I'm not a
lawyer so if any attorneys out there like Claude Litton or Sean can
correct me, please do. My understanding of what happens after a Chapter
7 liquidation (which means your home, car and
everything else) vs. a Chapter 11 restructuring, (which was what Ken
originally sought to avoid paying Mr. Mannheim) - is if the liquidation of
Ken's posters results in proceeds greater than his debts and legal fees, any
surplus would be doled out at the discretion of the trustee. There is,
however, a contempt of court /
bankruptcy fraud issue hanging over him because of undeclared assets.
This could mean jail time and/or huge punitive fines on top of paying off
his creditors (plural). And with the news media involved - his case has now
become HIGH-PROFILE, which hurts his chances for leniency. At the
very least, he could live off that surplus and start over - but he'd be
transformed into a "cash-only" guy with an adverse bankruptcy judgment
following him around - making it near impossible for him to get a
conventional loan for at least 10 years. That's not good if you have emergency
expenses come up for yourself or your child like medical bills in excess of
health insurance - without a home equity line of credit to tap. He'd have
enough to live on and support his child day-by-day, but he'd have to live
carefully. But his collection would be gone unless he were insane and tried to
convince his pals of his trustworthiness to bid on his behalf (which could
further expose him to fraud because in a Chapter 7, you're liquidated, e.g.,
you're not supposed to have any assets to buy anything, especially
discretionary items). All this trouble for a piece of decorative paper.
Ridiculous. -d.
Date: Mon, 25 Jun 2012 16:11:16 -0400
From: fdav...@verizon.net
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
Again,
I'm missing something here. After his collection is sold in a bankrupcy
proceeding to pay his debts and whatever damages there are from this lawsuit,
shouldn't he be able to come out of bankrupcy? I thought his collection
was worth millions of dollars? FRANC
Date: Mon, 25 Jun 2012 13:02:29 -0700
From: jhnwald...@yahoo.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
I wonder why Ken didn't
just sell some posters and give the investor he owes the $500,000
too back his money. Now the guy is screwed. He's not going to have 2
cents to rub together.
JW
Date: Mon, 25 Jun 2012 12:44:29 -0700
From: davidmkusum...@hotmail.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
Thanks, Adrian. That's good to know. In fact, I privately replied or talked
to several people during the past few days about this - and the consensus is in
line with what you wrote, especially when one considers a long history of
un-related "escapades" involving Ken dating back many years. On one hand
there's temptation among his pals to feel sympathy for his plight, but on the
other - Ken's history of strange dealings, culminating with this latest
incident, trumps feeling too sorry for him. One person observed that in his
opinion, this scandal was equal or greater in notoriety in terms of $$$ - than
the Haggard case, even though the latter involved more victims. Regardless, I
know many people will never forget this - and will be reminded of it again when
his collection is liquidated with much fanfare/marketing/publicity possibly
later this year. And then after that's over, he'll forever remain on the
dubious list of titanic embarrassments to this hobby. - d.
Date: Mon, 25 Jun 2012 06:37:07 -0400
From: jboh...@aol.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
Dave
you make a comment about staying silent.
Well I will say something. At Cinenvent this year the subject of
Metropolis and Ken Schacter came up many times...we who discussed it
came up with canclusions and opinions, none are favourable. The fact is
that lust for a piece of paper has put Ken's family life in a very poor
situation and a lesson to be learned from Mario Puzo's Godfather - don't
piss off someone who is more powerful than yourself...Ken has pissed
off a big wig and Ken really doesn't have a leg to stand on. And the
stories that have gone before about Ken and his less than salubrious
dealings have now made him persona non grata.
There surely is a film to be had out of this...LUST FOR A POSTER.
Date: Sun, 24 Jun 2012 14:08:37 -0700
From: davidmkusum...@hotmail.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
Thanks,
Jeff. As I've told others who wrote me privately today, in the future, I'll
only let the group know if any news stories
surface which reveal new/previously unpublished info. I think the NY Times,
WSJ, LA Times, the
Daily Mail, the Guardian, etc., will NOT publish anything unless they can find
a
"new angle" beyond what was published by the Hollywood Reporter. BTW,
"Metropolis poster auctioned" or "Metropolis poster seized" are better phases
to enter into search
engines - to get a lot of results and commentary from bloggers about this
story... -d.
Date: Sun, 24 Jun 2012 11:07:54 -0700
From: jpotok...@ca.rr.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
Great set of posts on this subject, Dave.
Thanks for your insight and offerings.
Jeff
Date: Sat, 23 Jun 2012 22:29:29 -0700
From: davidmkusum...@hotmail.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
* According to my sources, several business news editors in L.A., London and
New York - are in the midst of deciding whether they too, will go forward with
their own versions of this story. If you do a Google search with the words,
"Metropolis poster" - you'll already get back several pages of results, most of
them copy-and-paste jobs of what Andy Lewis wrote yesterday for the Hollywood
Reporter. I expect the search results will get larger after this weekend - and
then become humongous IF other mainstream news organizations get involved,
including TV. But the Hollywood Reporter was the first to publish what the
hobby has been talking about for months. News interviews were conducted last
week with the key players, which included investor Robert Mannheim himself, who
is central in that he appeared to have no recourse when he couldn't get his
money back. This publicity actually helps him.
* In my view, there's tremendous irony that while Sean alerted the press
several months ago to drive traffic to his website - that this action led to
the poster being seized - and helped Mannheim and the bankruptcy trustee -
bolster their case against Schacter, a former MoviePosterExchange founder who
kept Peter and Sean in the dark about Mannheim's claims. This very publicity
was oddly responsible for doing some "good" for an investor who was fleeced.
(There is no legal dispute that money was loaned to Schacter.)
* I know some of you are personal friends of Schacter and most, except the
always vocal/fearless Rich Halegua, will stay silent. While it was already
unfortunate what happened to Schacter's life before "Metropolis" became an
issue, e.g., the personal tragedy he experienced, becoming a single father,
etc. - his decision to declare bankruptcy to avoid paying Robert - backfired
the MOMENT "Metropolis" was used to help launch the MoviePosterExchange.com
site. Why it didn't happen sooner is obvious to me. The bankruptcy
proceedings continued uneventfully - UNTIL "Metropolis" surfaced "for sale" on
Sean and Peter's site. Schacter had a blind spot about the risk to his prized
collection, even as he began Chapter 11 proceedings in December 2012. The news
publicity in early March 2012 was short-term glorious for the site - but within
10 days after those stories appeared - "Metropolis" and Schacter's fortunes
were doomed.
* Now with the press in "full alert" mode, the story is uncontrollable. It
will stay that way until AFTER the poster - and the rest of what remains of
Schacter's collection - is sold for no reserve. There have been several
high-profile stories I've watched unfold in the mainstream press about our
hobby during the past 15 years. This joins the list as being the biggest and
will be among the most unforgettable. But given the names involved - it's also
the darkest and saddest. Whenever you hear the cliché, "there are no winners
in this fight," it's mostly true when the fight involves molesters, murderers
and Madoffs. In all other disputes, there's always winner and a loser in the
eyes of the public. Victims of all stripes - deserve to "win" something - even
if it's a so-called "Pyrrhic victory." -d.
Date: Sat, 23 Jun 2012 18:20:45 -0700
From: sa...@comic-art.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
my answer to this is, and with a nod to David Koos.....
Kenny, you may be my friend and I don't want you to be insulted...... but
man-o-man was this stupid
At 06:13 PM 6/23/2012, Franc wrote:
Someone
explain to me what I'm missing in this story so far. Why would Ken file
for bankcruptcy, if he owned a repayment of a $500K loan, when it is
well-known that his collection is worth probably close to $5 million
dollars? Why would he risk his collection so that he could attempt to
default on this loan? Did he not presu,e hat his assets would be
seized? FRANC
Date: Sat, 23 Jun 2012 15:56:40 -0700
From: davidmkusum...@hotmail.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
I think
"Metropolis" will be sold by Heritage with NO RESERVE and will generate a
lot of advance publicity in the months ahead. Why? Because the
bankruptcy trustee will demand whatever the market will bear. If
Heritage, for argument's sake, wanted to post a reserve or offer a
"guarantee" - or even buy the poster outright for, let's say, $500,000
for a future sale - I think the trustee would say no. The trustee is
the "consignor" in this case, bound by law. Why would the trustee
accept $500,000 - or ANY price - when there's a potential upside to get
more than that? One never knows. Remember, I could be wrong, but I
seem to recall this poster was once listed on Kenny's and Peter's old
defunct Majestic Posters site for around $2 million, a "fishing price" just
thrown out
there for the right millionaire with money to spend.
It's not a
happy situation for Kenny, but when was the last time a high ticket,
nearly one-of-a-kind poster like this - was offered on the open market
with NO RESERVE? Under normal circumstances, Heritage would insist on a
reserve or want to buy it outright as an investment for whatever
price the market would bear, whatever Texas laws would allow. But that
would be a little odd because there's no doubt Heritage would want to
capture the most dollars NOW - in relation to its planned big-budget
marketing of this poster. This is big-time news for the hobby. -d.
Date: Sun, 24 Jun 2012 08:14:31 +1000
From: johnr...@moviemem.com
Subject: Re: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
........he estimates its value at just $250,000, a
number most observers view as comically low. High-end estimates put the
value of the poster at more than $1 million, which would make it the first
poster to cross that barrier in a public sale. Conversely, a sale at
Schacter's low estimate of $250,000 or even any number below $690,000 would
represent a softening of the poster market at a time when other collectibles
such as movie props and rare comics are selling for record
amounts.
If this poster is to be sold as part of a "liquidation
sale" presumably with no reserve, the "comically low" estimate of $250,000.00
might be not far off the mark.
Regards
John
Date: Sat, 23 Jun 2012 14:58:06 -0700
From: davidmkusum...@hotmail.com
Subject: "Metropolis" Poster's Troubles Featured in the Hollywood Reporter
To: MoPo-L@LISTSERV.AMERICAN.EDU
I'm not surprised that the "splash" publicity surrounding the infamous
"Metropolis" 3-sheet - and its brief offering for sale for $850,000 before it
was suddenly pulled from Sean and Peter's MoviePosterExchange site - could lead
to to more stories, albeit nearly four months later. There are many
interesting things in the article below that - while NOT NEW to hobbyists - are
still "new news" to the rest of the world. I find it intriguing that The
Hollywood Reporter boldly takes credit - asserting media publicity about the
poster - and the publication of its own story in March 2012 - led to its
seizure by federal authorities. The update below cuts through the tedium of
going through reams of court documents posted elsewhere. I now wonder if
editors at other news organizations - might "piggy-back" or "copy-cat" the
Hollywood Reporter - with updated stories of their own. -d.
World's
Most Expensive Movie Poster Seized in Bankruptcy Case
One of four surviving "Metropolis"
posters along with valuable "King Kong" and "Invisible Man"
posters will be sold as part of a liquidation auction.
12:01
PM PDT 6/22/2012 by Andy Lewis
A rare and coveted Metropolis movie poster -- one of only four known
surviving
copies from the 1927 silent classic -- has been seized as part of a Chapter 7
liquidation bankruptcy case involving its owner Kenneth Schacter, a well-known
collector. The poster will
be auctioned off soon.
The case is being overseen by the
U.S. Bankruptcy Court in Los Angeles, with John Menchaca serving as the
bankruptcy trustee.
The historical importance of the Fritz Lang-helmed movie and
the rarity and beautiful art deco design of the Metropolis poster combine to
make it “the crown jewel of the
poster world," according to Sean
Linkenback, a well-known poster dealer. (See the full poster
below.)
The poster had been offered for
sale in March for $850,000 by Movieposterexchange.com.
Estimates vary as to what it would fetch on the open
market.
Schacter paid a still-record $690,000 for it in 2005.
In the bankruptcy filing, he estimates its value at just
$250,000, a number most observers view as comically low.
High-end estimates put the value of the poster at more
than $1 million, which would make it the first poster to cross that barrier in
a public sale.
Conversely, a sale at Schacter's low estimate of
$250,000 or even any number below $690,000 would represent a softening of the
poster market at a time when other collectibles such as movie props and rare
comics are selling for record amounts.
Other key items in Schacter's
collection include a King Kong
poster from 1933, which is considered by experts to be nearly as valuable as
the Metropolis poster, and a
1933 one-sheet teaser from The
Invisible Man.
The total collection could be worth as much as $5
million, according to court filings, but the exact value is uncertain because
Schacter has ignored court orders to provide a full and complete inventory.
It was THR's reporting about the poster being offered for sale that
pushed Schacter from a Chapter 11 reorganization bankruptcy to a Chapter 7
liquidation bankruptcy.
Schacter had filed for bankruptcy protection on Dec.
12 to avoid a judgment over a roughly $500,000 loan from Robert Mannheim, an
investor
who provided money for Schacter to invest in posters to sell for a profit.
When Mannheim learned about the
possible Metropolis sale via
Movie Poster Exchange, it reinforced his belief that Schacter was trying to
conceal assets to avoid repayment.
(The owners of Movie Poster Exchange were unaware of
the bankruptcy case when Schacter consigned the poster to them for sale and
immediately withdrew it from the site when they learned of the dispute.)
Mannheim filed a motion to force a
conversion to a Chapter 7, which the court granted March 12, concluding that
Schacter had indeed abused the Chapter 11 process by failing to disclose his
full inventory or complete financial assets.
Schacter was required to
immediately turn over his entire collection to a court-appointed bankruptcy
trustee, which he failed to do.
On May 16, the court found Schacter in contempt,
ordering him to submit a list of his holdings by May 31 or face a $2,000-a-week
contempt fine.
Schacter submitted an inventory of
his collection, but the bankruptcy trustee still is trying to assess whether it
represents his full and total holdings at the time he filed for bankruptcy (to
account for any sales he may have surreptitiously made after filing).
The trustee is in possession of the Metropolis, King Kong and Invisible
Man posters but only has
a list of many of the other items.
Once the inventory investigation is
complete and creditors have submitted timely claims, the bankruptcy trustee
intends to hold a liquidation auction.
If the court approves the request, the trustee is
likely to use Heritage Auctions, one of the largest auctioneers of movie
posters,
to conduct the liquidation sale.
Given the size of the Schacter's
collection, Heritage might auction it in waves, but no final decision has been
made.
The liquidation is expected to begin before the end of
2012, but the exact date is dependent on the speed of the inventory assessment
and the court's ruling on the application to conduct the sale.
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