Where did you hear that?? I don’t think that is 100% true.

NAFA is a tough spot now but I honestly believe they are trying their darnedst toget this resolved.

As to where the money is and why banks are involved, see my post on another thread about prompt date and buyers accounts not paid in full, etc.

If you know all of the facts and understand how the fur auctions operate, you would understand what caused the current situation.

[/quote]Here is one of the things that got NAFA in trouble. At every sale there is a prompt date. This is the date that all accounts SHOULD be settled by.

On prompt date (or just before), NAFA pays every shipper that had fur sell at that sale. Shippers are PAID IN FULL.

According to Conditions of Sale for all buyers, if they are unable to pay their account in full by prompt date, they must make a 35% deposit to hold their purchases. Then they have a certain amount of time to make the rest of the payment. They pay interest on the balance they owe.

Many buyers do not pay for their purchases in full be prompt date. They basically finance their purchases through NAFA. This is standard procedure at all fur auction companies.

So let’s look at some numbers - hypothetical numbers for simplicity sake. Keep in mind these are SAMPLE numbers.

NAFA sells 30 million dollars worth of fur at a sale. Assuming there is a 10% sellers commission and no other fees. That means that NAFA owes the shippers 27 million dollars.

Some of the buyers pay their bill in full - say they pay 10 million in full. The other 20 million of sales is financed with a 35% deposit. That works out to 13 million dollars worth of goods that were bought but not fully paid for by the buyers.

But NAFA still has to pay out that 13 million on prompt date. Despite what manymof you think, NAFA doesn’t have that kind of cash sitting around.

This is where the banks come in. NAFA had a long standing agreement with a major bank to cover this extra 13 million that NAFA has to pay out. This arrangement has/had been in place for a number of years. For what ever reason and without notice, after the bank had paid out whatever money NAFA had in their account, the bank said “ Thats It” and they stopped covering/honoring NAFA checks and thatnis why shippers checks bounced.

NAFA is working tirelessly with other banks to come up with a new arrangement. They are not taking this situation lightly.

No one at NAFA stole your money. They didn’t spend it on fancy cars or luxury vacations. They had the rug pulled out from under them by their bank.

A lot of you still won’t understand the entire situation but it is as I’ve explained above.

NOTE - I am not a NAFA employee. I am a long time customer that is as concerned about this as all of you.
[quote]

I have not heard that NAFA is actually in bankruptcy. They are still trying to work this out.

To say that NAFA is done. That NAFA is bankrupt. Is only adding fuel to the fire.

I for one am willing to give them more time to work this out. And yes, i do “have skin in the game.”.

I wonder if the details of how NAFA operates is similar to FHA's rules and procedures

Have you ever read a NAFA report that wasn't total BS? It's not called NAFAese for nothing. "Increased clearance at new levels"= we dumped your fur for nothing, but we still get the drumming fee. And we'll make you an offer you can't refuse- the NAFA magazine.

Interesting how it went from a simple misunderstanding during a bank switch, to now they are looking for financing. This doesn't look promising.

Wonder how many dealers are going to be in a bind over this.