Bankrupt Law Firm Art Collection to be Sold at Bonhams

Nate Raymond of the New York Law Journal posting on Law.com writes about the corporate art collection of bankrupt law firm Heller Ehram soon to be auctioned by Bohnams and Butterfields. Bohnams appraised the collection to be worth between $610,000 and $771,000 at auction, but they have expectations of the sale reaching over $1 million. Bohnhams plans on auction the art in both NY and in San Francisco.

The article gives some very good insight into art collections and corporate bankruptcy, including value, prices paid, expectations and timing issues. It is well worth reading.

Raymond states

Martin Gammon, director of business development for Bonhams, acknowledged the art will be going on the block at a time when "the art market is somewhat down from its highs of 2007." But he said he expected the Heller auctions to be successful.

"In this particular instance, the pieces are post-war and contemporary, which has seen some deflation, but most of that speculation took place at the very high-end of the marketplace, pieces that were selling for hundreds of millions of dollars," Gammon said. "This is all, I would say, very well selected and well curated material."

Peter Benvenutti, the chair of Heller Ehrman's dissolution committee who is now at Jones Day in San Francisco, said he expected the auction to generate "a small fraction of the original cost" of the art, which he said was substantially more than $1 million.

"The short of it is the timing of the sale is not driven by the art market. The timing of the sale is driven by the process in the dissolution and bankruptcy case," Benvenutti said.

Partners at Heller Ehrman voted to dissolve the firm in September 2008 and filed for bankruptcy that December in the U.S. District Court in San Francisco. Since then, the firm has been busy winding down in order to pay off creditors, including selling assets such as its art. The firm submitted a liquidation plan last week.

Heller listed $50 million to $100 million in liabilities when it filed for bankruptcy last year. According to last week's liquidation plan, $232 million in unsecured claims had been filed in the case.

The bulk of Heller's collection was in its West Coast offices, the firm said in a motion to sell its art in August filed in the bankruptcy proceedings. It had 1,050 photographs, prints, paintings and sculptures. Of those, 113 pieces were in New York and

To read the full Law.com article, click HERE.