Znetix trove on auction block this week
June 9, 2008 · Updated 4:26 PM
If youre in the market for computers, office furniture or artwork, Thursday is your day.
Want to get in better shape? Check in Friday. For cars and boats, block out Saturday.
A three-day shopping spree will offer up goodies for which Znetix founder Kevin L. Lawrence and his companies paid several million dollars. All of it will be sold at court-ordered auctions to raise money that may begin to reimburse thousands of investors for the millions of dollars they sank into Lawrences companies.
This will be one of the larger auctions we have handled, said Terry Moore of the James G. Murphy auction house in Kenmore. We have had other deals like this, where white-collar crime may have been involved, but this is among the biggest.
The auction will take place over three days at four different locations three on Bainbridge Island and one at Murphys Kenmore headquarters.
On Thursday, auctioneers will clean out the former Znetix offices at 175 Parfitt Way, selling some 550 separate pieces of office equipment and 140 works of art the latter of which cost over $1 million, according to the Murphy auction catalog.
The art tends towards the modern, featuring names like Yuroz, Wai Ming and Rumanian teenage sensation Nechita. For the traditionalists, there are five framed Rembrandt prints (on the small side). And for those who want something in three dimensions, theres a slightly damaged blue clam shell from Dale Chihuly.
The 550 pieces of office-related material include an enormous array of computers, printers, chairs, tables and bookcases and two shredders a desktop model, and a power shred machine.
There are a number of boxes of Znetix promotional material golf balls, baseball bats, helmets, clothing and harder-to-figure stuff like crayons, lip balm and soap-bubble solution.
The office furniture is all of really high quality, and much of the artwork is signed, Moore said.
He would not hazard a guess at the possible proceeds, but said he expected very competitive bidding. To help insure a good turnout, the Murphy company will be running shuttle buses from the ferry terminal and from a parking lot on High School Road.
There is very limited parking at the offices, he said, but we will pick people up at the terminal and at the parking lot.
The auction will begin at 10 a.m. Thursday, starting with computers and office furniture. At 1 p.m., the art sale will begin. Once that is done, the auction will return to any remaining office material.
On Friday, the action shifts to the Madison Avenue health facility, where everything not nailed down will be up for sale beginning at 10 a.m., including the material being used by Mike and Alexa Rosenthal in their Island Health and Fitness operation.
According to the Murphy catalog, the auctioneer will first entertain bids on all of the equipment as a package. If the court-appointed Receiver deems that bid sufficient, the equipment will be sold as a lot; otherwise, individual items will be auctioned off.
If anyone other than the Rosenthals buy any equipment, they will have to move it, because the Rosenthals say they have obtained a long-term lease on the Madison Avenue building.
The gym will close Thursday and Friday for the preview and the auction. Mike Rosenthal said last week that he expects to bid at the auction, and if he is successful, will reopen Saturday.
If the Rosenthals are unsuccessful at the auction, they will execute an order for new equipment and reopen when it arrives, he said, estimating that the facility could be closed for as long as three weeks.
At the conclusion of the gym sale, the auctioneer will move north to the GB storage facility at 12715 Miller Road, where more computer and fitness equipment in storage will be sold, along with a number of television sets.
Then on Saturday, the action moves to the other side of Puget Sound, as more than two dozen cars, several boats, a number of trailers and many items of jewelry will be subject to a 10 a.m. auction, including the engagement ring Lawrence bought for his fiancee at a reported cost of $330,000.
New items are being added to the auction daily, most recently a Hummer with only 2,000 miles.
The FBI released that to us just this morning, Moore said Monday. We havent even had time to get a picture into our on-line auction catalog, but we hope to do that later today.
While federal investigators claim that Lawrence bought some 130 cars with Znetix and Health Maintenance Center money, only about two dozen will be auctioned Saturday. The rest are still being located at various places around the country and returned to Washington.
We expect to have another auction later on, when the FBI releases more of the vehicles, he said.
While would-be buyers will have the opportunity to preview the goods for sale, logistics will be tricky. The Parfitt offices will be open Wednesday from 10 a.m. to 4 p.m. for previewing. The gym and the GB storage facility will be open for previewing on Thursday, from 10 a.m. to 4 p.m., during the Parfitt Way auction.
The big-ticket items will be on display Friday at Murphys Kenmore facility from 10 a.m. to 4 p.m., during the auction at the gym and the storage facility.
Bidders will need cash or credit cards to make the required 25 percent deposit at the auction, Moore said, with full payment due Aug. 27. The removal schedule will be announced at each auction site, but removal will be required within a couple of days of the auction.
Credit cards will not be acceptable for the big-ticket sale Saturday. Checks will be taken only if the business or individual presenting them also has a bank letter of guarantee.
Bidders also need to be aware that Murphy is charging a 10 percent buyer premium to cover expenses, meaning buyers will have to add 10 percent to the amounts they bid. Buyers should take that into account when bidding, Moore said.
Federal investigators allege that Lawrence and others sold as much as $100 million in unregistered stock in HMC, Znetix and an entity called Cascade Pointe., and used the money to finance lavish lifestyles for Lawrence, his relatives and associates.
Lawrence, age 37, of Bainbridge Island, remains in federal custody awaiting an October trial on 64 counts of fraud. Three associates have pleaded guilty to fraud charges and await sentencing.