Heirs Sue Auction House : Courts: Emanuel Trompeter’s rare gold pieces were to be sold by Superior Stamp and Coin. His daughters say their father’s contract was breached.

Emanuel (Ed) Trompeter died in March, leaving behind the most valuable pieces in his famous gold coin collection.

Before cancer took his life, the 72-year-old Thousand Oaks millionaire--who spent 20 years quietly gathering some of the rarest U.S. coins--provided for about 400 coins to be sold at two auctions. He decided to part with his beloved collection, which in February was estimated to be worth up to $20 million, because his heirs weren’t coin experts and he feared that they would be swindled by an unscrupulous dealer.

But less than five months after Trompeter’s death, a legal battle erupted between his heirs and the auction house hired by Trompeter to sell his coins.

A lawsuit was filed July 30 in Los Angeles Superior Court by Trompeter’s two daughters, Robin Trompeter Gonzalez and Janet Trompeter Polachek--who are also trustees of his estate--against Superior Stamp and Coin in Beverly Hills, and its Superior Galleries division. The first Trompeter collection auction took place in February, the second is set for October.

In the suit, the daughters accuse Superior of breaching its contract with Trompeter and failing to properly account for the proceeds from its auction in February.

Trompeter hired Superior to auction his coins. Superior is 51% owned by Los Angeles Kings owner Bruce McNall, himself an avid collector of coins and sports memorabilia.

The suit also contends that Superior improperly kept $350,000 in extra commissions from the $3.5-million auction in February--held about three weeks before Ed Trompeter’s death.

“It wasn’t Ed’s idea to let his daughters be taken advantage of,” said their attorney, Robert A. Levinson.

Also named as a defendant is Ira Goldberg, Superior’s treasurer and a licensed auctioneer.

The complaint seeks $350,000 in damages, plus other unspecified damages. It asks for the return of the remaining unsold coins to the Trompeter daughters and an injunction that would prevent Superior from proceeding with the second auction, scheduled for Oct. 13.

Trompeter’s daughters want to postpone the auction because they say the coin market is in a slump due to the weak economy. If the auction proceeds as planned, they contend, the coins will sell at prices well below what they would have sold for when Trompeter signed the agreement with Superior in April, 1991.

McNall could not be reached for comment, and Goldberg declined to discuss the lawsuit. But Superior’s attorney, David Pash, said, “We anticipate that the auction is going forward as scheduled.”

Pash contended that the coin market has not changed significantly since the first auction in February, that Superior has not breached any terms of its agreement and that the firm has “not taken anything that wasn’t rightfully due to them.”

Trompeter became wealthy by developing electronic equipment that was later used in the Patriot missile. The company he founded, Trompeter Electronics Inc. in Westlake Village, was sold in 1990 for an undisclosed sum.

His collection of 19th-Century and early 20th-Century U.S. proof coins is considered one of the world’s greatest collections. The gold coins are unusual because none were ever circulated and they are virtually free of blemishes. In some cases, only 10 were minted, usually as presentation pieces for senators and Presidents, or as patterns for coins intended for general circulation.

At the February auction, 201 of Trompeter’s coins were sold for a total of $3.5 million. The second auction was to offer the remaining 185 coins, many of which are considered among the most valuable coins in the collection.

Six “Amazonian” coins, for instance, have not yet been sold and are considered the crown jewels of the collection because they are in pristine condition and form the only set of such coins in existence. Their name refers to the imprint on the coins, which resembles the head of an Amazon princess.

How much Trompeter’s collection is worth is a focal point. In court documents, Robin Trompeter Gonzalez says that at one time Goldberg valued the entire collection at more than $40 million. However, just before the auction in February, Superior told The Times that its estimate for the entire collection was $15 million to $20 million, including an expected $11 million from the second auction.

But the Trompeter heirs now contend that the market for coins has fallen so precipitously that the proceeds from the entire collection might be less than $10 million. A clause in the written agreement between Trompeter and Superior--excerpts of which are contained in court documents--provides that either party may postpone the auction because of an economic downturn.

“They’re trying to rush the sale through simply so they can make their money and move on,” attorney Levinson said.

William Gibbs, news editor at the trade publication Coin World, agreed with the sisters that “there has been a fairly significant drop in prices.” And at coin dealers’ biggest annual convention in mid-August, Gibbs said, many of the most valuable coins did not sell. “The money just isn’t there,” he said.

However, Fred Weinberg, an Encino coin dealer, said that although the market has declined in the past three years, conditions haven’t changed much since the first auction in February. Also, he argued, the Trompeter coins are so rare, their value might not suffer greatly from the weak economy. “The collectors that want to buy them know this is a once in a lifetime opportunity,” he said.

The other major dispute in the lawsuit is the commissions received by Superior from the first auction. That auction took in $3.5 million in gross proceeds from the sale of the coins. The Trompeter heirs received $3.136 million, while Superior kept a 7.5% “seller’s” commission.

But Superior also collected another $350,000 in commissions that the buyers paid in addition to the $3.5 million they paid for the coins. The lawsuit contends that the Trompeter-Superior agreement provided only for the 7.5% seller’s commission, and that the Trompeter heirs are entitled to the extra $350,000 paid by the buyers.

“It was very clearly spelled out in the contract that Superior gets no buyers’ commission,” said Levinson. A copy of the agreement filed with the court states that the 7.5% commission would be Superior’s “sole compensation” for the auction.

Nonetheless, Pash, Superior’s attorney, said that a buyers’ commission is “a standard term of any auction” that is commonly understood between the seller and the auction house. He added that if the Trompeter daughters thought the $350,000 in commissions to be improper, they should request that the money be returned to the buyers. “They’re not asking to give it back to the buyers,” he said. “They want it.”

A hearing on the case is scheduled for Sept. 24.