Canadian Auction House Ritchies in Ownership Dispute

Kenneth Kidd of the Toronto Star has an interesting article on the current ownership dispute at Rictchies, one of the preeminent auction houses in Canada. According to the article, the dispute is about a past Ritchies president who resigned this July and was attempting to purchase the company, the owner who withdrew $1 million from the auction accounts and a recently ended relationship with Sotheby's.

The Sotheby's agreement ended this summer after Rictchies failed to pay nearly $750,000.00 to consignors. Sotheby's in order to preserve its reputation made the payments. Over the past 7 years, the Ritchies/Sotheby's alliance had sold nearly $100 million of Canadian art. The Ontario liqueur board was also selling wine through an agreement with Ritchies, and has now backed away from the auction house.

From some of the statements in the article, the situation at the moment is very contentious. Past consignors are wondering when they will be paid and new consignors are not sure if the auction house will hold another sale and survive the current turmoil.

The article is very interesting and well worth reading.

Kidd states

For the past year, Ranger had been attempting to buy control of Ritchies from majority owner Ira Hopmeyer, talks that largely foundered because of an increasingly bitter dispute about the nature of at least $1 million that Hopmeyer had withdrawn from the company. Ranger wanted the money put back. In the wake of that dispute, Sotheby's has severed its link with Ritchies, one that had seen them jointly auction about $100 million worth of Canadian art since 2002. When Ritchies couldn't make good on roughly $750,000 owed to consignors from the May art auction, Sotheby's had to step in and pay the consignors, lest its image be tainted.The Liquor Control Board of Ontario, which had been staging wine auctions with Ritchies, went solo as well.By the end of July, Ranger had resigned and the entire staff of more than two dozen people were let go, though Hopmeyer has since hired a handful back, vowing to stage an auction next month.

Kidd continues

The ensuing swirl of rumours has left consignors with merchandise now sitting at Ritchies wondering whether they'll get paid for any goods sold, or whether they should try to retrieve their goods beforehand, even if that means paying a contractual penalty of 20 per cent of the high estimate of the value of those goods, a point Hopmeyer has been enforcing. For many, the woes of Ritchies reflect an industry due for trouble. "I'm surprised it hasn't happened sooner and more often," says Miriam Schiell, a Toronto art dealer and president of the Art Dealers Association of Canada, who counts herself "lucky" that Sotheby's intervened to pay her clients. "This is just a marketplace that's the Wild West." Which raises broader questions. Does a virtually unregulated industry in Ontario need more stringent rules? Should trust accounts be mandatory, rather than have the money of buyers and consignors slosh through the regular accounts of an auction house? And should auctioneers be obliged to pay consignors, as they are in Alberta, within 21 days, rather than letting them wait until the buyer finally coughs up the money?

To read the full Toronto Start article, click HERE.