The Value of Provenance

The Value of Provenance

A lot of people say that our service is just like “Car Fax” for your assets.  That interpretation is pretty much “spot on” with a few valuable features added in.  The following great illustrative real-life story will provide context for the importance of PROVENANCE outside of the art and wine worlds!

Recently, a national facilities company that supports the food service market was contacted by a multi-store restaurant owner to close one of its facilities in North Carolina.  They requested that the entire contents of the restaurant be removed, relocated, and stored temporarily in a warehouse in Georgia.  The plan was to re-purpose all the Furniture, Fixtures and Equipment into their new restaurant location in a suburb of Atlanta. The expense of the move from NC to GA was $17,000 and storage was contracted for $2,000/month.

After 3 months, the facility services company was contacted by a bank in Mississippi that turned out to be the lender to the restaurant ownership and holder of the appropriate UCC filings granting security interest in the aforementioned FF&E still in storage.  The facility services company was notified of the bank’s intent to take possession of its collateral and requested assistance in an orderly disposition of same.

Any form of asset register of the inventory would have been helpful, but none was available.  Obviously, any other asset information needed to affect the maximum recovery for the bank did not exist.  They were left to manage the situation in Atlanta from their bank in MS.  This led to them employing the services of a law firm in Atlanta to do the “work out”. 

The facility services company, short of doing a very expensive, exhaustive, and lengthy physical inventory, complete with appraisal, strongly recommended a “fire sale”.  Every possible buyer inquired about any information that may be available relative to equipment purchase date, warranties, service calls as well as internal and external preventative maintenance.  With no supporting “provenance data” the bids reflected a warranted risk-averse mentality from the buyers.

The entire contents were sold for $15,000!  The same facility services company that did the original move for $17,000 was contracted to move the same FF&E from Atlanta to the buyer in Memphis for an additional $17,000.  Storage fees exceeded $8,000.  All of this resulted in a huge loss that could have been mitigated with business intelligence on the assets, their provenance, and hence, true market value.

In this use-case, Blockchain FOB’s Life-cycle Asset Tracker would provide the bank with complete provenance and disposition of the assets.  That means complete history including ownership, service, maintenance, location, serial/model numbers, and costs.  This provides the bank with the necessary information to properly manage, value, and liquidate the assets for maximum recovery.

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