Mark Yaffe, the owner of National Gold Exchange (NGE) has perhaps one of the most important collection of musical automatons known to exist. In his 30,000 square foot sprawling estate, he houses his beloved shrine of over 100 self-playing antique musical instruments. To call them music boxes, would be like calling the Windsor Castle a house. Some of these museum quality pieces are purported to be worth more than one million dollars each, and they could soon be on the auction block.
In his mansion, you'll find recesses with mechanical animals playing instruments, human likenesses which move their eyes, mouths and perform other automated tasks set to song. This cacophony of carnival like animation is so surreal, that at times, he reported, it actually scared his children.
Unfortunately for Mr. Yaffe, he now finds it necessary to liquidate part of his collection to satisfy business creditors. His company NGE, has fallen into bankruptcy and some of the most important pieces in this stunning collection will have to be sold to satisfy financial obligations. The NGE is a rare coin business that by 2008, had hit $288 million dollars in yearly sales.
Yaffe grew up in Boston and his tale is reminiscent of Horatio Alger's. He began his career as a savvy teenager selling coins at a flea market. He soon began wholesaling rare coins to other dealers, and thus an empire was born. He left college to pursue the business which he built with his brother Alan. The business they built, quickly became a major contender in the gold coins market, they bought wholesale, then sold retail, big time.
Like many businesses these days, somehow the company leveraged itself into a situation with creditors that's forced Mr Yaffe to file for bankruptcy protection.
Sovereign Bank, a main creditor of NGE, got a judge's permission to show up at National Gold Exchange to take control of the business. National Gold responded by filing for Chapter 11 bankruptcy protection. Mr. Yaffe has issued a plan to repay his creditors 100 percent via the sale of his mansion and some of his most expensive musical automatons which he's been gathering since 1981.
Watching in the background, serious collectors such as Jasper Sanfilippo Sr., chairman emeritus of Chicago-based Fisher Nuts are likely waiting with eager anticipation to bid on such rarities as Yaffe's Hupfeld Helios orchestrion, (estimated at $3,000,000) or his Phonoliszt-Violina ($750,000).
Another party interested in the auction of these items may be Paul Milhous of Boca Raton, a multimillionaire newspaper circulars business, who is a serious collector in the genre.
Art "B" Bronson, former president of the Musical Box Society International had this to say: "There may be a dozen or fewer collectors of Yaffe's stature, with the resources and desire to own dozens or hundreds of pieces.
The recession has taken its toll and hurt music box values, especially the smaller, more common pieces." Bronson said he would be surprised if Yaffe's Hupfeld Helios orchestrion fetches $3 million or if his Phonoliszt-Violina fetches $750,000.
There may not be a lot of candidates qualified to be in the bidding pool for these items, but the ones that are, will be sure to attend the auction(s), or have brokers do so on their behalf. So far as I'm aware, an auction house has not been chosen to sell the collection, but it would seem that such a niche interest collection, would be best offered through an aggregated effort.
Aggregating the auction effort could attract would-be, new collectors, thus increasing the bidding pool. Recently, the high end collectibles market has seen many investors itching to diversify some of their risky stock holdings over tangible assets. If the auctions are marketed in a way that will attract some of those folks, all the better.
While this story may fuel a lot of drama and speculation in the rare coins market as to the future of NGE, my gut tells me that the company will weather the storm just fine. Mark Yaffe has the heart and tenacity of a "picker", which is what has built his fortune and apparently he'll be relying on those attributes to get him out of this jam. I think that's a smart move.
I'll be posting auction news on this collection as it becomes available, so stay tuned or subscribe to this RSS feed.
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