Corporate Art Collections at Risk

Melanie Tringham of The Financial Times is reporting that corporations are increasingly looking at corporate art collections as potential candidates for liquidation in order to assist cash flow. I have posted about this situation in the past on the AW Blog, (including bankruptcy issues and art at Lehman Brothers) and it keeps coming back with new information and news about corporations looking to sell fine and decorative art collections. The article even touches on the academic world bringing in the current situation at the Rose on the campus of Brandeis University. I am afraid as corporate earnings fall and firms struggle, there will be more corporate collections being reviewed for viability and with the potential of being turned into working capital.

Trigham states How do businesses and other institutions come to possess valuable works of art? For some companies, an art collection starts with the private passion of an individual, such as David Rockefeller at JPMorgan Chase. For others it begins as little more than a means of decorating the office walls. Often a company purchases works as part of its corporate social responsibility commitments, in support of emerging or local artists. If one of them eventually becomes successful, the purchase may well turn out to have been a worthwhile investment.
Trigham continues Heidi Lee, a New York-based art adviser, says: “Companies selling now are not going to get as much as they would have but they don’t have much choice – they may need to get the money as soon as possible. There’s still a lot of activity in the art market – it’s just moved from a seller’s to a buyer’s market.”

Selling an art collection is very different from disposing of more conventional assets. Over-hasty executives with little understanding of the market can easily fail to maximise the value of holdings.

A very good article, but it is also nothing we have not seen or heard of in the past. It does serve to reinforce the point that corporate collections are under scrutiny, and as appraisers may be an avenue for new appraisal and consulting assignment.
To read the FT article click HERE.