A fleet of Evgeny "Gene" Freidman's foreclosed taxi medallions sold on Monday in a closed-door auction taking place in a Queens, New York hotel.
All of 46 medallions -- the metal plates on yellow taxi hoods letting them legally pick up street-hails -- have been won by a group identified in bankruptcy court documents as MGPE Inc. for a total of more info $8.56 million, or $186,000 each medallion, according to Crain's New York. Business Insider managed to confirm those numbers with an industry source as well.
The individual bidders behind MGPE Inc. are not identified in court filings but are a part of a hedge fund and therefore are anticipated to lease the medallions out to fleet operators, according to Crain's and verified with a business supply.
The nyc taxi medallion industry is new territory for hedge funds, who might be visiting the current drop in medallion prices as a buying opportunity. Taxi medallions peaked in value at 2013 at greater than $1 million but are currently often auctioned off for less than half that amount.
Matthew Daus functioned as part of the Taxi & Limousine Commission for more than eight years and currently works for the law firm Windels Marx that has cab industry customers. He says hedge funds are a rare sight in the taxi industry.
"We tried to get them involved, but they would not touch medallions using a 10-foot pole back then."
In the week leading up to the auction, MGPE Inc. put in an opening "stalking-horse" bid for about $7.7 million, or $167,500 each medallion. On the afternoon of the auction, one set bid up the price tag, entering a bid of $175,000 per medallion for all 46 medallions until MGPE Inc. countered using all the winning $186,000 per medallion bid.
There were also bidders ready to go higher than $186,000, but just for individual medallions. The auctioneer chose to go with MGPE Inc.'s bulk offer, according to Crain's and confirmed by an industry resource.
The $186,000 medallion price is not expected to become the new standard for prospective medallion auctions, according to Daus.
"These medallions were foreclosed upon as a portion of Freidman's insolvency," says Daus. "These bulk deal bids aren't indicative of a medallion's true market value."