Hannes Tulving Rare Coin Investments of Newport Beach, once one of the nation's largest gold and silver coin dealers, has filed a Chapter 7 liquidation petition in federal bankruptcy court here.
Company owner Hannes Tulving Jr. also filed a personal bankruptcy liquidation petition.
The coin dealership, which had sales of $30 million in 1989, faces millions of dollars in claims from disgruntled customers as well as a multimillion-dollar lawsuit alleging fraud filed by the Federal Trade Commission. The FTC placed the firm in receivership last August.
In its Chapter 7 bankruptcy petition, the dealership listed a minimum of $3 million in liabilities but only $100,000 in assets. In Chapter 7, a firm's assets are sold and distributed to creditors after legal and administrative fees are paid.
If Tulving's asset estimates are accurate, it is unlikely that investors or creditors will recover much.
The FTC suit alone seeks at least $40 million in compensation for investors that the commission claims were charged up to five times the actual worth of the coins they bought from from the Tulving firm.
In addition, more than 10 investors and investment firms have filed civil suits against the coin dealership, all seeking recovery of their investments.
Charles Dick, a San Diego attorney representing just one of the investment firms suing Tulving, said his client--Dunham & Assn., formerly Dunham & Greer Coin Growth Fund--is seeking well over $1 million.
Karen Andrews, the attorney handling Tulving's personal and corporate bankruptcy filings, said the $3-million liability figure in the petitions is "a good faith estimate" by Tulving and that once the company's books are examined, a formal list of creditors and the amounts claimed by each will be filed. She said she does not expect the estimate of liabilities to increase significantly.
Tulving could not be reached for comment.
With the bankruptcy filing, all claims against Tulving and his company are automatically suspended. Unless the bankruptcy court rejects a liquidation petition, it normally assumes jurisdiction over all suits and claims, even those filed by the government.
Tulving's firm had been one of the nation's most prominent and respected rare coin dealers for more than a decade when it rocked investors and others in the industry with the announcement Aug. 1 that it was under investigation by the FTC and the California Department of Corporations.
The investigations involved allegations that the company overpriced coins it sold and reneged on guarantees to repurchase them.
A day after revealing the investigations, Tulving said in an interview that he had sold most of the firm's assets in order to keep the business open. Among the items sold, he said, were coins, several luxury cars, a corporate jet and Tulving's Newport Beach residence.
He said his personal net worth had shrunk from almost $3 million to "probably zero."