By David L. Ganz
Exchange of Tampa, Fla., a driving force in the
rare coin market for a generation, filed for
voluntary protection from its creditors under
Chapter 11 of the Federal Bankruptcy Code on
July 24, giving breathing room to the brothers
Mark and Alan Yaffe and giving the firm a chance
There is about $35 million in secured debt and
another $15 million in unsecured debt, according
to filings with the U.S. Bankruptcy Court for
the Middle District of Florida. The case has
been assigned to Judge Michael Williamson.
Sovereign Bank of Providence, R.I., is the
largest creditor with over $35 million listed on
the debtor's schedules.
On Monday, July 27, James Thorner of the St.
Petersburg Times said in a copyrighted article
that Judge Williamson allowed Sovereign Bank to
continue to seize collateral in the form of
valuable coins it held from NGE to help repay
loans made totalling over $35 million.
The Times also reported that NGE was acting on a
tip that NGE co-owner Mark Yaffee had used $12
million to $15 million in coins pledged in
collateral for the $35 million business loan for
impermissible purposes - to build a $25 million
residential mansion in Avila, Fla.
Sovereign called in the loan and attempted to
confiscate the coins, typical of the way that
most secured transactions work when the lender
Unsecured creditors include A-Mark, American
Coin, American Express, Brian Fazio and Bruce
Kutscher, Emporium Hamburg,, Gene Sanders, Kirk
Kelly, Liberty Coin Galleries, Republic National
Business, and several others.
Unsecured creditor sums range from amounts as
low as about $1,800 to $5.5 million.
Mark and Alan Yaffe are owner-directors of NGE.
The company Web site claims to be the world's
largest gold coin and silver wholesalers. The
same Web site lists offices in Zurich, Brussels
and Paris in addition to Tampa headquarters.
Some of the unsecured creditors are European
Bankruptcy laws offer a debtor a period of 180
days protection during which time creditors can
proceed slowly and deliberately, but not in a
suffocating manner, while the debtor puts forth
a plan of reorganization. Creditors may form a
committee and offer a competing vision of the
future of the company.
NGE's saga began July 21 with the filing of a
17-page complaint in Hillsborough County Court
against National, a European subsidiary and the
Yaffe brothers. It claims that the firm borrowed
more than $4 million over the amount permitted
by its credit agreement.
The judge asked both sides to reconvene in court
on Aug. 3. NGE would like access to its coins so
that it can continue to operate its business.
James Thorner of the St. Peterburg Times
contributed to this report.