8 ms·

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

by munk-a 5mo ago

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.

throwaway85825 5mo ago
In bankrupty a court appointed liquidator can seize assets and sell them to repay creditors. Of course none of this happened here.
- jimnotgym 5mo ago
  They can't sieze consignment stock though?!?
  - throwaway85825 5mo ago
    The court can do almost anything. Its happened before. https://www.cozen.com/news-resources/publications/2020/is-your-consignment-really-a-consignment https://www.cozen.com/news-resources/publications/2020/is-yo...
  - munk-a 5mo ago
    "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.
    - mindslight 5mo ago
      > 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.
  - benmmurphy 5mo ago
    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/articles/consignment-done-right-perfect-and-notify-for-enforceable-rights-in-bankruptcy-nathan-cargill-schneider https://www.lowenstein.com/news-insights/publications/articl...)
- alasdair_ 5mo ago
  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.
  - mcv 5mo ago
    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.
    - throwaway85825 5mo ago
      Because they didn't file for bankruptcy.
  - munk-a 5mo ago
    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.
BobAliceInATree 5mo ago
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.
- munk-a 5mo ago
  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.
  - philistine 5mo ago
    You clearly didn't read the article. The original franchisee's contract allows consignement.
    - munk-a 5mo ago
      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.
preinheimer 5mo ago
> 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.
- throwaway85825 5mo ago
  Was that the incident where they stole an artists tiki design?
  - preinheimer 5mo ago
    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.
    - throwaway85825 5mo ago
      Oh yes, the incident with the star wars extended universe authors royalties. Disney is the worst.
    - taneq 5mo ago
      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. :/
      - sarchertech 5mo ago
        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.
      - sgerenser 5mo ago
        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.
keithnz 5mo ago
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 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
- toofy 5mo ago
  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.
  - vintermann 5mo ago
    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.
    - Suzuran 5mo ago
      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.
  - fsloth 5mo ago
    "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.
JohnHaugeland 5mo ago
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
superxpro12 5mo ago
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.
- nullfield 5mo ago
  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!
  - quickthrowman 5mo ago
    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 https://en.wikipedia.org/wiki/Warren_v._District_of_Columbia
    - nullfield 4mo ago
      I’m late in responding, but yeah… No particular duty on the part of the police, including in the middle of someone killing you, and all (see the book “Dial 911 and Die”).
  - LorenPechtel 5mo ago
    The police are right. This is a dispute about who is the rightful owner of the Lego. That is a civil matter to be decided by the courts. Doesn't matter how clear the evidence, such disputes are for the courtroom.
    - munk-a 4mo ago
      Absolutely - and there are bad actors here that we should be mad at since they are abusing the law enforcement system but the default goal in situations should always be to de-escalate to prevent violence. I think the cops could have done a better job at explaining next steps and routes to approach a civil resolution but anyone objecting to the police officer removing Ben from the store property after a trespassing complaint doesn't understand how abusive it can be on the receiving end of stalking or harassment. Separating parties in a civil dispute is always a good idea.

by munk-a 5mo ago

throwaway85825 5mo ago

In bankrupty a court appointed liquidator can seize assets and sell them to repay creditors. Of course none of this happened here.

jimnotgym 5mo ago
They can't sieze consignment stock though?!?
- throwaway85825 5mo ago
  The court can do almost anything. Its happened before. https://www.cozen.com/news-resources/publications/2020/is-your-consignment-really-a-consignment https://www.cozen.com/news-resources/publications/2020/is-yo...
- munk-a 5mo ago
  "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.
  - mindslight 5mo ago
    > 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.
- benmmurphy 5mo ago
  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/articles/consignment-done-right-perfect-and-notify-for-enforceable-rights-in-bankruptcy-nathan-cargill-schneider https://www.lowenstein.com/news-insights/publications/articl...)
alasdair_ 5mo ago
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.
- mcv 5mo ago
  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.
  - throwaway85825 5mo ago
    Because they didn't file for bankruptcy.
- munk-a 5mo ago
  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.

BobAliceInATree 5mo ago

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.

munk-a 5mo ago
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.
- philistine 5mo ago
  You clearly didn't read the article. The original franchisee's contract allows consignement.
  - munk-a 5mo ago
    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.

preinheimer 5mo ago

> 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.

throwaway85825 5mo ago
Was that the incident where they stole an artists tiki design?
- preinheimer 5mo ago
  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.
  - throwaway85825 5mo ago
    Oh yes, the incident with the star wars extended universe authors royalties. Disney is the worst.
  - taneq 5mo ago
    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. :/
    - sarchertech 5mo ago
      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.
    - sgerenser 5mo ago
      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.

keithnz 5mo ago

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 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

toofy 5mo ago
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.
- vintermann 5mo ago
  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.
  - Suzuran 5mo ago
    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.
- fsloth 5mo ago
  "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.

JohnHaugeland 5mo ago

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

superxpro12 5mo ago

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.

nullfield 5mo ago
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!
- quickthrowman 5mo ago
  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 https://en.wikipedia.org/wiki/Warren_v._District_of_Columbia
  - nullfield 4mo ago
    I’m late in responding, but yeah… No particular duty on the part of the police, including in the middle of someone killing you, and all (see the book “Dial 911 and Die”).
- LorenPechtel 5mo ago
  The police are right. This is a dispute about who is the rightful owner of the Lego. That is a civil matter to be decided by the courts. Doesn't matter how clear the evidence, such disputes are for the courtroom.
  - munk-a 4mo ago
    Absolutely - and there are bad actors here that we should be mad at since they are abusing the law enforcement system but the default goal in situations should always be to de-escalate to prevent violence. I think the cops could have done a better job at explaining next steps and routes to approach a civil resolution but anyone objecting to the police officer removing Ben from the store property after a trespassing complaint doesn't understand how abusive it can be on the receiving end of stalking or harassment. Separating parties in a civil dispute is always a good idea.