(Kitco News) - Silver collectable coins struck with the image of cartoon character SpongeBob SquarePants will be destroyed by this weekend, in accordance to an original licensing deal between PFGBest and Nickelodeon, the owner of the SpongeBob character, said the former director of business development at PFGBest Precious Metals.
Peter Thomas, who was director of business development at PFGBest Precious Metals and was one of the people instrumental in creating the SpongeBob SquarePants coin, said the firm’s unsold coins were considered assets after PFGBest went bankrupt following fraud committed by Russell Wassendorf Sr., the firm’s owner. The coins were released late last week by the bankruptcy trustee, Thomas said in an interview with Kitco News. His current firm, Zaner Group, won the bid on the coins.
Thomas said PFGBest and Nickelodeon had a 13-month licensing contract that allowed use PFGBest to use the SpongeBob image. According to a November 2011 press release from PFGBest, the coins were a legal tender one-ounce silver bullion coin, and the coins were square, like the cartoon character. The set contained four silver coins, in a wooden box, with a certificate of authenticity by the New Zealand Mint, which struck the coins. There were plans to create more coins featuring others characters from the cartoon series.
The coin sets retailed for $279 and were available starting in December 2011, according to the PFGBest press release. Thomas said although about 1,600 sets were created, only about 100 sets were sold because PFGBest closed in July 2012 and the rest of the coins were seized as part of bankruptcy proceedings. The New Zealand Mint said in July 2012 that they were paid in full for the coins.
As the unsold coins were held by the bankruptcy trustee, the licensing deal ran out, which meant the coins could not be resold without violating the copyright, Thomas said. The money Zaner paid the bankruptcy trustee for the coins will be returned to PFGBest customers, he added. Zaner sold the metal to the refiner. In total 6,096 coins will be destroyed.
People who bought the coin sets prior to the bankruptcy are unaffected.
Meanwhile, Thomas said, the unsold coins are at a smelter, ready to be melted down and the silver recast for another use. The coins will be destroyed this weekend sometime, he said.
“There hasn’t been a square legal tender coin in … hundreds of years. They were really beautiful coins,” Thomas said.
Nickelodeon said in an emailed statement that it does not comment on the terms of any deals.