't bother to attend his auctions now; I know that I would end up paying over the odds.

[TKF]

It's shocking that the Merc didn't sell. The quality of work on it was incredible.

I mean, who wouldn't love something made by a bloke in a Lithuanian warehouse out of foam and cardboard?

http://englishrussia.com/2008/05/29/lithuanians-an...

[ilovevolvo]

dtmpower said:

Is it an open venue ?

Yes you will need a catalogue to get in but admits two

[rubystone]

Chris Evans had half a dozen of his own cars there...both Dinos, the Esprit...and apparently is engaging in a bit of trading...enough to turn John Collins to drink...maybe that's why he was carrying a bag of Budweisers around with him...