Northwest Territorial Mint

[valerb]

Here is a link to the actual court transcript from December 6th, it's long but an interesting read and how not to piss off the judge who is your guiding light.

The judge seems to get wound up as the hearing goes on and doesn't want to hear a bunch of crap and bullsh!t from these people any more, especially things they are posting on the NWTM web site that are false.

http://about.ag/NWTMint_Transcript1.htm

[valerb]

I thought this Trustee was a crook from the very beginning when they had their first creditors meeting and all they did was stone wall answers and talk about turning the specialty business into something better in a years time and selling it for an even greater profit. He managed to avoid seeing that every ounce of stored metal was given to it's rightful owners based on flimsy excuses so he could keep all the metal he could to help fund his project along with all the cash on hand and metal that was not part of any stored inventory. They sold off businesses, sold equipment and borrowed even more money to keep that magic business afloat. All he had to do up front was sell off all the businesses along with all the material, equipment and valuable customer file that has value and now it looks like the only ones making anything once again is a ton of lawyers and the creditors are taking a much greater beating than expected and possibly a total write off. As you can see even his own October report as to the recovery amounts are drastically different than his November report which seems to be reflecting reality. I suspect the judge in this case has a lot to do with this after reading the above transcript. Kind of makes me believe he made the trustee put out some real numbers for once and they appear to suck big time.

How do you go from not expecting a high percentage of return if the business is sold, to limited if any in a one month period of time? I think the judge should take this out on the Trustee and his merry men and pay more to the people that have already been stolen from once.

It's terrible what dealers are allowed to do and not go to prison, but to then have these vultures come in and strip these companies one after another and get away with it is just adding insult to injury.


... and the bad news

December 22, 2017 3:30PM

In October, Chapter 11 Trustee Mark Calvert said that if the business is sold, creditors "should not expect a high percentage of recovery on their claims" and that if liquidated (either selling at liquidation value, or via auction) there would be "very little return to creditors."

Now, in the November, 2017 financial report, he says that if the business is sold the recovery for general unsecured creditors will be "limited if any" and if liquidated would provide "no expected return to ... the general unsecured creditors."

At this point, it would be advisable to look into the possibility of deducting this as a tax loss if you have not done so yet. Specifically, it could likely be deducted as either a capital loss (like a stock going down to $0), or a theft/casualty loss (which has a high audit potential, but often provides a higher tax benefit). I have a page at http://about.ag/TulvingTax.htm that I wrote regarding tax losses for the Tulving Company situation, which is similar in many ways.

The Tulving Company bankruptcy also came to an abrupt halt a few weeks ago, and one of the creditors pointed out that 2017 is the last year to take a casualty loss. So if you do not take it this year as a theft loss, it may only be possible to take it as a capital loss. As a reminder, theft losses like this are not always straightforward (but always worth taking, as it usually provides at least some type of recovery).

[valerb]

And the bad news just keeps coming or at least what is believed to be the bad news. Northwest Territorial Mint web site is still up and running with a note saying they have shut down for the week but will resume shipments on January 2nd and they are still taking orders online. Now from the grape vine, which is very reliable:



NWT Mint to Close?

December 29, 2017 2:15PM

I have heard a report (which I have not yet been able to confirm) that a letter went out to NWT Mint employees that the company is officially closed today, unless funding or a buyer comes forward.

If true, this would likely mean that the bankruptcy would convert to Chapter 7 (which Chapter 11 Trustee Mark Calvert has said would provide no expected return to creditors).


Nothing, not a penny because I pissed it all away on myself and friends on a foolhardy scheme that only the creditors have to suffer for.

Thank you, Mark Calvert

[valerb]

Here is a copy of the letter sent out to NWTM employees confirming they are shutting down operations, minus a skeleton crew.


NORTHWEST TERRITORIAL MINT

December 28, 2017

To: All NWTM Employees

Re: Separation of Employment

Dear Employee:

We would like to state at the outset that we appreciate your contributions to Northwest Territorial
Mint, LLC ("NWTM"). As we discussed during our Company meeting in Dayton on December
21, 2017, NWTM was unable to remain a going concern unless the potential buyer materialized.

As of today's, date, the potential buyer has not been able to fund the purchase. In the Company
meeting we discussed the inability to fund payroll after December 31, 2017. Thus, effective
December 31, 2017, we were forced to close the Company due to the lack of adequate cash to
remain a going concern.

You will receive all wages owed to you through December 31, 2017 consistent with NWTM's
normal payroll procedures. Additionally, if you have incurred any necessary business expenses
in the performance of your duties prior to your termination date you should promptly submit any
such receipts for reimbursement pursuant to NWTM's expense reimbursement policy. Except as
stated in this letter, or as required by law, all compensation and benefits will cease on your
separation date. If you are being retained as part of the skeleton crew you will be paid in the
ordinary course.

You and any dependents who are covered under the Company's group health plans will be
covered under the health, dental, and vision insurance policies through December 31, 2017,
except as otherwise provided in the plans' governing documents. You will receive a separate
letter regarding health plan continuation under the federal law known as "COBRA" (the
Consolidated Omnibus Budget Reconciliation Act). You may exercise any rights you may have
to elect to continue coverage at your expense under the group health plan for yourself and any
dependents who were covered under the plan as of your separation date.

The Company or any applicable insurance providers will provide separate information regarding
individual coverage rights and, if applicable, any continued coverage under all [group term life
insurance, long-term disability, short-term disability, accidental death and dismemberment
insurance, and other welfare benefits.

Unemployment insurance benefits may also be available to you through the Nevada
Department of Employment, Training and Rehabilitation, Employment Security Division.
Additional information can be found online at http://ui.nv.govicss.html.

Please direct any employment verification and reference inquiries to the Company's Controller,
Annette Trunkett. The Company will respond by providing only your dates of employment, last
position held with the Company, final salary, and reason for separation which was the closing of
the company. Additional information will be provided only with advance written consent from
you.

You are also reminded that you have certain statutory and contractual obligations to NWTM to
refrain from disclosing confidential and trade secret information belonging to NWTM. These
obligations derive from NWTM's workplace policies and procedures, applicable state and
federal law, and, if applicable, a restrictive covenant agreement that some employees executed.
It is important that you return all property and confidential information belonging to NWTM on
your last day of work, or make arrangements to return all such property as soon as possible.
This includes all Company documents, records, files, computer-recorded information, equipment
and other tangible property, credit cards, entry cards, keys, and identification, that you may
possess. Otherwise, NWTM may take further action to recoup any replacement costs and/or
seek the return of Company property through appropriate legal recourse. Your manager must
approve anything other than your personal belongings taken from NWTM's premises.

If you have moved and have not yet updated your address with HR please ensure that you
provide Annette Trumpet with your forwarding address.

We wish you the best in your future endeavors and appreciate your continued cooperation
during this transition. If you have questions, please contact Paul Wagner.

Sincerely,

Mark Calvert
Trustee

[valerb]

From "Very Bullish" to "Closed" in 87 Days

December 30, 2017 9:30AM from about.AG

On October 3, 2017, Chapter 11 Trustee Mark Calvert filed a document titled "TRUSTEE’S REPORT OF INVESTIGATION AND STATUS REPORT."

Calvert himself wrote "The Trustee and his professionals have devoted every effort to ... recovering as much as possible for the benefit of creditors." He also wrote "The enterprise value ... is approximately $14 million" and "This increase in sales activity provides room for optimism regarding the prospects of the business." and "The Trustee anticipates that the sale of the Company as a going concern or reorganization ... will eventually provide the resources for payment of distributions to creditors." He ends with "The Trustee remains optimistic that the company will grow and will achieve its full potential and if so, will provide a deserved recovery for creditors."

More importantly, Calvert also included CEO Bill Atalla's views of the progress and potential of the company. Atalla forecast that by the end of 2018, NWT Mint would have a value of $20M, and a $60M valuation in 5 years. Atalla wrote "We are on the rise with sales moving in the right direction" and "The outlook for this company is realistically bright" and "I face only a handful of hurdles at this time" and "I am very bullish about Medallic Art."

Less than 4 weeks after his "Very bullish" comment, Mr. Atalla started cozying up to a company that would soon present an offer to buy NWT Mint. Two months later, that company would fail to produce the $10M or so, even after making a brief attempt to raise funds through a short-lived GoFundMe campaign.

And now NWT Mint is closed, less than 3 months after incredible optimism. I now hold Judge Alston in higher regard, as he was the one who wrote that he was "deeply unhappy" with the report.

[valerb]

It appears that another buyer may have been found or it's one of the bottom feeders looking for a deal and found it. There has been a couple things passed around and the CEO only mentions this sale to be of benefit to the employees, since he never mentions any creditors. An interesting issue with the new potential owners, they plan on adding the word Mint after Medallic Art.


Latest Update on Sale of Company

January 4, 2018 11:40AM

CEO Bill Atalla wrote to me this morning, and said (quoted with permission):

"We met yesterday with our new and qualified buyer. We successfully concluded a purchase agreement. We identified the critical payment milestones which are near term. As those dates are met, I will share with confidence and transparency the details of this transaction. We are talking days not weeks. This could be the partner and funding the great employees of the Mint truly deserve."

[valerb]

Only rumors from inside the company, but they have been right more often than not.


Little News

January 17, 2018 8:40PM

I haven't heard anything official regarding NWT Mint since my last updates.

Unofficially, I have heard that the second potential buyer did not come up with money either.

I have also heard that employees that were laid off have not been paid for their final days of employment. Employees were apparently told that they would get paid for their vacation time, but then later told they would not. Apparently human resources at NWT Mint referred people to Cascade Capital (Chapter 11 Trustee Mark Calvert's company) for answers regarding payment and unemployment. Employees have apparently been instructed to file unemployment claims going back to December 26, several days before the employees were informed that they would be laid off.

If NWT Mint were not already in bankruptcy, they are definitely at a point where I would warn people about financial problems, and not to do business with them. That is quite shocking in a bankruptcy, especially where the Trustee filed very bullish comments just a few months earlier.

[valerb]

Since the operation has been shut down, employees terminated a month ago and sales of the corporation fallen through the cracks, the fighting over the remaining crumbs has taken on new meaning.

The activity below is taking place while the Trustee and his partners in whatever you want to call it wish to be paid for their "services" which seem to be rather extensive and there doesn't seem to be enough to go around and yes they are not including anyone else in this fight. Thank you Mark Calvert for turning in what would have been many millions to be divided between the creditors into next to nothing if anything at all.

Meanwhile Ross Hansen is setting on the sidelines with some investors hoping to buyback his remains for penny's on the Dollar.


Diane's Request Denied

February 1, 2018 4:10PM

On December 8, I reported that Diane Erdmann (long-time girlfriend of NWTM owner Ross Hansen) filed a motion to receive items that had been seized from her home shortly after the bankruptcy filing.
The Judge has denied her request.



Class Action Filed re: WARN Act

February 1, 2018 1:05PM

A class action lawsuit (adversary proceeding) was filed against NWTM yesterday by an employee, on behalf of all NWTM employees.
The lawsuit alleges that NWTM violated the WARN Act in firing employees at the end of December.

Violation of WARN Act?

January 29, 2018 4:15PM

[I need to add my note as I occasionally do: I have no formal legal training, so everything I write is intended as information only, not legal advice. If you were (or are) an NWTM employee, feel free to use this information, but please do not rely on it to make any legal decisions!]

The WARN Act requires employers with over 100 employees to give employees 60 days notice of plant closings and mass layoffs in most cases.

In August, 2016 Chapter 11 Trustee Mark Calvert's company Cascade Capital performed a liquidation analysis (see Doc 1229 p34) of a conversion to Chapter 7 that specifically set aside $1,011,377 in administrative Chapter 7 claims for "WARN Act" (of which 77% would be paid from money available after liquidating the company). It stated "The 'WARN' Act would apply in this case requiring the Trustee to pay two months in additional salary to all employees at the Dayton facility." So clearly Mr. Calvert is aware of the WARN Act. Heck, he should be: he billed over $4,000 for legal research on the WARN Act! Presumably the 2016 liquidation analysis was on the assumption that a non-liquidation buyer was sought.

So what changed that did not require 60 days notice? According to NOLO, the law covers employers with over 100 employees. There were 114 full time employees at the end of November, 2017 according to the November Financial Report. WARN covers a plant closing or mass layoff, which this should be if it would have been in the 2016 analysis.

Exceptions to WARN include No Notice (temporary employees or strikes, neither of which apply here) or Shorter Notice (natural disasters, faltering company, or unforeseeable business circumstances). The business circumstances were definitely foreseeable (e.g. the September, 2017 financial report and the October, 2017 financial report both stated "If the tight cash flow issues cannot be resolved, the Trustee will need to close the business"). That leaves a faltering company (which applies to plant closings, not mass layoffs): NOLO says "If a company is struggling financially, it can give less notice." But to use that, the company has to be "actively seeking business or money ... that it reasonably believed, in good faith, that giving 60 days’ notice would have precluded it from obtaining the necessary business or money." But why would that not have applied in 2016, but apply now? Would warning employees of a potential layoff have prevented the GoFundMe campaign from collecting the $500,000 deposit?

There is also an rare exception (see 54 FR 16042) that allows liquidating bankruptcy fiduciaries to be exempt from WARN, but that doesn't seem to apply here (it only applies to those liquidating a company, not operating a company, which the Trustee was trying to do).

[valerb]

CAT FIGHT

I haven't been adding the ton of updates which haven't amounted to anything but a lot of fighting and fewer and fewer dollars being offered for the crumbs. I believe the NWTM parts has been sold or what's left of it that wasn't sold off for operating cash over the past year and some of their equipment for a meager amount and they have been trying to sell the Medallic Art portion that is the only thing functional or was until they shut the doors. The Trustee has been trying to sell it to a company called Medalcraft, he has even gone so far as to refuse to accept a higher offer from someone else and submitted the request to the bankruptcy judge for his approval to sell what's left to Medalcraft and the Judge said, no can do Charlie. Not sure what all he's using for his determination, but the order simply states his ruling on the court findings from earlier in March when they were talking about the value of the dies and who owned them and who had rights to these things and how can some of these people be protected with the dies they had purchased so they will not be used by some new company. Theory is those dies are worth a small fortune if for no other reason than for the scarp metal value and the Trustee simply was ignoring all the dies over in China as if they didn't exist and there were reports of somewhere in the neighborhood of tens of thousands of dies over there that belong to someone!!! To say the Judge has not been happy with this trustee would be an understatement, but will he do anything about it, only time will tell.

[valerb]

Alright all you poor sailors out there, it might be time to go deep sea diving for all that lost Silver you bought from NWTM before 2013

New Request to Destroy Records

March 23, 2018 7:30AM

Yesterday afternoon, Chapter 11 Trustee Mark Calvert filed a motion to abandon or destroy company records prior to around 2012. Last May, he had requested to destroy or give away records dating before 2009, but that motion was apparently denied.

It is unclear what he would do with the records if they were abandoned, rather than destroyed. In a bankruptcy, property that is abandoned goes back to the debtor. Would they go back to Ross Hansen?

And of course, there is what appears to be a glaring error. The motion starts by "requesting authority to abandon and destroy business records of NWTM from before 2012",
but the proposed order states "The Trustee is authorized to destroy all business records of NWTM that pre-date the year 2013." Remember, 2012 is a whole year, so you have to phrase things properly.
You cannot say both "get rid of records before 2012" and "keep records after 2012". The poor records from 2012 get lost if you do that.

This is also interesting because Calvert declares that he is "unaware of any litigation or other bankruptcy estate matters for which such records could become relevant." However, documents from 2009 were 2012 were pulled from NWTM's records for a hearing just 1 week ago.