Global Authentication Files Chapter 11 |
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Tuesday, 06 January 2009 |
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Too many creditors and not enough assets have pushed a sports card and memorabilia authenticator into bankruptcy court--but it doesn't mean they're going out of business.
Global Authentication Holdings filed Chapter 11 bankruptcy papers last month, listing assets of $50,000-$100,000 and liabilities of $1million-$10 million.
The company, parent of Global Authentication Incorporated, a sports card grading and authentication service based in southern California, listed numerous individuals and businesses among its top twenty creditors including the Internal Revenue Service, several sports memorabilia dealers and other public and private entities. A number of Global Authentication Incorporated employees are also listed in the paperwork obtained by Sports Collectors Daily.
Chapter 11 status allows a debtor to reorganize or liquidate pursuant to plans filed with the court. The plan may result in a discharge of debts, which may include all or part of the money owed to its creditors. Among the creditors listed in the court papers were Global employees Steven Rocchi, Mike Baker and Steve Sipe, noted sports card and memorabilia dealers Art Jaffe, Bernie Gernay, Charlie Merkel and Lou Costanzo, Global attorney Mark Galyean, Dell Business Credit, Dell Financial, K Sports and Entertainment and the IRS.
Global continues to operate its grading and authentication business while filing for protection.
Last week, Galvean asked the U.S. Bankruptcy Court's Central California Division for an extension to January 16 in order to complete the required schedules. A meeting of creditors was set for January 28.
In September, Ault Glazer & Co., Inc., parent company of Global Authentication, announced it would become "Global Sports and Entertainment, Inc.", a holding company with six other subsidiaries. Ault Glazer bought 100% of GAI last spring after investing in Global and lending capital to the firm for over two years. In the court papers, GAI is listed as a subsidiary of Ault Glazer Capital Partners.
Chief Executive Officeer Bill Dully, a former Donruss CEO, came aboard in January, shortly after GAI lost its lease on a San Clemente office it was using. The company had been forced into a hasty move and was absent from the sports card show circuit for several months before emerging again last summer. The sudden move and the company's silence on the matter caused some consternation among collectors but GAI kept operating and launched new products last year including image security, online verification services and the grading and authentication of oversized cards. The company also launched a new website.
The bankruptcy case has been assigned to Judge Robert N. Kwan. |
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