Appraiser Workshops

The last news we had of this sad saga is the Harts were each recently sentenced to 14 years in prison as they plead guilty to misapplication of fiduciary property of more than $200,000, a first-degree felony (click HERE to read previous post. Brian Rogers of the Houston Chronicle is now reporting that a new judge is allowing a trial, after the guilty plea and previous sentencing of 14 years. The Harts thought they were going to get probation, not prison, and certainly not 14 years each. Texas State District Court Judge Vann Culp refused to explain the decision.

Rogers reports After their guilty plea, the couple agreed to leave punishment up to then newly-elected state District Judge Randy Roll following a pre-sentence investigation. The investigation included 160 letters from prominent Houstonians asking Roll to consider giving the couple probation. He sentenced them to 14 years in prison.

“They thought they were going to get probation, and when they got prison time, they fired their lawyers and started blaming everyone,” prosecutor Markay Stroud said in court. “Now, they want what my children would call ‘a do over.’ ”

Stroud, who negotiated the original plea agreement and will have to start the case over, seemed stunned after state District Judge Vann Culp’s ruling.

“Given the evidence I heard, I’m very surprised by the decision,” the prosecutor said.

She declined to comment further, saying it now was a pending case. She previously had said the couple stole more than $4 million.

The Harts’ attorneys claimed victory after the ruling and said they were preparing for the new trials.

To read the full articl, click HERE.

I have mentioned over the past few months the new webzine/blog project I was working on. The site is a "non-denominational" site, designed for all appraisers, with news and appraisal related content unfiltered by any group or association. I am very excited about this project as it has been extremely well received by fellow appraisers. I expect it to be a destination site for personal property appraisal news and content.

The Personal Property Appraisers Post will soon launch, but I wanted AW Blog readers, many who are going to be Appraisers Post contributors the opportunity to visit the site and view some of the appraisers who have volunteered to participate in this project. I hope to eventually get between 30-50 appraisers and related industry professionals involved in the site. Each committing to post at least once every 4-6 weeks. With the proper balance between posts and contributors, the site should always have new and fresh content. The contributors all have direct access to the site for posting, reinforcing the Independence of the site.

The site currently has about 20 contributors listed, enough to soon officially launch the webzine, with still more to be added over the next few days. I will post to the AW Blog when the site officially launches. Some bugs in the template have just been worked out, (Internet Explorer users could not view the side bar) and a few more posts need to be posted.

There are currently two post on the site, one from Stephen Sweeting, ASA who wrote about the art market in Canada, and a new post from David Maloney, AOA CM who just posted on the appraisal debate of Inspection vs Non-Inspection. Both are excellent articles for the appraiser, and what I hope to be representative of the content that will be regularly posted on the Appraisers Post. The Appraisers Post currently has a CPA/attorney and an attorney/appraiser as contributors and will soon be adding other specialties such as fine art and decortive art conservators.

Please take a few minutes and visit the site. More content will be posted shortly with interesting topics such as appraisal professionalism, furniture designers of the 20th century and building and maintaining an appraisal library. The site will also contain information on upcoming conferences and appraisal related education and events.

Visit the site at www.appraiserspost.blogspot.com

If you are interested in being a contributor, and like to write, click HERE to email me. Remember, the time committment is minimal, only one post every 4-6 weeks of about 300-800 words.

About 10 days ago I posted on the AW Blog that the Grosvenor Art and Antiques Fair was closing, with a bit of a push from the hotel in order to better utilize the Grand Ball room in the hotel (more $$$), but also because of declining interest in antiques. I also mentioned there were rumors the show would resurface in a different venue. Dave Itzkoff of the NY Times Art Beat is reporting the replacement fair is to be called Masterpiece.

Itzkoff reports The new event, to be called Masterpiece 2010, is scheduled to take place from June 25 to June 30, and its organizers are presently reaching out to art and luxury goods dealers to secure their participation. Simon Phillips, the chairman of the antiques dealer Ronald Phillips, which was formerly an exhibitor at the Grosvenor House fair, told Bloomberg that locations including the Royal Hospital Gardens in Chelsea were being considered for the Masterpiece 2010 event, but cautioned that permissions had not yet been secured. “There is a real need for this event if London wants to be capital of the art world,” Mr. Phillips said, according to Bloomberg. Last month, organizers of the 75-year-old Grosvenor House fair said it was being discontinued, citing declining profits and increasing costs.

Several months back I was posting a lot on the deaccessioning debate here within the States. This included the Rose Art Museum at Brandies, the Fiske University, the Corcoran, the National Academy, Iowa State, the Metropolitan Opera along with a few others. I then grew a bit tired of the debate over what and how museum funds from deaccessioning could be used for, such as only replacing items of art or for overhead and conservation. Although the discussion is worthwhile and guidelines and more flexibility is needed. Whats the point if the institution is forced to close. But there are also other issues such as the donors intent.

The London Telegraph is reporting the UK is no going through some similar issues as well. The public Southampton Art Gallery is looking through its collection of 3,500 works of art to determine what might be sold in order to support a museum on the Titanic.

The Telegraph report states There are two clearly demarcated sides to the argument. Opponents insist that museums and public galleries don’t exist solely to display: they are also centres of scholarly research and repositories charged with the preservation and safe-keeping of anything that is of aesthetic or historical value. What to one generation looks like junk can emerge as treasure to another. Extensive selling-off will also discourage donors, who like to feel that they are giving sub specie aeternitatis.

On the other hand, most galleries and museums are over-stocked with artifacts of no discernible value. Storing and conserving such stuff securely at controlled temperatures costs a fortune. Libraries regularly purge themselves of books, why shouldn’t museums and galleries do the same? A car boot sale will not only clear debts, it can also provide funds for new acquisitions.

In the US, the practice of “deaccessioning” is more prevalent and even major institutions buy and sell robustly. But the government is beginning to think that it’s gone far enough.

To read the rest of the article, click HERE.

Sotheby's and Christie's both appeared to be very pleased with the sales results of this weeks Old Master Paintings, including the collection of a Johnson and Johnson heiress. The Sotheby's Evening sale and the collection from Barbara Johnson totaled nearly $60 million including buyers premium. The evening sale brought $42.76 million in sales, with 48 of 33 lots selling. The buy through rate was 68%. Fourteen of the lots sold for over $1 millions and 5 new auction records were set. The Johnson collection brought a total of $15.9 million with 44 of 56 lots selling. The buy through rate was a strong 78%, with three lots selling for over $1 million. Of the lots sold in the Johnson collection, 57% sold for prices above the pre sale catalog high estimate.

The Art Newspaper noted the interesting news that this is the first time in several years where Old Master paintings have outperformed the Contemporary and Modern sales. I still am reluctant to say the Old Masters are thriving, but with the numerous records set it was clearly a very good sale. The sales of the recent Contemporary and Modern auctions were considered by many to not be of the highest quality, with some works that were recently seen on sale. In any event, the Old Master category may not be thriving, but it is certainly showing signs of strength when compared to other categories.

Sotheby's stated Alexander Bell, Co-Chairman of Old Master Paintings, Sotheby’s Worldwide, commented after the sale: Johnson, a selection in which most of the major schools in the field of Old Master paintings were well-represented and the “Tonight’s results demonstrate yet again the consistent underlying strength of the Old Master Paintings market. We were pleased to offer in addition to the impressive group of paintings, sculpture and works of art from the collection of Barbara Piaseckapre-sale exhibition had a real buzz and air of excitement. This area has a long-established and stable collecting base, which was very much in evidence tonight and collectors responded with particular enthusiasm to the unique spiritual aesthetic of the Johnson collection. Ribera’s Prometheus – the top-selling lot of the Johnson collection – was greatly admired and we’re thrilled to have set a new auction record for the artist.”

The Christie's Old Master sale saw 63 lots come under the hammer with 48 selling to a sell through rate of a strong 76%. The 48 selling lots totaled $32.84 million including buyers premium. The sale had 9 paintings selling for over $1 million dollars, with the top lot of selling to a US private collector for $3.5 million. Three auction world records were also attained during the Christies sale.

The Savannah Morning News recently ran a short but interesting article about online art auctions. The site initially refers to online art auctions, but I believe the article actual is referring to all online art sales, not only those that auction. The report states actual sales have been in decline since the economy started having difficulties and has paralleled the issue brick and mortar auction houses have had. The article also mentions that most sales are in the lower value ranges and the online art services are starting to cater more to that group. This makes sense as buying from an image can be deceiving even if unintentional. I know selling furniture online can be hard, and when the image is taken with lighting it can look completely different.

The article states, Online sites selling art are facing a similar situation to auction houses: Sales are down. These sites vary in the quality of art they sell. Some of them are standalone and some are operated by galleries as an additional way to reach buyers. Some owners say they are losing money, while others said their businesses haven't grown as much as they had hoped since the economic downturn. They are all looking at alternative ways to keep their businesses going in this declining market.

Palo Alto, Calif.-based McCormack-Skiba said people are buying the cheaper art on the site. No one is buying the more expensive works on the site that run from $5,000 to $10,000.

So, to readjust their strategy they are offering more art at lower prices. They are increasing the number of prints of each artist they represent on their Web site.

To read the full article, click HERE.

The Appraisal Foundation has just sent out the July edition of its electronic newsletter. Much of the news we already know about or has been released in earlier press releases, such as USPAP 2010 being approved and board vacancies, but it is all consolidated in the Foundation News.

The newsletter contains information on:

• 2010-2011 Edition of USPAP Adopted

• Release of Online National USPAP Courses Anticipated

• The Appraisal Foundation Seeks Candidates for Vacancies on the AQB and ASB

• The Appraisal Foundation Seeks At-Large Candidates for the Education Council of Appraisal Foundation Sponsors (ECAFS)

• The Appraisal Foundation Seeks Consumer Interest Candidate on Board of Trustees

• Board of Trustees Spring Meeting Summary

• New Brochure: Why Engage a Professional Appraiser?

• USPAP Q&A

• Upcoming Meetings

To read the Foundation News click HERE.

Fellow appraiser and art dealer Peter Kostoulakos just sent me this interesting article from Slate.com by Sam Kean. Kean looks at art which incorporates plastics and how museums are discovering that it deteriorates. Not only does it deteriorate, but over time as it deteriorates it can also destroy other objects which come into contact with it, even items in the same display case. As appraisers, we should be aware of the potential effects, the types of plastic which are most prone to have issues, how to identify issues and how the expected deterioration may impact future values.

Peter makes an interesting point as conservator of paintings for over 20 years. He has been using mineral spirit acrylic coatings, he now is wondering if over many years theses coatings of acrylic may be harmful to cultural property.

The Slate article by Kean states The casualty list is appalling: Antique plastic dolls at the National Museum of Denmark have begun to peel and flake; classic furniture at the Victoria & Albert Museum in London might as well have been left out in the sun for years; the first-ever plastic toothbrush, at the Smithsonian, is collapsing into a pile of crumbs; etc. A whole generation of irreplaceable items that are as representative of our culture as pottery or flintheads were of ancient ones are dying—and many people charged with their care have no idea how to stop further damage.

Kean continues Worst of all, when plastics weep and bleed they can corrupt everything around them. Chemicals evaporate from their surface and acidify any moisture inside a display case. This causes mini bouts of acid rain that in turn eat away at the plastic in nearby objects—as well as any cloth, metal, or paper in those objects. Curators can lay down special carbon cloths beneath a plastic object to absorb some acid, but some plastics have to be quarantined immediately. Museums have also used plastics to coat nonplastic objects like silver (to prevent tarnishing) and paintings (to prevent flaking). But plastic coatings often "bloom" and turn opaque or "crizzle" (i.e., wrinkle) like dried rubber cement, changes that can damage the very object the coating was meant to preserve.

To read the Slate article, click HERE. If you too have an interesting article you would like to share with AW Blog readers, please forward them on to me. I cant cover the art and appraisal news and the additional articles should appeal to more appraisers and make the blog better.

John Dizard of the Financial Times has an interesting article on Christie's auction house. Christies is a private company, so public financial reporting is not required, but every once in a while we get a glimpse of what is happening and how the house manages its affairs. Dizard states the smaller item sales of decorative arts such as furniture, silver and lower quality partings greatly enhance the bottom line of the auction house. It has been revealed that estate business is a big part of Christie's profitability and these typically under $20,000.oo lots bring close to one third of the auction houses profits. The article is very interesting as it notes how Christies works with and cultivates relationships with the estate divisions of large law firms in order to gain new and fresh consignments.

We as appraisers do that as well in order to gain estate business, including appraisals and consultations. If the attorneys took more advantage of appraisers they would certainly maximize the value of the estate, and the costs of the appraisal or consultation would be more than offset by the higher value by proper market segmentation and placement. The smaller sales, although not as exciting, appear to bring stability and consistency to the bottom line of the auction house, especially in these difficult times and uncertain markets.

Dizard states The old Christie’s mythology of gentlemen pretending to be auctioneers is, really, the inverse of the truth: the firm has a more hard-scrabble business model than its competition. Christie’s chases two to two- and-a-half times as many items, or lots, to get gross revenues that are within a few percentage points of Sotheby’s. It lacks the integral secured lending business that is a key part of Sotheby’s. It is less generous with compensation than Sotheby’s, which can mean lost opportunities with the departure of key staff, and, also, a lower break-even at a given level of staffing.

Dizard continues Marc Porter, the president of Christie’s Americas, came up through the estates department. He says: “We have been getting the lion’s share of the estate business for close to a decade. We usually have over 55 per cent [of the estate business]. We think it is the most desirable business, is reasonably estimated, the works are fresh to the market, and the market knows they are for sale.” In other words, they will be priced to move, which means commissions are more certain.

Getting estate business means years of cultivating the trust and estate departments of the major law firms.

Christie’s competitors suggest that its people get their share of that business by...horrors...discounting. Probably true. On the other hand, if you are going to concentrate on one market segment, in slow times you can at least count on people dying and their estates being liquidated. In contrast, when prices for art decline, living collectors will be reluctant to sell if they have enough cash to keep going.

To read the full article, and I hihgly recommend you do, click HERE.

Scott Reyburn of Bloomberg has a very good preview of the upcoming Old Masters sales at Christie's and Sotheby's as well as satellite sales at local galleries. The auction houses will be offering an estimated $136 million worth of paintings this week. I will post results as they become available. One consignor, a Johnson and Johnson heiress has 200 pieces of art in the sales. Many old master dealers and collectors believe the sales will be strong with more interest than what was recently generated at the London Contemporary, post war and modern sales.

Reyburn states The event combines selling exhibitions at 23 galleries with Sotheby’s and Christie’s International’s July sales of Old Master paintings. The auction houses will be offering more than 680 lots with a minimum estimate of 58.5 million pounds. The dealer shows, which run from July 4 to July 10, will offer works with a collective value of “at least 25 million pounds,” Sue Bond, public relations director of Master Paintings, said in a telephone interview.] Johnson, 72, is hoping for a commercial bounce-back, having put up for sale nearly 200 Renaissance-period pieces at Sotheby’s on July 8 and 9.

Reburn continues “We want to open our doors and get rid of the fusty image of Old Master galleries,” Van Haeften, one of the co-founders of Master Paintings Week, said in an interview. “People don’t realize that it’s sometimes cheaper to buy from dealers than from the salerooms. At an auction the price can only go up. In a gallery it can only come down.”

To read the full Bloomberg article, click HERE.