WASHINGTON (07/19/2000) - Bid4Assets.com, an online marketplace where government agencies can buy and sell government seized assets, plans to conduct an auction today for the U.S. Marshals Service involving auto loans obtained in the seizure of a Texas auto park.
The Silver Spring, Md.-based company last week became the first Internet-only asset auction site approved by the General Services Administration and conducted the first asset sales for the U.S. Marshals and the Energy Department, said David Marchick, vice president of strategic development.
"We are a centralized marketplace where sellers can efficiently sell and buyers can efficiently buy distressed assets from a variety of sources," Marchick said, adding that government agencies, financial institutions and bankruptcy firms are the main sellers in this arena.
"Distressed assets" are property the government seizes because of criminal activity, bankruptcies and other actions. The government can also sell surplus property on the site. "Buyers don't care were the assets came from, and sellers wanted one place to go to get rid of them," said William O'Leary, vice president of marketing at Bid4Assets.com.
"We created a path in government for this," Marchick said. "Traditional auctions have limited exposure because of time and geography, and the number of eyeballs and potential buyers is extremely limited," but the Internet changes all of that.
Bid4Assets, which launched last November, supports itself financially by making a commission based on the sales price of the assets sold. The company charges between 0.25 percent and 8 percent. The greater the value of the sale, the lower the percentage the company takes, Marchick said. Sellers also set a "reserve price" that bidders are unaware of, but that must be met for a successful transaction to take place.
The assets planned to be posted today are valued at about $250,000 and originated from a drug case in Texas involving the distribution of cocaine, where the defendant used his auto park business to facilitate drug trafficking.
Ultimately, the business was seized and the defendant's assets were forfeited to the U.S. Marshal Service, said Len Briskman, senior management analyst at the Marshalls' asset forfeiture office.
In January, Bid4Assets helped the Marshall Service sell various financial instruments with a face value of $500,000, and the response was very favorable, Briskman said.
"We are happy with the responses we've gotten," Briskman said. "It was very effective for us and we were able to sell some forfeited promissory notes through the venue. We're very pleased with what they've done for us."
Briskman said Bid4Assets has been "very responsive and quick to react" to any questions and problems that the Marshals had, and that the agency will "continue to use" the company's services in the future.
Marchick said 17 federal agencies dispose of seized, surplus and non-strategic assets, and Bid4Assets will continue to market to those agencies, including the departments of Defense and Treasury, and the U.S. Postal Service. He also said the company is pursuing state and local government customers.