A Southern California-based company responsible for submitting maps for filing on behalf of clients has filed for bankruptcy.
In its Chapter 7 filing this week, Marx Cards, owned by Michael Minjares, listed assets of $89,981 and liabilities of more than $1.36 million.
The list of creditors includes hundreds of people across the country who submitted cards to Marx for filing with PSA and are still waiting to get them back. Hundreds of thousands of dollars in loans were also listed in the filing.
Marx, who had been approved by PSA as a group outlet, said he took in more than $954,000 in 2020, made $4.4 million in revenue in 2021, but due to his debts, he ran out of money in August.
Group submissions allow multiple collectors to submit cards through a third-party intermediary who manages the process of organizing the documents, delivering the cards to grading companies, and returning them to customers, usually at a lower cost . Some also offer screening services and other benefits.
In his statement of financial affairs through his attorney, Marx said it was “essentially an Instagram contact business” in which users contacted Marx through that platform to submit cards in their name. As a group bidder, Marx would take a small profit in exchange for his services, promising faster turnaround times and lower costs. However, the company says the suspension of lower-cost services from PSA last year led to a disruption in its revenue. After ramping up his activities in 2020, including opening a storefront, Marx says he “was so indebted that all income was absorbed by daily and weekly payments to merchant banks that provided loans to the ‘business”.
When some of the orders Marx had submitted to PSA were fulfilled and the money was due, Minares said his company said it didn’t have the funds available to pay. A store owner in Ohio who submitted cards through Marx on behalf of customers says he flew to Southern California and paid for them himself so he could return the cards to those clients, even though he had already paid Marx for the same work. .
In the bankruptcy papers, Marx blamed the closure of most PSA service levels in 2021 on much of his problems, but also cited another company’s non-payment of some $60,000 that caused him were owed and two accountants she hired. In her filing, Marx said the accountant paid herself about $50,000 more than the $48,000 annual salary she was supposed to receive. The company’s two accountants left their jobs in November last year. It also says a customer failed to pay a $60,000 debt to the card filing company.
PSA pledged to complete the process of grading the thousands of cards that collectors had sent to Marx free of charge, but said the situation was complex due to the volume of cards that had been submitted through Marx. PSA has yet to match some of the thousands of cards still in its authentication and grading process to Marx customers who submitted them.
“It’s going to take time to sort everything out,” PSA chairman Kevin Lenane admitted on Wednesday. He said PSA would make changes to its group submission requirements, including collecting an initial 50% deposit instead of charging customers the full amount when their cards have completed the grading process.