Gold dealer Yaffe will see empire liquidated by court

Mark Yaffe, a Tampa businessman who became one of America's leading gold coin dealers, will see much of his gold empire dismantled after a bankruptcy judge's decision today.

In U.S. Bankruptcy Court, Judge Michael Williamson on Wednesday converted National Gold Exchange's Chapter 11 bankruptcy case to Chapter 7 bankruptcy. The judge's action spells the end for the gold and rare coin company because Chapter 7 bankruptcy leads to a company's liquidation.

National Gold's chief creditor, Sovereign Bank, already had seized most of the company's assets months ago, but was prevented from selling them off when National Gold filed for bankruptcy protection last summer.

Those assets include millions of dollars in gold and rare coins and Yaffe's collection of antique music boxes, which are similar to player pianos.

Now, with the judge's order, the bank is authorized to liquidate the items. Richard McIntyre, National Gold's bankruptcy attorney, expects the music boxes could sell for at least $7 million, while the coins should sell for more than $5 million.

Meantime, Yaffe is trying to sell off his opulent mansion in Tampa's Avila community to pay off his creditors. The 29,000-square-foot residence is stocked with the music boxes.

Yaffe's troubles started over the summer when an attorney sent a letter to Sovereign Bank claiming Yaffe was improperly using some of National Gold's assets to pay for his mansion.

Acting on the tip, Sovereign Bank quickly began an investigation and found several problems at National Gold, including missing coins and faulty accounting.

Despite his company's liquidation, Yaffe expects to continue in the gold coin business, McIntyre said.

He has recently received loans from his father and others allowing him to launch a new, if much smaller, coin operation called Phoenix Gold, McIntyre said.