I have absolutely no doubts a court would consider it impossible to transfer goods under consignment to a different entity free of the burden of the consignment contract. So the corporation trying to reach into the franchise to grab these goods without honoring the contract is absolute BS and they should be dragged through the mud over it.
The unfortunate loophole here is that, potentially, by shutting down that franchise in a bankruptcy the corporation may end up being preferred for being made whole on debts relative to the consigner. Bankruptcy is complicated so while I am pretty sure any remaining goods from the consignment would be returned to the original owner the proceeds from sales that were successfully made might end up in the pocket of the corporation.
Personally, I absolutely loathe consignment. It is an incredibly complex agreement with a lot of weird edge cases about deprecation of goods and the duty to seek a good price that get complex quick. If you have goods like this and can find a store that will buy your goods in bulk you should be very careful in considering how much you care about the price difference between that bulk price and the percentage they list for consignment. A single transaction is usually much cleaner and easier for both sides and in this case (trying to pay for medical costs) having the money immediately can be quite attractive.
If you look at the latest stuff from the previous owner where they recorded multiple conversations / pulled security footage... https://www.youtube.com/watch?v=zedmOopRTm0 1, they were allowed to do consignment deals, 2, when corporate took control, they said they'd take on the consignment liability, 3, BAM outright threatens them with making the legal process too expensive for them.
All of which contradicts the current corporate response
yeah, it’s plain as day they say blatantly they’ll take on the consignment.
the reckless ben youtube videos are pretty clearly laid out with contracts, video evidence, etc..
the crazy part to me is how blatant the executives of bricks and minifigs are in saying go ahead and try to sue us, we’ll drag this out until you’re broke from lawyers fees. we’re a lawyer rich corp and you’re not. they don’t even try to hide it.
bricks and minifigs are just crazy dickens movie tier evil it’s crazy.
Unfortunately this makes every Bricks and Minifigs store a risk to do business with, selling or buying. You're either supporting a criminal enterprise or risking being a victim of one.
"the crazy part to me is how blatant the executives of bricks and minifigs are in saying go ahead and try to sue us, we’ll drag this out "
To my experience this is a common strategy in disputes when the corporate party has people who operate as uncivilized brutes. I think it's part of the McKinseyfication of companies - profits at all cost - and here's the playbook.
My personal experience is from private parking control. Rather than be professional about my reclamation, their first response was "only criminals dispute these and we win all the court cases".
So I think trying to be imposing and villanous to scare the other non-corporate party to back off is a common global corporate playbook in situations in matters where companies enter contractual complex space with individuals.
Very rarely do corporations act like this once there’s any sort of spotlight on them. Especially over such a relatively small number. This is nothing to do with any standard corporate tactics and everything to do with the guys in charge being complete dick heads.
I wish it was so as well but
"When McKinsey Comes To Town" by Bogdanich and Forsythe
documents exactly standard tactics such as these in e.g. insurance.
Sign of the times. It's not enough to be rich and powerful, the goal is to be able to gloat about your impunity. Little Epsteins.
That has always been the goal. There is, has, and always will be a powerful caste system to ensure that they are gods and we are trash. "Stay in your lane" / "Know your place" / etc. have been watchwords for thousands of years.
yeah you cant just unilaterally cancel the contract in which you agreed to hold the goods for sale, and then take possession without any reimbursement.
You either need to pay the sales price of the consigned items, or just give them back.
If you do neither, its the same exact thing as theft. Which is what they did. They took possession of the 200k lego set with no reimbursement. Just plain ol' theft.
When this is so clearly theft, how can the police just claim “it’s a civil matter”?
They seem to like that excuse, I know… but gahhh!
The police are under no obligation to provide service to specific people or businesses, only the public in general. They don’t even have to say “This is a civil matter”, they could just say “Eh, this doesn’t interest us, good luck with that.”
https://en.wikipedia.org/wiki/Warren_v._District_of_Columbia
> I have absolutely no doubts a court would consider it impossible to transfer goods under consignment to a different entity free of the burden of the consignment contract.
Reminds me of the whole "disney must pay" debacle.
Was that the incident where they stole an artists tiki design?
No, they came up with some legal theory in which they’d bought the assets of some company, including the company’s ownership of some art, but not obligations like paying royalties.
Oh yes, the incident with the star wars extended universe authors royalties. Disney is the worst.
That’s like when I got my shower sealed and then it started leaking within the warranty period. The company claimed that they were the new owners and had purchased the business but not the warranty obligations (!) and I’d have to find the original owner and try to make him honour the warranty. Which was complete BS, obviously, but it wasn’t worth taking to court. :/
There actually are legal ways to do that… instead of buying the company, you start a new company, and just buy assets of the old company (e.g. phone numbers, web sites, trademarks, customer lists). Seems shady but apparently it’s pretty common.
Doesn't always work. I think J&J tried that with talc powder liability.
A letter from a lawyer or small claims court might be worth it though. It’s not going to take that much of your time, or cost very much.
Perhaps:
“Authors Have Formed a Task Force Because Disney Refuses to Pay Them”
https://bookriot.com/disney-must-pay-task-force/
> Authors like Neil Gaiman have formed a task force to fight for the royalties Disney has refused to pay for Star Wars and other tie-in novels.
The problem with consignment is that the consignor wants the maximum price but the consignee wants a quick sale because 10% of a few bucks more means very little and they have to hold the inventory.
Selling on consignment can be an absolutely great deal for shops, under the right conditions.
If I'm a lego trader and I buy your set for $900 hoping to sell it later for $1000, in the meantime that's $900 I can't invest in anything else. And maybe I guessed the set's value wrong and I end up unloading it for $800, taking a loss.
On the other hand, if I agree to sell that same set on consignment? Zero capital outlay, zero risk of me taking a loss - just some shelf space and admin work.
> just some shelf space
Unless the store owns its building and has too little inventory to cover the shelves, the cost of not filling the shelves with the right goods is quite serious. In a low-margin business like retail, "just some shelf space" reads almost like "just some gold bars".
This is definitely not uniform. I worked on inventory management at Target, and stores had quite a lot of shelf space—to the point where we'd hold large amounts of cheap, non-perishable stuff like cat litter because, well, we had the space for it.
Stores also wanted to look full. We actually had parameters in our inventory management logic to increase inventory just for presentation reasons. If inventory is expensive, having some free, quality inventory can be valuable in and of itself even if it moves slowly.
Bricks and Minifigs stores are like 2000 square feet, much different than a Target. Their overhead per square foot is almost certainly far higher than Target.
On the other hand, every BAMF I've ever been in had more open space than any of the other businesses it shared a strip mall with.
I run a niche retail store and there are two sides to this.
Most of our business is selling low-price, entry-level products. There's a 80-20 distribution of people getting into the hobby versus people upgrading after a couple years. Consequently most of our floor space and inventory is devoted to high margin, quick turnover, entry-level products.
In my experience the floor space is less of an issue for high end products than the capital expenditure to bring in the inventory. On the consignment side we only take products aimed at the remaining 20%. These are specialty items we wouldn't have in regular stock. It's a win-win because we don't have to deploy capital to bring the product in-store, but we do have space to showcase some higher end used product.
Also, from the customer side, people ask at the higher end, don't they? Beyond a certain level, it's more of a search and a quest than just browsing. So you mainly have to show that you have connections for certain things. Why does this sound like drugs now?
I know this from a few friends who are deep into tabletop and boardgames, and they would regularly work with the one or two small stores around to get some special, expensive item (to help keep the shop afloat).
If you have no shelf space, of course you can refuse the consignment. And this was a really big one, but the shop was initially very happy with it. Advertised widely with it. Brought in more shelves to display it all. From what I understand, it was a very large part of what was for sale in that shop.
But the shelf space is part of it either way... It's not like consignment stores take everything offered. Most of them are incredibly selective.
My wife owns a retail business where some part of their sales is consignment. Taking anything in with only a 10% consignment fee would be laughable, there’s no way that’s a money making deal when you account for all the overhead of a small retail store. My suspicion is the original store owner made a bad consignment deal to sell the Star Wars stuff with only a 10% commission and the new owner didn’t want to live up to it. Of course, at that point they should have just given it all back, but it turns out they’d rather be evil.
The videos identify the consignment fee as 35%, not 10%.
I head them say 35% at some point later in the videos, but they definitely said 10% first, so I’m not sure which is correct.
> In a low-margin business like retail, "just some shelf space" reads almost like "just some gold bars".
However, in this particular case, the legos were initially displayed as a customer attraction, and then kept in storage. Presumably there's still some inventory cost in storage, but the shelves are clear.
>> The collection will be on display in the store's party room from 10am till 6pm on Saturday, November 11th, and 11am till 6pm on Sunday. The collection will be available for sale immediately, so the best time for pictures will be Saturday morning. The collection will not be stored on-site after hours for security reasons, and after Sunday the sets will be available for purchase but stored elsewhere.
Much better deal for a diamond ring than a giant kayak, then. Gotta pay rent to sit on the shelf!
"Holding inventory" is only problem if the store is full.
It isn't - deprecation of held goods is always a risk and if you're working on consignment then that comes with weird financial liabilities. If there's a flood and you lose your inventory it sucks - if there's a flood and you lose an inventory of consigned values then suddenly you're potentially exposed to paying market value for a number of items in addition to all the site damage you'll need to address. Capacity is one aspect of the costs of holding inventory - but breakage is the much more expensive consideration and consignment just makes it even more expensive.
I believe in this case the consignment contract requires the store to hold insurance on the consigned merchandise, which I assume is intended to address this concern.
None of this is a risk with Lego.
Depreciation: not going to happen on Star Wars sets that are not longer in production.
Water damage: Lego is water proof.
Breakage: being easy to take apart and put back together is Lego’s core principle.
a large part of the value of secondhand stuff is in the box and packaging, assuming those nice boxes in the image were from his collection - those are a little more fragile than the Lego pieces themselves.
Edit: wait, the whole collection was sealed and new in box. Yea, just water damage to those boxes would cut the value by at least 10%. Collectors are picky as shit.
They were sealed in box? Yeah you'd be right that damage would be easy and could significantly reduce the value.
I didn't realize people bought Lego to leave in the box. But I guess I shouldn't be surprised because it's a common thing for collectors to do in other hobbies.
Yup, if I worked in a field where consignment was an option I'd refuse to do it - it's a huge headache. So I'd absolutely believe that the corporation has a policy against accepting consignment offers and might have a case to recover damages or something against the original franchisee. But the way they've handled this situation still appears to be atrocious. Lets say you consigned 200k at a 10% commission, 50k sold under the original franchisee and you were paid 30k already. If the franchise transferred and the company wanted out there should be an exit[1] in the contract to pay the additional 15k and then return the goods to the original owner. I think it's important to remember this sort of an option was always on the table.
1. Even if the original consignment contract was poorly drawn up without a clear exit clause I think it'd be reasonable to expect a resolution somewhere close to this in mediation.
The original contract very specifically allows consignment. It's published.
So you "absolutely believe" something that was already proven false, and which you would know if you had even _skimmed_ the facts.
You clearly didn't read the article. The original franchisee's contract allows consignement.
I have read that article and a few other sources since the first few ways I heard about this story were heavily biased. I have not yet seen B&M confirm that the contract that was leaked is genuine - it is incredibly unlikely that they would, of course, but it still remains one the facts in this case that I tenatively believe but have some reservations around.
I thought it was interesting to, from the assumption that the corporation actually banned consignments, still work through how it doesn't free them from wrong doing. Even in the best light B&M has acted in bad faith.
Your alternative is that the contract was forged. Something easily falsifiable in court and absolutely devastating to any case brought, not to mention any follow-on charges that may result. Is that what you're putting forward?
I thought I was very clear above - my alternative is that even under the best light there were still clearly bad actions carried out by bricks and minifigs. When there is a grey zone I find it helpful to work out what the most charitable interpretation if it is still negative. Even when given the biggest benefit of the doubt Bricks and Minifigs is clearly acting in bad faith here.
In bankrupty a court appointed liquidator can seize assets and sell them to repay creditors. Of course none of this happened here.
They can seize assets that belong to the entity. They can’t seize assets that belong to other people just because it happens to be on their premises, in the same way that they can’t seize and sell the cars that happen to be in a bankrupt store’s parking lot.
There are a lot of reasons why you should never sell things through consignment - but one of those reasons is that the goods cease to be yours in several significant ways. If a company is able to sell a good they could sell that good to fulfill debts - if it is a route to liquidate goods to cover debts then it's in the scope of the liquidator (though I think in most cases a sane liquidator would return the goods whole to avoid creating more debt than already exists and destroying non-fungible goods). If we assume the consignment sale was advantageous for the seller it's unlikely there's a way for the liquidator to quickly sell the goods in bulk for a better margin than the consignment contract offered so any sale they executed would likely add more debt than it cured.
I saw an analysis from a lawyer who said that there are situations where a creditor can claim consignment items, but that it didn't apply here.
Because they didn't file for bankruptcy.
They can't sieze consignment stock though?!?
"Can't" is a really bad word to use and I am not certain if "they" here are the corporation or the liquidator.
If you're talking about the corporation I think that any sensible neutral party would probably come down on the side that the corporation has no entitlement to those goods.
If you're talking about the liquidator then the goods were held by the franchise so if it went through bankruptcy those goods would be under consideration by the steward - I think they'd usually find that the original owner should be entitled to the goods since they're relatively non-fungible. The proceeds from sold goods are likely a more complicated answer since money is fungible and divisible. I could accept that there would be scenarios where a steward would think that the corporation should recover a portion of the proceeds.
> If you're talking about the liquidator then the goods were held by the franchise so if it went through bankruptcy those goods would be under consideration by the steward - I think they'd usually find that the original owner should be entitled to the goods since they're relatively non-fungible.
IANAA, but I'd say the situation is that while the goods are possessed by the franchise, but they are not owned by the franchise. Ownership title doesn't change until they're sold by the franchise to a buyer.
I could see a scenario in which the franchise contract says that BAM can automatically liquidate the franchise (and how else did BAM get immediate control of the store?), and BAM then says they've executed on that consignment contract (at perhaps not reasonable prices). But without a very well-documented paper trail that this is what they did, including actually paying the consignor the (low) proceeds of the sales, it would seem that the only other possibility here is some kind of criminal conversion.
Which points back to all of the discussion about consignment dynamics really being a red herring. The problem is a criminal conspiracy including by the police themselves, for whatever reasons that might be.
The court can do almost anything. Its happened before.
https://www.cozen.com/news-resources/publications/2020/is-yo...
I think if the consignor has not taken the correct steps then there is a risk the receiver would be able to pay other secured creditors using the consignors assets. For example if there are other creditors with liens on the inventory then you are meant to take steps to notify them of your claims on the consigned goods because otherwise the consigned goods could look like inventory to the secured creditor (https://www.lowenstein.com/news-insights/publications/articl...)
bricks and minifigs is going to lose a hell of a lot more than this 10% in business
regardless of the law, it’s a very stupid move on the company’s part.
if they had half a brain they’d pay double the commission and pretend it aas internal miscommunication. $40k is cheap versus the pr hit they’re taking right now