Rosland Capital - Chapter 11 Case Summary

Business Description

Headquartered in Los Angeles, California, with an additional office located in Henderson, Nevada, Rosland Capital LLC (the "Debtor") marketed and sold gold, silver, platinum, and other precious metals to retail consumers throughout the United States.

The Debtor offered the following products:

• Exclusive Specialty Coins: a selection of specialty, premium, proof coins licensed from brands such as Formula 1, PGA TOUR, Davis Cup, Billie Jean King Cup, Fernando Hierro, and the British Museum, with such licensing held through Rosland Hong Kong;
• Exclusive Coins: precious metal proof and reverse proof coins portraying Lady Liberty in gold and silver;
• Numismatic Coins: generally older gold and silver coins, including coin specimens graded by recognized professional entities such as the Professional Coin Grading Service;
• Bullion Coins: a wide range of silver and gold bullion coins, including the Canadian Maple Leaf, South African Krugerrand, American Gold Buffalo, and American Gold and Silver Eagle in proof and non-proof formats; and
• Bullion/Bars: gold, silver, and palladium bars from name-brand mints meeting specific levels of quality and size.

The Debtor also sold precious metals for inclusion in metal-backed individual retirement accounts (IRAs).
In connection with the liquidation of its business, the Debtor retained Armanino Advisory LLC ("Armanino") to provide strategic assessment and financial advice, with Michael Hogan serving as Chief Restructuring Officer.

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Corporate History

The Debtor is a Delaware limited liability company formed on or about June 19, 2008.
Marin Aleksov founded the Debtor and serves as Chief Executive Officer and managing member of the company, now subject to the restrictions set forth in the Written Consent of the Sole Member and Sole Director.
Marin Aleksov owns 100% of the Debtor.

Rosland Hong Kong

• Rosland Hong Kong began operations in 2013 and is headquartered in Hong Kong.
• Marin Aleksov owns 50% of Rosland Hong Kong, and SCAN Invest, Ltd., a Hong Kong investment company, owns the remaining 50%.
• Julian Aleksov, the brother of Marin Aleksov, is the director and CEO of Rosland Hong Kong.

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Operations Overview

From approximately 2013 until May 2026, Rosland Hong Kong served as the vendor that sourced and procured the Debtor's products, in addition to selling products to the Debtor's European affiliates and third parties.
Rosland Hong Kong also held the exclusive global licenses for the brands that issued the Debtor's Exclusive Specialty Coins, and the Debtor purchased its coins and other products from Rosland Hong Kong.

Product Sourcing and Fulfillment

• Rosland Hong Kong maintained contracts with third-party mints, including the Switzerland-based MKS PAMP ("PAMP"), which designed and manufactured gold and silver coins.
• When the Debtor sold a product to a customer and received payment, the Debtor would place an order with PAMP's U.S.-based sister company, Manfra Tordella and Brookes ("MTB"), or with Numismatics Unlimited Inc. ("NUI"), a precious metals dealer based in the United States.
  • MTB or NUI would invoice Rosland Hong Kong for the products, release the products upon receipt of payment from Rosland Hong Kong, and then drop ship the product to the customer, ship the product to the Debtor in the United States, or transfer products held at Delaware Depository Services Company ("DDSC") to the Debtor for transfer to the customer's account at DDSC.

Metal-Backed IRAs

• The Debtor's customers would open self-directed IRAs with transfer agents Equity Trust Company ("Equity") and GoldStar Trust ("GoldStar"), remitting funds to Equity or GoldStar for the purchase of the Debtor's product.
• Equity and GoldStar would forward those funds to the Debtor, which would purchase the products, with those products then deposited in the customer's separate and individualized account at DDSC.

Marketing and Customer Base

The Debtor advertised and marketed its products through Fox News, Newsmax, Google, Bing, AI, the Debtor's website, and other channels, and retained actor William Devane as a spokesman for its products beginning in 2012.
Customers generally learned of the Debtor's products through these channels, contacted the Debtor, communicated with its sales representatives, and then purchased the products through those representatives.
Periodically, the Debtor also directed marketing calls to customers who had previously contacted it.

• Accordingly, the Debtor's business model relied heavily upon direct marketing, customer relationships, and proprietary customer databases developed over many years.
• The Debtor's records identify approximately 35,000 customers and over 65,000 potential customers (people who have responded to advertising but have not purchased products), of which approximately 484 are on the Deferred Revenue List and approximately 133 are on the Buy Back List.

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Prepetition Obligations

Deferred Revenue

• From an accounting perspective, the Debtor only recorded revenue when it shipped the product the customer had ordered.
  Funds received from a customer for a product that had not been shipped were recorded as "Deferred Revenue."
• Due to the growing backlog created by the Debtor's inability to timely deliver products to customers, the Deferred Revenue account continued to grow, reaching approximately $49 million as of the petition date.

Buy Back List

• The Debtor also maintained a policy of buying back precious metals from customers, or from any party who wished to sell their precious metal product to the Debtor.
• As with the Deferred Revenue, the Debtor eventually found itself unable to timely pay the customers who had delivered their product to the Debtor for repurchase, an obligation recorded as a "Buy Back List."
  As of the petition date, the Buy Back List is approximately $11.8 million.

Creditor Matrix

• Approximately 617 customers of the Debtor are also on the creditor matrix, which totals approximately 650 parties.

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Events Leading to Bankruptcy

Declining Profitability

The Debtor historically generated significant annual revenue through the sale of precious metals products, including bullion, numismatic coins, and specialty coins, reporting revenue of approximately $151.2 million in 2021, $109.5 million in 2022, $113.2 million in 2023, $107.1 million in 2024, and $97.8 million in 2025, along with approximately $28.0 million for the period preceding the Petition Date in 2026.
Although revenue remained substantial, the Debtor experienced a significant deterioration in profitability.

• The Debtor's gross profit declined from approximately $27.9 million in 2021 to approximately $18.2 million in 2022, $19.7 million in 2023, $14.5 million in 2024, and $8.5 million in 2025, with gross profit margins declining from approximately 18.4% in 2021 to approximately 8.7% in 2025.
• During the same period, the Debtor continued to incur substantial operating expenses, including significant advertising and marketing costs, valuation gap related to trade order timing, sales commissions, payroll, occupancy costs, and professional fees.
  As gross margins compressed, operating expenses increasingly exceeded gross profit, placing substantial pressure on liquidity.
• The Debtor generated net income of approximately $10.2 million in 2021 but thereafter reported losses of approximately $0.2 million in 2022, $3.7 million in 2023, $6.5 million in 2024, and $13.7 million in 2025, together with an additional net loss of approximately $3.2 million for the period preceding the Petition Date in 2026.
  In total, the Debtor incurred cumulative net losses exceeding $24 million from 2022 through 2025.

These sustained losses, combined with increasing customer obligations and working capital demands, significantly impaired the Debtor's liquidity and contributed to the circumstances that ultimately necessitated these chapter 11 cases.

The Surge in Gold Prices and Order Backlog

Prior to Armanino's engagement, the Debtor began to experience financial distress.
Due to excessive cash outflows and other challenges, the Debtor became unable to satisfy customer demands relating to precious metals purchases that customers contend were paid for but that records indicate were not delivered.
This distress was exacerbated by the increase in the price of gold and other precious metals.

• The price of gold fluctuated between $1,500 and $2,000 per ounce from approximately 2020 through 2023, rose significantly to approximately $2,600 per ounce by the end of 2024, and then experienced a historic surge in 2025, reaching as high as $4,500 per ounce and ending the year at approximately $4,300 per ounce.
  In 2026, the price of gold continued to surge, reaching a peak of approximately $5,600 per ounce.
• As a result of this surge, customer orders of the Debtor's products also surged, and the Debtor was unable to keep up with the increased volume, developing a backlog of orders.
• Due to the backlog, there was often a months-long gap between the date a customer placed and paid for a gold order and the date the Debtor purchased the product from third parties.
  During this interval, the price of gold usually increased dramatically, such that the Debtor ended up paying more for the gold product than the customer had paid for it.
  This situation was not sustainable, and the Debtor lost money rapidly.

Sales Commission Structure

• Another financial impediment was the structure of the commissions the Debtor paid its sales representatives, who were paid a commission ranging from 15% to 35% of the gross profit on the corresponding sale upon receipt of payment from the customer.
• Under this arrangement, the sales commissions were earned upon receipt of funds from the customer even if the customers later cancelled their orders or the Debtor was unable to fulfill the orders.

Customer Claims and Regulatory Investigations

• As the Debtor's liquidity deteriorated, increasing numbers of customers submitted complaints, demands, and threats of litigation.
  As of June 22, the Debtor had its compliance department automatically forward emails and voice messages to proposed counsel, and as of June 27 there were approximately 470 voicemails, emails, or demands made through the compliance department seeking return of funds allegedly paid, delivery of products allegedly paid for, or other claims.
  To date, only one customer has filed a lawsuit against the Debtor, though customers continue to assert claims.
• The office of the New York Attorney General has begun an investigation of the Debtor's product sales to New York customers through 2023; however, the Debtor has not sold products to customers in New York for some time, and the investigation has been relatively inactive.
• The United States Securities and Exchange Commission (SEC) is also investigating the Debtor in connection with its products for metal-backed IRAs and is currently scheduling interviews of the Debtor's personnel.

Wind Down and Chapter 11 Filing

Based upon a review of the Debtor's financial condition, the Debtor lacks sufficient liquidity to satisfy all customer demands and other creditor claims as they become due.
Prior to Mr. Hogan's appointment as CRO, he worked with the Debtor's management, professionals, and advisors to evaluate available alternatives, including (a) continuing operations, (b) pursuing an out-of-court wind down, (c) assigning assets for the benefit of creditors, (d) commencing a chapter 7 liquidation, and (e) pursuing a liquidating chapter 11 case.

• After evaluating each alternative, the CRO concluded that a liquidating chapter 11 proceeding provides the best opportunity to maximize value for creditors, provide transparency for creditors and customers, and administer claims in an orderly and efficient manner.
  By the time of the engagement, the Debtor's management had already concluded that mounting customer claims and liquidity constraints created a situation in which the Debtor could no longer continue operating in the ordinary course.
• Working with counsel, the CRO assisted the Debtor with a wind down of its operations, including:
  • termination of all of the Debtor's employees as of June 19, 2026, except for one employee in the accounting department and one employee in the information technology (IT) department, who have agreed to assist on a consulting basis;
  • collecting the Debtor's financial records; and
  • reviewing, analyzing, and collating the information necessary to prepare the Debtor's chapter 11 bankruptcy petition.
• Based upon the CRO's ongoing investigation, the Debtor's principal remaining asset consists of its past, active, and potential customer lists, customer relationship information, customer data, marketing records, and related intangible assets developed over many years of operation (collectively, the "Customer Information Assets").
  The Debtor no longer possesses any inventory of precious metals, coins, or bullion, and has limited funds in its financial accounts.

Marketing and Sale Process

In the CRO's business judgment, the Customer Information Assets are significantly more likely to realize value through a structured, court-supervised marketing and sale process than through an immediate chapter 7 liquidation. Accordingly, the Debtor intends to promptly file a motion to approve sale procedures for a competitive auction of the Customer Information Assets. Potential purchasers may include participants in the precious metals industry, direct marketing companies, customer acquisition platforms, financial services businesses, lead generation companies, and other strategic purchasers.

The Debtor also intends to promptly file a plan providing for a liquidating trust to manage all remaining assets, including the proceeds of any sale and any litigation recoveries. Once an official committee of unsecured creditors is formed, the committee is expected to have significant input into the structure of the liquidating trust and the sale process. To preserve the value of these assets, the Debtor's First Day Motions seek authority to redact customer names and associated identifying information from publicly filed documents and to have the Debtor's noticing agent (BMC Group, Inc.) serve customer-creditors directly.