Sheinfeld Arm’s Length Transfer For $107,100 Is The Definitive Mark To Market Value For Boston As Of December 31, 2016

 

I disagreed with Peter Sheinfeld on ridesharing issues in Boston and Cambridge since I first started driving for Lyft on August 21, 2013. As has been true with my current colleague, Donna Blythe-Shaw, former organizer of USW Boston Taxi Drivers Association, I NEVER questioned Peter’s integrity or his pursuit of economic justice for shift drivers and medallion owner operators.

Peter died tragically on March 28, 2016.

Peter wrote extensively for Carriage News until the impact of Uber on advertising forced publisher Bob Keeley to shut down in March 2015. For 45 years, taxi drivers in Boston had relied on the newspaper to read about all of the goings-on in the local taxi industry.

When in October 2014 Boston Mayor Walsh created the Taxi Advisory Committee to examine policy and regulatory frameworks to support the taxi industry, he wisely split the representation of medallion owners into two parts.

James Endicott represented “Large Medallion Owners”, while Peter represented “Small Medallion Owners”. Endicott 0wns 39 medallions. He is the third largest owner of medallions after Tutunjian’s 374 and the 56 medallions owned by the Ilacqua Family of the Tudor Garage in South Boston.

I define Big Taxi as including Tutunjian and the 15 fleet owners with 10 to 56 medallions each, totaling 312. Big Taxi owns 38% of the total of 1,825 Boston medallions.

The 805 small medallion holders own 62% of the total, averaging 1.4 medallions each. More information on the structure of the Boston taxi industry is available here.

Big Taxi lobbying and public relations strategy includes pretending their interests are the same as small medallion owners to get political support. However the Big Taxi owners, lenders and professional service providers control the industry for their own benefit. Small medallion owners are victims of the Big Taxi cartel.

The flavor of Peter’s contribution is seen in the Small Owners’ Perspective he wrote in January 2012 about the lawsuit filed by the Boston Taxi Owners Association (BTOA).

Let me quote from a wonderful tribute published this spring. The entire article is available here.

“…Sheinfeld was active in the local taxi industry, not just owning and driving a cab for some 45 years, but representing small medallion owners in issues that came before Boston and Cambridge city government – be it the imposition of hybrid cars, pedicab competition or the coming of Uber – as the clerk of the Boston Taxi Owners Association. He also wrote about the issue for the “Right View” column in the Cambridge Chronicle…

Sheinfeld also had a radio show “Rockin’ At Night” on Cambridge’s WRCA-AM 1330…played obscure oldies, doo-wop, novelty, rockabilly, jump blues and obscure rock…

“He was a man of limitless passion about anything from Boston taxi companies to the history of television horror hosts…” said Ryan Douglass, a New York comedian who rented a room from Sheinfeld near Central Square…

[Cambridge]…Mayor E. Denise Simmons also remembered his passion for music fondly, recalling that with his encyclopedic knowledge he could come up with music for any occasion…

…Other [Cambridge] city councillors as well honored him with reminisces at a meeting, with [current Cambridge City Councillor and former Mayor] David Maher calling him “a Cambridge character and a great guy with a great sense of humor” and agreeing with [Cambridge City Councillor] Tim Toomey that he loved his hometown and looked for ways to be involved. “He was taken from us much too fast.”

Tim Toomey has served the public in his dual roles as a Cambridge City Councillor and State Representative for nearly twenty years. As the current chair of the Transportation Committee he is an expert on the impact of Uber on the taxi industry in Greater Boston.

Sale of Only Three Medallions At Arm’s Length Illustrates Free Fall of Q4 2016 Market

There were only three arm’s length transfers of Boston medallions in Q4 2016 valued at $150,000, $115,000 and $107,100.

Sheinfeld’s heirs sold his Boston medallion number 632 on October 26, 2016 for $150,000 to Tomomi Kubinec (as NIPPON TRANS, INC.) at 179 Chelsea Street, East Boston, MA 02128.

Tomomi’s husband, Jozef Kubinec is a long time Boston medallion owner, forming DADDY’S CAB, INC. on July 13, 1994. NIPPON TRANS, INC. was formed on July 30, 2003 by  Tomomi Kubinec.

Tomomi Kubinec also formed JTK TRANS. INC. on September 30, 2016.

Jozef Kubinec and Nippon Trans, Inc. brought suit against Top Cab Dispatch, Inc. and it’s owner John Ford in 2014.

Jozef Kubinec immigrated from the Czech Republic in 1990 and began working as a taxi driver. As NIPPON TRANS, INC. he owns Boston medallion #1535. He has been the only authorized taxi driver for the vehicle associated with taxi medallion number 1535 from 2006 to the present.

It appears the transfer of #632 was a cash sale using proceeds from a loan made to NIPPON TRANS, INC by Eastern Bank on June 17, 2016, describing the collateral as ” all assets of the debtor, now or hereafter acquired.”

There is no reason to doubt that the transfer of #632 was arm’s length. The $150,000 value almost exactly matches the $154,000 value I estimated should be used to mark Boston medallions to market as of September 30, 2016.

Medallion number 495 was transferred to Gohar Adamkhan  (as ADEN CAB INC) on November 2, 2016 for $115,000. I will supply more on that transfer in another post.

Despite the transfer of #632 for $150,000 earlier in Q4, Sheinfeld’s heirs had to sell his Boston medallion number 517 on November 28, 2016 for $107,100.

#517 was purchased by Navjit Singh (as PREET TRANS INCORPORATED of 8 Albany Street, Woburn, MA 01801) as a cash sale.

Gurdip Singh (as NAVJIT CAB, INC. of 33 Sydney Street, Somerville, MA 02145 and 627 Boylston Street #16, Boston, MA 02116) has been a long term owner of Boston medallion number 332. NAVJIT CAB, INC. was formed on July 13, 2006. The most recent lien on #332  was filed by Brookline Bank on May 22, 2014 refinancing a loan from Progressive Credit Union at the height of the medallion bubble when transfers reached $700,000.

As was the case for Kubinec’s purchase of #632, it appears the transfer of #517 was a cash sale for $107,100 using proceeds from a loan to  NAVJIT CAB, INC. also made by Eastern Bank on August 15, 2016, also describing the collateral as ” all assets of the debtor, now or hereafter acquired.”

There is no reason to doubt that the transfer of #517 was arm’s length. The $107,100 value should be used to mark Boston medallions to market as of December 31, 2016.

However, closed transfers lag the market. Look at medallions listed for sale.

As retrieved on December 25, 2016, the DriverZoo website lists the following:

The most recent Listing for SALE is dated October 19, 2016 for $99,999

1 (WAV) Boston licensed taxi medallion for sale asap – looking for best offer. Darek  (617) 817-0451

The two most recent Offers to PURCHASE are both dated September 28, 2016 for

$70,000
I am looking to purchase Boston licensed taxi medallion. I can offer 70000 cash….victor (617) 487-2321 cdaleprani@yahoo.com

$75,000
I m willing to purchase Boston taxi medallion for $75000 Cash….Omi (857) 389-6016

Therefore the market clearing price NOW appears to be somewhere between $75,000 and $99,999.

The proof of the Boston medallion market’s collapse in Q4 is detailed in the Listings for SALE with dates in Q3.

$185,000
September 19, 2016 Regular taxi medallion for sale Mike (617) 633-3888

$180,000
August 4, 2016 Boston Taxi Medallion for sale with an options as following: Lease -to -Buy Private finance available vsimkin100@gmail.com

$170,000
July 27, 2016 Boston HP medallion 4 sale with 2011 Sienna …. or…best offer with financing…….Joe (617) 775-5226

$180,000
July 26, 2016 Boston medallion – clean – for cash only. Alice (201) 965-1566

$155,000
July 10, 2016 Selling Boston taxi medallion $155,000 I dont finance cash only! Unless you have your bank do the loan $155k is the price I need!…Glhs49@hotmail.com

The bottom line

Medallion Financial and other lenders used $360,000 as their mark to market value as of September 30, 2016, despite a trailing arm’s length value of $154,000.

As of December 31, 2016 the mark to market value should be $107,100.

Using wildly inflated values on balance sheets violates ASC 820 and banking regulations.

It is grounds for securities fraud.

Is the jig up?

You decide.

 

 

 

 

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