Former Seattle Art Dealer Arrested Again

I hope everyone had a wonderful Memorial Day.

Former Seattle art dealer Kurt Lidtke was arrested again for planning to steal and then sell artwork.  According tot he Seattle  Times, Lidtke was arrested in Bozeman, Montanna, and was planning to sell stolen art work to an undercover FBI agent.  Lidtke was previously convicted and served prison time for selling consigned art work from his Seattle gallery and not paying the consignors.

The Seattle Times reports (in its entirety, as it is so short)

Former Seattle art dealer Kurt Lidtke was arrested Tuesday morning following an undercover FBI investigation into an alleged scheme to resell expensive artwork stolen from Seattle homes, including works by Rembrandt and noted Northwest artist Morris Graves.

Litdke and two others have been charged with to conspiracy to transport stolen property in interstate commerce.

Lidtke, the former owner of Kurt Lidtke Galleries in Seattle, was arrested in Bozeman, Mont. Also arrested and charged were Jerry H. Christy, aka Nick Natti, and Georgia Christy, aka Monica Natti, at their Granite Falls home.

They will make make an initial appearance in U.S. District Court in Seattle Tuesday afternoon.

According to the U.S. Attorney's Office, Lidtke and the Christys conspired to steal valuable artwork from homes in the Seattle area and sell it to a buyer in Oregon. The buyer was an undercover agent with the FBI. In the course of the investigation, the FBI recovered numerous paintings and a sculpture that had been stolen in a Seattle burglary in November 2009, the U.S Attorney's Office said.

According to a news release, the FBI conducted surveillance of the three defendants and their possible targets. Earlier this month, the FBI had Seattle police contact Christy while he was parked in a van outside a targeted home, thre news release says. Christy allegedly provided false identification documents in the name "Nick Natti" to the police officers. He was not detained, but the FBI opted to make arrests Tuesday to prevent additional burglaries, the news release says.

Paintings recovered in the course of the investigation include two by Graves, one by Mark Tobey, and a Rembrandt etching. Some of the recovered art was stolen as early as 2004, the news release says.

To view the charging documents, click here.

In October 2007, Lidtke was sentenced to 40 months in prison after he pleaded guilty to nine counts of theft. From 1999 to 2004, Lidtke went to the homes of art collectors and signed agreements to sell on consignment the works by artists in the Northwest School. The owners were not compensated, court records say, nor were the paintings returned.

French Auction Mis-Attribution Causes Conflict

Simon Hewitt writing in the Antiuqes Trade Gazette has an interesting article on a French auction held in February.  Within the sale was a painting noted as 19th century, entitled Owl on a Bare Branch, was estimated at 80-100 Euros and eventually sold for 350,000 euros.  The painting is now believed to be by Caspar David Friedrich (1774-1840), and could be worth 10 times what was paid for it.  It was purchased by dealer Paris dealers Talabardon & Gautier, but it has not been released by the auction house.

Since it was not listed with the proper attribution, a French law may nullify the purchase. The Talabardon and Gautier check has not been cashed, and the painting may be deemed a French national treasurer. It reinforces the need for proper authentication of pieces of art at every level of the market.

The ATG reports

Although the sale description of the Friedrich was not factually inaccurate (as “studio of Poussin” was deemed to have been), Bertrand Gautier fears that the discrepancy between the estimate and the hammer price could prompt a French court to annul the sale.

Even though nearly four months have elapsed since the sale, and he has yet to see his acquisition, Gautier claims to be “serene” about the situation and hopes it can be amicably resolved. “We are talking to all the parties concerned,” he told ATG. “It’s a complex situation. One could imagine there might be problems of this sort, given the price.”

Some have pointed out that French law appears to penalise dealers from exercising their business to the best of their ability: i.e. by taking risks to back their judgment. They argue that the vendors, despite their ignorance, and the auctioneers, who displayed casualness if not incompetence, are not just legally blameless but stand to benefit from the dealers’ knowledge.

Gautier believes that the situation is unjust. “This is embarrassing for everyone, and not good for the market. Part of our role is to be discoverers. But, if you discover something, you can see your acquisition challenged. It’s not the auctioneers or the vendors who suffer, it’s the buyer.”

Just the sort of mess, you might think, which the Conseil des Ventes – that uniquely French body – was designed to avoid, or at least clear up. Yet the Conseil is powerless to intervene unless solicited by one of the interested parties, and there has been no sign yet of any such appeal.

To read the full ATG article, click HERE.

Frederic Church Discovered

Sometimes a little bit of cleaning and the right authority and the right time can lead to important discoveries.  The Art Newspaper is reporting on a Boston owner of a painting who contacted Davie Dearinger, the curator at the Boston Athenaeum about a painting he thought was a Frederick Church.  The painting was unsigned, needed cleaning and with some earlier restorations. As additional authentication, as the painting is not signed is an image from the 1890's of Church's studio which shows the painting.

I have taken the liberty of posting the full article from the Art Newspaper.

Boston. It was the kind of phone call that curators get weekly—but that often bear no fruit. In 2007, a resident of Beacon Hill telephoned David Dearinger, curator of paintings and sculpture at the Boston Athenaeum, to say that he owned a painting that had  been in his family for years, and according to family legend it was “a Church”—meaning, Dearinger supposed, a work by the 19th-century American landscape artist Frederic Edwin Church. “I was understandably sceptical,” Dearinger told The Art Newspaper, “but since the caller was in the neighbourhood, I told him I would at least visit and take a look.”

Surface dirt obscured much of the scene, which shows thunder clouds at sunset and a steamboat. But while it was difficult to pick out all the details, Dearinger was “immediately struck” by the luminous, intense red clouds that shone through the centre of the painting. Although it did not have a signature, “it was just the sort of colour that Church was so good at capturing”, said Dearinger.

He asked to see the reverse of the painting and noticed an old calling card stapled to the back of the stretcher. The owner lent the work for study and cleaning to the Athenaeum, and Dearinger sent it to the Boston fine art restorer Oliver Brothers. The cleaning removed discolouration from prior inpainting [the process of applying new paint to areas that suffered paint loss] and old darkened varnish, which revealed that originally the ship was “in a different location altogether”, said restorer Greg Bishop.

The cleaning also revealed the back of the calling card—and its handwritten notation, “Evening on the Sea/F. E. Church.”

Meanwhile, Dearinger had been researching Church’s seascapes, and found that a painting, Evening on the Sea (1877), had been exhibited at the Century Association in New York in March 1878, and at the National Academy of Design the following month. At the time, the work’s current whereabouts were unknown. But contemporary reviews of the seascape “gave enough of a description” to support a match with the Boston painting, Dearinger said.

Clinching the match is a 1890s photograph of the artist’s studio, which “clearly shows” the newly found Boston painting sitting on an easel. “There’s just no question that it is the missing painting,” said Dearinger.

Sadly, 19th-century critics disliked the work, a mix of dark boiling clouds and dirty smoke from the steamship, which is actually a refitted sailboat. “It was a time when sailboats were disappearing and steam was taking over.” Not long after, Church’s career effectively ended.

The painting is on long-term loan to the Athenaeum, where it is now exhibited for the first time in over 130 years.

Excerpt from the Journal of Advanced Appraisal Studies - 2010

I am very please to see the 2010 edition of the Journal of Advanced Appraisal Studies is selling well.  It has been very well received by the personal property appraisal community and supported by many appraisal organizations. Comments and praise have also started to show up on many social media sites and blogs. The feedback and comments have been very positive, I believe, in my biased opinion, that given the quality of content, the Journal should be in every appraisers library.

Every once in a while a professional appraiser may be approached by a Church or a Synagogue to appraiser contents and collections.  Elizabeth Kessin Berman, AAA, ANA has developed her appraisal practice around the identification and valuing of religious objects.

Ms. Berman graduated Boston College, and with the proper course work in the art of the ancient world, she spent a lengthy time in Israel working on an archaeology degree at Hebrew University. She also made her living as a field and research archaeologist with both the Israel Department of Antiquities and Hebrew Union College. Back from Israel, she earned Masters Degrees in ancient art and archaeology from Harvard Divinity School and Harvard University's Fine Arts Department. She has traveled extensively in Europe, Turkey, Greece, Cyprus, and Egypt.Elizabeth currently operates two appraisal companies, one Judaica In Context, devoted to expert appraisals of Judaica objects, Jewish art and Jewish historical documents. The other is Collections In Context, a company devoted appraisals and curatorial services related to modern and contemporary art and general estate appraisals. Elizabeth is a certified member of AAA and the ANA.

To order your copy of the Journal or for more information visit www.appraisaljournal.org.  Proceeds support the educational initiatives of the Foundation for Appraisal Education. The cost is only $55.00 for the printed version and only $25.00 for a PDF download. For a limited time there is free shipping option when ordered, so dont delay, order today and save.

An excerpt from her article:

Judaica objects are roughly divided in to various categories, but the two major divisions are ritual and domestic objects. Ritual objects or, in other words, objects used to enhance or support Jewish worship, include silver objects adorning the Torah Scrolls (the parchment scrolls on which the first five books of the Hebrew Bible are written); textiles to cover the Torah scrolls, and the synagogue ark in which the Torah scrolls are housed. Ritual objects also encompass eternal lights, wine goblets, spice boxes, memorial lamps, Hanukah lamps, and Torah pointers, as well as synagogue decorations, decorative calendars, and decorative wall plaques that may have psalms or blessings. These plaques often are used to indicate the direction “east,” toward Jerusalem. All of these objects have names in English, although sometimes the familiar Hebrew or Yiddish name might be used in a sale or in a gallery. The Jewish Museum, New York has a very useful website that offers a glossary of common Hebrew and Yiddish terms and also has an on-line gallery that can help identify Judaica objects (www.thejewishmuseum.org/glossary).

Domestic objects comprise any object used to celebrate the many different Jewish holidays during the calendar year and all of the life cycles from birth to death in a home context. There are many items used to celebrate the Sabbath in a home: Sabbath candlesticks, Sabbath bread trays, Sabbath lamps, blessing cups. There are also many objects used to celebrate various holidays: inscribed plates showing holiday ceremonies, spice boxes, Hanukkah lamps, Passover plates, and bread covers, not to mention wall plaques, paper-cut decorations, calendars and micrographic representations of the Hebrew writings and many more. All of these objects are likely to be found in a synagogue even though they are domestic in nature. In the synagogue context they are bound to have some communal use or educa-tional purpose.

Also included under the umbrella of ritual or domestic Judaica are genre paintings and tapestries of Rabbis or domestic scenes. The art of Jewish artists, whether an artist creating Jewish subject matter or an artist who happens to be Jewish, is sometimes also included under the umbrella of Judaica. The art of Marc Chagall is a good example of an artist whose work frequently appears in “Judaica” collections. Judaica also embraces the field of decorative arts, fine arts, ethnographic artifacts, and travel souvenirs, including jewelry, amulets, and small kitchy or common objects (some call these tchuchkes in Yiddish). There are many, many more categories and the list seems ever to expand. All of these objects are likely to turn up in a synagogue too.

Once an appraiser identifies what the object is, then an appraiser must ask a host of significant questions in order to fully establish the identity of the object: where is this Judaica object from? What does the inscription say? When was it made? By whom? And what is its purpose? Many of the clues to establishing the date, origin, and identity of an object can be found by interpreting the inscriptions on the object, as many Judaic objects are inscribed with donor inscriptions and corresponding dates. In addition to donor inscriptions, Judaic silver will often have silver marks that greatly aid identification and dating. However, in the absence of inscriptions, the Judaica appraiser has to discern local, regional, or national styles in order to settle on a geographic source and date of an object. Judaica objects may originate in North Africa, the Middle East, or the United States. Or they may be from Central, Northern, or Eastern Europe. Within these regions there are wide variations of styles. Judaica makers invariably borrowed from their local styles and therefore, in settling on a geographic source of a Judaic object, one must look at the object and determine the general character of its stylistic, decorative, and technical elements. It is important to note that Judaica objects were often made by non-Jewish craftspeople, since Jews for many centuries, especially in Europe, were not allowed membership in craft guilds. Thus a 19th Century Italian Hanukkah lamp might very well have features that resemble decorations employed on an Italian lamp stand. Regarding value, a Judaica object from England and Italy will be appraised more highly than one from Eastern or Central Europe, because objects from the former are, for the most part, more highly crafted and rarer (Figure 11). There are regional differences that are to be factored into the valuation of Judaica pieces.
In returning to the discussion on appraising contents of houses of worship, it is certain that all synagogues will have a large assortment of ritual “Judaica” objects. Most are made recently, but quite often, synagogues with longer histories may have amassed important silver ritual items. In synago-gues with larger congregations one may encounter display cases—mini-museums-- in which they exhibit historical Judaica.

 Order your copy of the Journal at www.appraisaljournal.org.

The Mind of an Art Thief

In the aftermath of the recent Paris art theft, there have been many articles in the papers and news about art theft.  I just posted two the other day on museum security.  USA Today was interested in why people steal art, as many believe it is difficult to sell stolen works, and the process of selling to the underground wealthy collector is not widely accepted.

USA Today asked several experts, including psychologist as to why people steal art.

USA Today reports:

USA TODAY's Mary Brophy Marcus asked several experts, none of whom are involved in the criminal investigations in France, to give their take on the type of mind that could be lurking behind such a robbery:

Q: When someone steals fine art, what could be the motivation?

A: There could be any number of motivations. This is a rare event and it's even more rare to understand what's going on. If you look back historically at other pieces of stolen art, the motivation is idiosyncratic. Look at the Mona Lisa's theft — taken from The Louvre in Paris in 1911 by an Italian patriot. He resented that one of Italy's greatest pieces of art was being displayed in France. So you get individual motivation there, or a political motivation.

And then there's money….the theft of art has become much more linked to organized crime syndicates. The art can be resold, bartered behind closed doors. Sometimes it is more like a kidnapping in that way. It could be the thief's retirement plan.

Or, another motivation: he may want it so he can enjoy it.

• Joel Silberberg, Director of the Division of Forensic Psychiatry at Northwestern University

Q: Why steal objects of this magnitude versus a petty theft where you could fence the filched items more easily?

A: It could have nothing to do with money. It could be an aggrieved person — something as mundane as that. Someone who thinks, "You fired me or didn't promote me and I'm going to show you up, show how incompetent you are."

—Northwestern's Silberberg

Q: So could the thief be as sane as you and me?

A: Yes. What we've found in our research is that lots of people are willing to cheat, to be dishonest. We are talking about MIT, Yale, Duke, Harvard students — regular smart people who are likely to take on positions of leadership in society.

We have a flexible psychology. We find two types of people: the common type of cheater who does it only when they can rationalize it to themselves, and the non-common type who does it for cost-benefit analysis. The question then is, which type are these art thieves?

•Dan Ariely, James B. Duke Professor of psychology and Behavioral Economics at Duke University, author of "The Upside of Irrationality" (Harper Collins, June 2010).

Q: Does the second art robbery, the attack on a collector in his private home, change the way the public might view the thief if the two robberies are linked to the same source?

A: Yes, I think that now people will be more upset and the reflection on the character of the thief is much more negative. The reality is that we treat blue collar crime and white collar crime very differently. There's something uniquely interesting about crimes that have to do with public property where nobody really suffers — we don't see a villain hurting a particular individual. We may even kind of feel thrilled by them. But this would not happen if it was someone going into a grandmother's apartment and stealing.

• Duke's Ariely

Q: Could the thief be someone with a psychological disorder?

A: It's highly unlikely that it was someone with schizophrenia or who is manic. That person wouldn't really be able to steal it in this way. They wouldn't have the ability to plan that far ahead.

At first look, someone might say kleptomania. But on closer look, this doesn't match that at all. In kleptomania, the stealer will surreptitiously hide the stolen item. It's the actual act of theft that brings a sense of relief, not having the paintings.

There is a disorder called delusional disorder. That person could be paranoid in their thinking but still have a very good ability to plan and focus on a more complex theft of this kinds.

• Northwestern's Silberberg

Q: Do you have to be smart to pull of a major art museum heist?

A: It's my understanding that this was the deliberate work of one person on the scene, presumably with others working with him, and presumably for private collector(s).

If so, then this requires a high degree of intelligence, practical intelligence, social intelligence and pre-planning. I would guess these are the same elements required of many premeditated crimes.

• Barry Gordon, Professor of Neurology and Cognitive Science, Johns Hopkins Medicine

Luxury Goods in Demand

Although much of Europe and the US locked in the throws of economic complexities and problems. luxury and the wealthy are still an effective pairing.  Reuters in reporting that Tiffany beat its expected sales volume for the 1st quarter and nearly doubled sales income from the same period last year. Asian sales were up 50%. As in the art market, property at the top end of the marketplace is selling well, although drop down a level or two into the middle markets and there still is much concern.

Reuters reports on Tiffany

Q1 EPS ex-items 48 cts vs Street view 37 cts

Stocks  |  Global Markets  |  Cyclical Consumer Goods

* Sales at flagship Fifth Ave store up 26 pct
* Sees FY EPS $2.55-$2.60 vs Street view $2.51
* Sees overall FY sales up 11 pct; to open 16 stores (Adds sales figure, store count)
NEW YORK, May 27 (Reuters) - Tiffany & Co (TIF.N) reported a better-than-expected quarterly profit on Thursday bolstered by a resurgence in luxury spending worldwide, and the company raised its full-year profit forecast.
The upscale jeweler's net income of $64.4 million, or 50 cents per share for its first quarter, which ended on April 30, more than doubled the earnings of $24.3 million, or 20 cents per share a year earlier.
Excluding one time items, Tiffany earned 48 cents per share, beating Wall Street forecast of 37 cents, according to Thomson Reuters I/B/E/S.
Sales at its stores open at least a year, or same-store sales rose 10 percent, lifted by growing international sales.
In Asia, sales rose 50 percent, while at its flagship store on Manhattan's Fifth Avenue, sales were up 26 percent.
Overall sales rose 22 percent to $633.6 million during the quarter.
Tiffany raised its full year profit forecast to a range of $2.55 to $2.60 per share, above the average Wall Street estimate of $2.51. Tiffany expects sales to be up 11 percent this year and to open 16 stores.
Tiffany operated 221 stores and boutiques as of April 30, up from 209 a year ago. (Reporting by Phil Wahba; Editing by Derek Caney) 

Museum Security

Ulrich Boser writes in the Wall Street Journal about security and art theft at museums. After the Paris theft, security at many national and international museums have been under review, as it seems far too easy to steal priceless pieces of art. The Washington Post also ran a story on museum security. The Post story notes that given the newer museums in the US, and the imposing security in DC, theft is less of an issue in American Museums, although it does exist.

Boser makes several important points. One that sufficient security is expensive, and given the current economic climate, many cultural institutions do not have excess funds for added security. Also, part of the issue is that museums wish to be open and inviting, and therefore having an open atmosphere, which of course runs counter to stronger security. Both the WSJ and the Washington Post articles present interesting views on museum security. I recommend appraisers read both.

Boser states ibn the WSJ

To be sure, security is expensive. A full roster of guards can eat up half of a museum's operating budget—and that doesn't include the cost of high-tech motion detectors and electronic keys. A small institution can spend more than $1 million a year on security services. The Smithsonian in Washington, D.C. pays out almost $70 million annually to protect its collection, and even that might not be enough. A 2007 government report found that the Smithsonian did not have enough guards to respond to alarms, and someone had managed to sneak some mammalian fossils out of one of the galleries.

Museums also suffer from an art-security Catch-22: By making it easy for the public to experience great art, they make it easier for crooks to steal it. And when institutions don't provide an intimate, nose-to-the-canvas environment, visitors complain. When thieves pilfered Edvard Munch's masterwork "The Scream," they left behind a note that said "Thanks for the poor security." After the heist, the Munch Museum in Oslo turned their institution into an art-world Fort Knox, with metal detectors and an X-ray machine. The press dubbed the building Fortress Munch, and some art-lovers grumbled, saying that they couldn't appreciate the masterpieces because of the thick, protective glass.

But for all the theft, it's not easy to make money on art crime. It's nearly impossible to reintroduce stolen works into the legitimate market; almost every major auction house uses international databases to make sure that they don't sell hot canvases. Nor will a crook find much success selling the stolen art to a Dr. No or Mr. Big. It's a familiar trope: a painting-obsessed collector who snatches up stolen works to display in his secret hideaway. But it's also a myth. While art-lovers will occasionally purchase items with weak provenance—and a crook might put a looted Hopper on his wall to impress his buddies—law enforcement has never found any evidence of a dedicated collector buying looted paintings. It's not worth the risk.

There are nevertheless ways to profit from art theft. Some organized-crime syndicates will use looted paintings as collateral in underworld drug deals. Others attempt to turn the canvases into political pawns, trading works for prisoners or peace deals. One professional art thief managed to convert an Old Master into a judicial bargaining chip: In 1974, Myles Connor filched a Rembrandt from a museum and arranged for its return a year later in exchange for a reduced sentence for a different art crime.

The Washington Post reported

The Art Loss Register, a recovery operation and private international database for stolen art, receives requests from Washington museums, galleries and private collectors every few months, according to its general counsel and executive director, Christopher A. Marinello.

"Washington does get their share of art heists -- you just don't hear about them," Marinello says. "Just last year I dealt with an art gallery in Washington that had a Chagall that was stolen [worth about $45,000]. There was also a Picasso drawing taken [and then sold for $58,000]. We resolved it amicably and quietly and you didn't hear about it. . . . I easily could say 75 percent of the cases that we handle -- especially the higher-end ones -- get settled discreetly because you have lawyers crawling out of woodwork and the first words out of their mouths are: 'This has to be confidential.' "

Marinello could not elaborate on specific cases.

Cracks in Washington's armor showed up in a 2007 report by the Government Accountability Office, which found that the Smithsonian's security force was understaffed, its directors were lacking information on key security measures, and the number of security officers had decreased as the institution's square footage increased between 2003 and 2007. After the report, the Smithsonian hired about 40 guards and increased salaries to cultivate a more experienced security staff. By the end of this year, it plans to add 110 new security personnel.

To read the WSJ article, click HERE, to read the Washington Post article, click HERE.

Point Counter Point on Antique Shows

Back in the April issue of the New England Antiques Journal, editor John Fiske wrote an editorial about the current state of antique shows. Within the article, Fiske separates antiques shows into three distinct categories, including general interest shows, collector interest shows, and social interest shows.

Show promoter Bob James of Armacost Antiques Shows recently responded to some of the commentary by John Fiske,. James agreed with some of the commentary, and also, politely disagreed with some of the conclusions.  I know both Bob and John, and find them to be both strong advocates of the antique trade and true professionals.  We should listen to what they have to say.

This was recently sent out in the Armacost Antiques Shows newsletter, Early Edition.  It can be read by clicking HERE.

"Social Interest" Shows Still Fill Important Needs

As always, John Fiske’s column in the April edition of New England Antiques Journal ("Shows in the Age of the Internet”) pushed me to think hard about the pluses and minuses of antiques shows. "The problem for show promoters," John writes, "will lie in making real-life browsing efficient and enjoyable enough to counter the Internet’s huge advantages in time-costs."

He goes on to distinguish three types of antiques shows:

1. Although time-consuming to navigate, “general interest shows” will thrive in the future, John believes, because, "despite all that the Internet has to offer," these large shows provide "unparalleled browsing."

2. “Collector interest shows,” on the other hand, face stiff competition from the Internet, specifically from specialty dealers' Websites. But they will continue to muddle along, because they offer sufficient depth of category to satisfy browsers.

3. “Social interest shows” (boutique-size shows that benefit nonprofits) are in the greatest jeopardy, John believes. That's because most of the people browsing these shows "are motivated by the lifestyles of their social set," which today embraces "exotic vacations, self-pampering services, cutting-edge technologies from home theaters to gadget-laden cars and sometimes art, but rarely antiques."

To survive, social interest shows have to innovate, John argues. "These are the shows that most urgently need to re-invent themselves. They are vulnerable both to changing fashions and to category-rich searching on the Internet or at collector interest shows." The single advantage he grants social interest shows is that a few represent "special occasions," attractive in and of themselves to status-conscious browsers. But most don't offer much at all.

Of course, while I'm a proponent of re-invention, I don't agree completely with John’s analysis. I believe social interest shows (the kind I produce) satisfy three well-defined needs that neither the Internet nor the other two types of shows can fill:

1. Social interest shows offer exclusivity. Comparing a social interest show to a general interest show is like comparing the Hamptons to Coney Island. Not only are large antiques shows unattractive to wealthy browsers, they're unattractive to a lot of high-end dealers.

2. Social interest shows are a source of new customers. Dealers who acknowledge that at-show sales are not the only yardstick of success (and that the cultivation of important customers takes more than a momentary encounter in a booth) count on social interest shows for meeting prospects (not-yet customers).

3. Social interest shows are convenient both to dealers and customers. Dealers value the relative ease of exhibiting in small shows, compared to the ordeal they typically face when exhibiting in large shows. And shoppers enjoy the fact that a high-end antiques show comes once a year to "our own backyard."

Cheers and happy hunting,

Bob James
President
Armacost Antiques Shows
Web Link

London in June

Scott Reyburn writing for Bloomberg previews the upcoming June London art and antique fairs.  June was the time of the now defunct Grosvenor House Art & Antiques Fair which is being replaced  by the new Masterpiece London show in Chelsea, the Art Antiques London in Kensington Gardens, and the 37th annual Olympia art and antiques fair.  The different shows hope to promote London as the mecca for art and antiques in June and attract international collectors.

The shows will carry a mixture of antiques, fine art and luxury goods, including Picasso's, Bentley racing cars and 20th century modern. All in all, there should be something for every collector. Promoters are continuing to expand the type of property being offered in shows to appeal to a wider collecting audience.

Reyburn reports

A mix of luxury items is being offered at the first Masterpiece London show in Chelsea, while Art Antiques London in Kensington Gardens also aims to fill the gap created by last year’s closure of the Grosvenor House Art & Antiques Fair. Both will compete against the 37th edition of the longstanding Olympia art and antiques fair.

London dealers are trying to keep summer sales going as billionaire collectors come to the U.K. for auctions. The 75- year-old Grosvenor House event was the most prestigious of the traditional antiques events and ended with its organizers citing declining profit, increased costs and pressure on space.

“You could say it’s a pity there are three fairs competing with each other,” said London-based modern-art dealer James Holland-Hibbert, who will be exhibiting at Masterpiece. “Or you could say it’s a good thing for London, the more events the better. It’s important there’s a high-quality fair in the city in June.”

Holland-Hibbert was one of more than 90 dealers who showed at the Grosvenor House fair.

“It had become tired and long in the tooth, and was constricted by its hotel venue,” he said.

To read the full article, click HERE.

Chinese Market Strength Continues - Even in Regional Houses

The Art Newspaper is reporting UK regional auction house Woolley & Wallis, Salisbury has set a record for sales from a second tier auction house. The recent oriental sale totaled 8.8 million pounds (approximately $12.7 million).The previous record was 6.6 million pounds, also set by Wooley and Wallis. Perhaps we can call this trickle down economics for auction houses.

The top lot was a jade bell (Qianlong reign mark 1736-1795) with an estimate of 200,000 to 300,000 pounds.  It sold for 2.46 million pounds.  Half the sales value came from the top 10 oriental pieces.  Most of which will be repatriated back to China, as the buyers were from mainland China. The sale shows that quality items are continuing to gain momentum, even beyond the main international houses.

Along those same lines I hear from a fellow appraisser Francine Proulx that reginal auction house Quinss, of Falls Church, VA recently had held a catalog sale with a group of Chinese scrolls. I hear the bidding was furious.  The Proulx stated "It went absolutely wild over the Chinese scrolls they had -- grossed close to $200,000 from them alone. There was a group of wealthy Chinese collectors there -- they were one upping one another -- and all knew each other."

The Art Newspaper reports

The headline work was an Imperial white jade bell, or ghanta, with a four character Qianlong reign mark (1736-1795), which sold for £2.46m (est. £200,000-£300,000). Representing wisdom and feminine power, it is one of the most important symbols of Tibetan Buddhism when combined with the masculine power of vajra, represented by a sceptre. An almost identical ghanta is in the Palace Museum in Beijing.

A pair of Imperial grey-green jade elephants from a throne-room group of the Emperor Qianlong made the second-highest price of £1.23m (est. £200,000-£300,000). “We knew both the ghanta and the elephants would make seven figures, but thought the prices would be the other way round—the ghanta is more to Chinese taste, while the elephants are perhaps easier for Westerners to appreciate,” said John Axford, who masterminded the sale, competing with Christie’s to win the consignment.

Throughout the sale the rocketing strength of the Asian art market was in evidence. Statistically, Woolley & Wallis’s established May Asian Art sale has grown year-on-year, with 85% of its 928 lots sold in 2009 and 69% of its 752 lots in 2008 sold. This year, there were 1013 lots, of which 83% sold. In addition to the two works examined, 11 lots went for over £100,000, while 22 made more than £50,000.

To read the full article, click HERE.

Update: Minor vs Christies

Kelly Crow, writing for the Wall Street Journal reports that Halsey Minor has won in a suit against Christie's auction house. Minor sued Christie's after the auction house failed to return property in a timely manor. Minor claimed that because of the delay, the market went into decline and the value of the art was reduced. Christe's held the art from May until Nov 2008, as the contemporary art market fell considerably. Christie's claimed to hold the property as collateral against monies Minor owed the auction house. The court ordered Christie's to pay Minor $8.57 million which was deemed the amount of loss of value.

Determining the difference in value was probably a very good assignment for an appraiser. I certainly hope the court and both sides used expert fine art appraisers in determining the loss of value over those several months.

Minor still owed Christie's approximately $7 million, so the judge ordered Minor to pay the difference of about $1.4 million to clear his debt. Minor still has litigation pending with Sotheby's whom owes around $6 million and as reported here on the Appraiser Workshops Blog he just sold $21 million in art to cover other debt with Bank of America.

Crow reports

Mr. Minor owed the auction house roughly $12 million for other works he bought from the house around that same time, including a painting by Mary Cassatt, according to court documents. He continued to bid at Christie's sales throughout that spring and summer of 2008, winning other works such as a Thomas Moran landscape, five equestrian scenes and an Andy Warhol print of Grace Kelly.

By mid-August, Mr. Minor had paid $5 million toward his purchases and asked Christie's to return his Prince pieces, which hadn't attracted any buyers. The auction house told Mr. Minor the Princes would be returned to him shortly, yet Christie's staff had actually decided not to ship them back until Mr. Minor paid his remaining debts in full, according to staff emails submitted to the court as evidence.

Mr. Minor complained and Christie's returned the works in November, but the house's decision to tell the collector one thing but do another led the jury to find Christie's guilty of fraud, according to the court verdict. The jury also found the house guilty of breach of contract and conversion, a legal term for wrongfully keeping another's property.

Mr. Minor, who reneged on paying for the remaining $7 million of his winning bids, was ordered by the judge to pay Christie's $1.4 million – the difference in the commission the auction house would have collected from him compared with the lower commission it got from eventually reselling the Cassatt and other works at a discount.

To read the full WSJ article, click HERE.

Art Market Subtleties

Sometimes it is hard to define what happens in the art market.  The uniqueness, subjectivity, value systems, and economic issues, plus many more factors can all come into play.  At at times, it can be hard to explain the nuances and subtleties of the art market. Currently, we have seen trends where the top end of the market has been very strong.  Qualtiy items with good provenance have been selling at premiums.

For example, Christie's was selling Maxfield Parrish's Daybreak, painted in 1922 owned by divorcing couple and movie acotr Mel and his wife, Robyn Gibson.

One makes this particular transaction interesting is we can track several recent sales.  First, the Parrish sold in 2006 to Gibson for a then Parrish auction record of $7.6 million. It was previously on the market 10 years earlier at Sotheby's when it sold for $4.3 million.  It recently sold at Christie's out of the Gibson collection for $5.2 million.  Well within the estimate of $4 to $7 million.

Perhaps it was over exposrue, but being owned by Mel Gibson and his wife did not seen to help, nor did the idea of it being considered one of Parrish's best and more famous works.  In today's market, it would typically be expected, given the quailty and provenance that the painting would have done better. Just when you think you have things figured out the exception to the rule comes along.

It is an interesting valuation chronology for the appraiser to consider and without further study, certainly shows the subjectivity of the art market and buyer/collector motivations.

Estate Tax Legislation Falters

I spotted a post on a LinkedIn group about current estate law bills being considered as reported by The Hill.  Although the Senate bill has faltered, it does show the direction and levels being considered.

In summary, The Hill (click to read)  is reporting that a proposal by Senate minority whip Jon Kyl (R Arizona) to pass a bill for estate tax in the Senate has failed.  Although details of the plan were not officially announced, it was reported that Kyl wanted to see an exemption level of $3.5 million and a 35% tax for estates above that level.  There was also speculation the $3.5 million exemption level would not be effected by inflation, but would possibly move to a $5 million exemption level at some point in the future.  There were also discounts for pre payments.

There was not any notation in the article on the law being retro active, and supposedly fell within the guidelines of the pay as you go rules in Congress. The reason for the breakdown is that Senate democrats are not allowing bills to the floor unless there is a majority of democrats backing the bill. It appears that Republican Kyl was not able to get the necessary number of democrats to back the bill.

The House had passed a bill with a $3.5 million exemption and a 45% levy.  If the Senate bill passed, then the two bills would be reconciled and a final estate tax bill would be passed.  Negotiations continue and I will post as I get additional information on the status of the estate tax.

Major Art Theft in Pairs

The New York Daily News and other sources are reporting on the theft of 5 paintings from the Paris Museum of Modern Art. According to the NY Daily News the paintings are estimated to be worth a total of over $600 million. The NY Times states they are worth between $75 and $125 million.

A lone thief was caught on Video tape, but authorities have little to go on.  The alarm was disabled and the artwork was cut from frames.  Given the notoriety of the paintings, experts believe the paintings may be offered for ransom.  Some articles suspect an organized crime possibility.  In any event the theft was well planned and executed.

The five paintings are

• "Le pigeon aux petits-pois" (The Pigeon with the Peas) by Pablo Picasso
• "La Pastorale" (Pastoral) by Henri Matisse
• "L'olivier pres de l'Estaque" (Olive Tree near Estaque) by Georges Braque
• "La femme a l'eventail" (Woman with a Fan) by Amedeo Modigliani (see image)
• "Nature-mort aux chandeliers" (Still Life with Chandeliers) by Fernand Leger

The NY Times reports,

The stature of the paintings would make them extremely difficult to sell in the art market, raising questions about whether the theft was a form of kidnapping to demand ransom from the museum. Police and museum officials said little about the security failure, particularly whether the alarm system had malfunctioned or had been disabled. The French newspaper Le Parisien quoted an unidentified source from the museum who claimed that the security alarm had not worked for two months, and that management had been notified of the problem.

But in a hastily called news conference outside the museum, Christophe Girard, deputy mayor of culture for Paris, told reporters that the museum was equipped with security alarms, and that three armed guards patrolling the museum on Wednesday night had not noticed anything amiss.

“We must leave it to the police to determine how the security system was evaded,” Mr. Girard said.

The theft, he added, was carried out “by one or more individuals, obviously very organized,” who entered by breaking a window at the rear of the east wing of the Palais de Tokyo.

To read the NY Times article click HERE, to read the NY Daily News article, click HERE. Also, click HERE for a good article from the Guardian.

Journal Review

Jerry Sampson, ASA publishes a blog where he reviews new and previously published books which are relevant to the appraisal profession.  Jerry just completed his review of the Journal of Advanced Appraisal Studies - 2010.  In the course of full disclosure, Jerry is also a contributor to the Journal. As he states, he found several articles to of assistance and interest to his appraisal practice.  Just like any other publication, there are articles in the Journal that will fit and assist with appraisal assignments, and others may not be as helpful, but all will certainly add to your level of knowledge and scholarship and make you a better and more informed appraiser.

You can visit Jerry's Antiques Reference Books Reviews blog at http://antiquesreferencebooks.blogspot.com, it is an excellent site. Based upon his recommendation and recent review I just purchased the book Auctions, The Social Construction of Value. I highly recommend his book review site.

For more information or to order the Journal, click HERE.

Lulu, the printer is now having a summer special where most books will ship with no delivery charge. A great time to order and save.

Jerry's review of the Journal states

I look forward each year to the professional publication. This year was extra special for myself personally and professionally. This 2010 edition contained the my first publication in a professional journal. This book if you are familiar with previous editions will not disappoint. I just finished it last night and was impressed with the various topics. I found several to be very useful and quite informative. A few of the topics that were covered are For Love or Money: Antiques as Investments, Appraisers v/s Authenticators, Personal Property Appraising, The Element of Time and Price Anomalies and Establishing the Appraisers Library ( which was my own work.) A few that really shed light on subjects that I don't normally study on were Reading a Two-Dimensional Artwork: Suggestions for the Generalist Appraiser and Folk Art for Appraisers both of these were just stellar and will be helpful in my career in the future. In fact anyone in the looking for the more serious aspects of this business will find all of these articles useful, meaningful and relevant to the current markets. This is a highly recommend work for the professional appraiser.

CNBC Video on Recent NY Auctions

CNBC has a good online video on the recent NY art sales, including mentioning the Picasso which set an auction record for art at $106.5 million was sold to the Huntington Library. The two week period of sales brought $1.2 billion in sales. The video interviews Christie's Marc Porter and states Christie's sold $652 million over the two weeks of Impressionist, Modern and Contemporary sales. Porter states he sees that high quality art is a good store of value as an investment, with the added bonus of being able to enjoy the work.  Therefore the demand remains high.

The video is a little over 3 minutes and worth watching, not only as a review of the past auctions, but for the current mind set at the upper end of the market.

To view the video, click HERE.

Tepper Galleries of NY Closes

I missed this last week in the NY Times but I find it important enough to post. Eve Kahn reports that Tepper Galleries, a middle market auction house in New York City, active since 1937 has closed its doors. kahn states they empty out the property and left. No statement was released but according to the article the auction house had a lease with 8 years remaining. The Tepper Galleries website is still up, but auctions are listed as to be announced. No other news is posted.

It is a sad commentary on the middle market that such an established firm is failing. Granted, I dont know all of the reasons for the closure, and it could also be poor business decisions and management, but I do think it reinforces the problems the middle market is facing in the fine and decorative arts.

Kahn states

Tepper’s owners, Kenneth Hutter and Max Drazen, did not return several phone calls. Adam Hutter, an auctioneer at the company, referred calls to his brother Kenneth. The firm’s Web site still promises guidance “through all phases of the appraisal, consignment and auction process.”

Tepper’s lease still had eight years left when the gallery owners packed their goods into a few trucks, said Myles Schwartz, an executive managing director at Colliers International, which oversees the Tepper building. “If you can find them, let me know,” he said. “There was nothing we could do to hold them. They just brought everything out the front door.” Colliers will pursue legal action against the auction house, he said, “whatever we can do to recoup.”

To read the full article by Eve Kahn, click HERE.

The Chinese Art Market

China Daily has a good article on the strength of the Chinese art market.  The article is very bullish, stating that outside of the US, China now has the most billionaires, and many are looking for hedges against inflation and seeking to invest in art. In my Journal of Advanced Appraisal Studies article on Price Anomalies I mentioned the combination of the economy, high net worth individuals and art investments, and how when combined, price anomalies may occur. So there could be more eye opening prices as those with near unlimited funds seek the best quality artwork.

The Chinese market is so strong ancillary services such as financing and art investment groups are starting to operate, understanding the desire to collect and invest in art and purchase luxury goods. The question is, as the growth in this market has been so fast and the desire to collect so strong, is the Chinese art market secure for the long term or is it just a bubble?  Time will tell.

The article states

While people are increasingly concerned that severe inflation might develop after the country adopted a loose monetary policy last year in the fight against the financial crisis, the most wealthy are thinking about ways to maintain the value of their assets. Over the past few months, the price of risk-averse products including gold, jewelry, artwork and other luxury goods rose steadily.

Furthermore, analysts said that with hot money - betting on the appreciation of the yuan - continuing to flow in and finding channels for investment, the country's art market is likely to embrace a thriving season this year.

"Wealthy Chinese are restructuring their investment portfolio this year. If there are refined and rare works in the market, a new round of record breaking auction prices is likely to emerge," Zhang Shuo, a spokesman for Shanghai Contemporary Art Exhibition, wrote in an article.

Another noticeable phenomenon in the art investment market is the involvement of financial institutions. Financial services including artwork options, artwork mortgage loans and artwork entrusted investment were launched to accelerate the development of China's art market.

To read the full article, click HERE.

Update: Singapore's Tax Free Art Storage

Adam Majendie writes a good update on the status of Singapore's new tax free art storage zone. Almost a year ago I posted on the Appraiser Workshops Blog about the opening of a new tax free zone in Singapore, and that Christie's was to take a large section of the storage facility (to read the original post, click HERE).

Majendie states the just opened facility will rival that of Hong Kong and other Asian venues, and help propel Singapore into a center for the arts. The Singapore duty free zone is 323,000 square feet within the international airport, so storage may be done without paying duty or taxes or even customs forms.  Christie's has leased a full floor of the facility.  As I have mentioned in the past Christie's is aggressively moving into other areas of the art world, including galleries, financing, insurance, appraisals and storage.

Majendie states

The Singapore FreePort Pte’s 30,000 square meters (323,000 square feet) of strong rooms -- enough to cover about six football fields -- are inside

Changi International airport, allowing non-resident collectors to store valuables such as jewels and wine without paying taxes or filing customs forms.

“It’s a state-of-the-art facility,” said Francois Curiel, Asia president of Christie’s, which has leased a floor of the building to provide storage for private clients. “Singapore will again become an important centre for art.”

Shareholders in the project, modeled after the freeports in Switzerland, include Singapore’s National Arts Council and National Heritage Board as part of the government’s effort to tap the growing private wealth in the region spent on art and entertainment. Singapore has invested more than $1 billion in the past decade on arts facilities such as museums, concert halls and exhibitions.

“The art market in Asia is growing as fast as the regional economy,” said Alain Vandenborre, president and co- founder of the project with chairman Yves Bouvier, who is also head of Geneva-based fine-art shipping company Natural Le Coultre. “Singapore is probably the only place like Switzerland that offers the required stability, neutrality and security.”

To read the full article, click HERE.

Phillips de Pury Sale, Halsey Minor and Provenance

Bloomberg has a good but short article about Friday's contemporary art sale at Phillips in New York.  The interesting aspect is the sale had numerous lots from the collection of Halsey Minor, founder of Cnet and other technology companies (some of his purchases and legal issues have been covered here on the AW Blog).  Minor was selling at Philips in order to pay off creditors.  His art alone totaled $21..1 million of the $37.9 million total from the sale. Philips offered 77 lots of which 22 were from Minor.

Several art experts stated the Minor collection was good, but as the collection was only recently established, the ownership of Minor and his reputation as a serious collector did not directly  the impact the value of his offered lots at Phillips.  Todd Levin, director of New York-based advisers, Levin Art Group stated a new collection of only about 5 years such as Minor's has not been sufficiently established to impact value.

The article states

“He’s got a good eye,” said John Good, a director at Gagosian gallery in New York. “Between Prince, Newson and Ruscha, these are A pieces.”

Proceeds from the sale of Minor’s artworks will go toward a $21.6 million judgment obtained in October by ML Private Finance, a Bank of America affiliate, on a delinquent loan to Minor.

The Minor collection is too young for provenance to contribute to artworks’ value, said Todd Levin, director of New York-based advisers, Levin Art Group.

“It matters when it’s an established collection. When a collection was put together in the past five years, the provenance is moot,” he said.

Fashion designer Marc Jacobs, art dealer Larry Gagosian and jeweler Laurence Graff attended the auction, held in Phillips’s packed Chelsea salesroom. The mood was businesslike, but void of the party-like atmosphere of a typical Phillips sale.

To read the full article, click HERE.

Good, Better, Best Appraiser Workshop

Jane and I just completed another successful Good, Better, Best Appraiser Workshop. We had another excellent group of appraisers come to Alexandria, VA with a wide range of expereince to participate.  We had several appraisers from different parts of Virginia two from Texas, Florida and California, All attending appraisers were engaging and knowledgeable and eager to learn. They mostly enjoyed the close interactive atmosphere of a discussion based workshop. As you may know, we limit the size of the workshop to a maximum of 10 in order to keep the program discussion based and open to questions instead of using a formal lecture education structure.

We look forward to holding our next Workshop, if you are interested, drop me a line and I will keep you informed of our next offering.

Excerpt from the Journal of Advanced Appraisal Studies - 2010

Felicia Rossomando wrote an excellent Master's Thesis at the Sotheby's Institute on blockage discounts.  One of her instructors and counselors, Tom McNulty (a contributor to the 2008 Journal) thought it would be an excellent contribution to the 2010 edition of the Journal of Advanced Appraisal Studies.  Felicia had to reduce the scope a bit to meet the editorial guidelines, but she writes a great article on blockage discounts and also provides the reader with her own insights and ideas in dealing with artist estates and large quantities of art.

In my opinion, the article, entitled The Application of Blockage Discounts For an Artist's Estate: An Art Business Approach. is one of the best articles available to the personal property appraiser about blockage discounts. If you ever need to produce an appraisal that includes a blockage discount, you need to read and consider the content of this article. You can order the Journal or get more information at www.appraisaljournal.org. The appraisal library is not complete without it.

Rossomando writes

An artist’s primary asset at death is the artwork he or she leaves behind. This valuable asset, like other property, is subject to a mandatory evaluation for estate tax liabilities. Upon the artist’s death, the executor of the estate must file a federal estate tax return, complete with a thorough appraisal of remaining property, at its individual retail value. Unlike standard property valuation, however, the designated retail value of an individual work of art can be compromised by the simultaneous presence of many similar items–ie., many unsold works of art produced by the same artist. Essentially, if the estate attempts to sell all of the artist’s remaining work in a short interim, the large quantity would saturate the market, prompting a drastic imbalance in the supply and demand levels. To remedy this problem, appraisers have adopted a business valuation principle referred to as a blockage discount. In theory, a blockage discount protects an estate from unreasonable taxation on property that holds little value in great numbers.

Originally employed in business, the term blockage refers to a business valuation policy designed to rectify a realized price reduction when a substantial block of stock by a single company, which exceeds normal trading volume, enters the market all at once. Blockage is frequently recommended for estate tax returns that involve a block of like-kind securities that remain in the portfolio of the decedent’s estate. Blockage is a widely recognized and accepted practice by the United States Department of Justice. As a result of its successful application for blocks of stock, the Department of Justice, for the past thirty years, has authorized the use of blockage for artists holding a substantial number of unsold works of art in their estate at the time of their death. However, translating the traditional practice of blockage to works of art––distinctive, one-of-a-kind objects––presents an array of unique challenges.

Intent

This paper is broken down into three parts. First, it will deconstruct the concept of blockage from its origins in business valuation. Second, it will explore the early misapplication and misunderstanding of blockage in art valuation cases for artists’ estates. By exhibiting the complexities of blockage practice and theory, the third portion of this paper will propose a two-prong recommendation that can be implemented by practitioners both within the field of appraisal and more broadly, the art business industry.

This is the third excerpt I have posted from the Journal. The journal is an excellent tool for the appraiser, and the 2010 edition contains 18 articles of appraisal related content.  Order your copy today at www.appraisaljournal.org

More Salander News & Art Title Insurance

Philip Boroff writing for Bloomberg has additional news on items from the Salander O'Rilley Gallery.  Christie's will auction 130lots of art on June 9th.  Salander admitted to stealing and defrauding clients and investors in his art gallery of over $100 million.  The courts have ordered Salander to pay restitution, and therefore property of his has been selling at auction, including some recent decorative arts at Stair Galleries. The Chirstie's sale includes a work by Flemish master Peter Paul Rubens and art from “the studio of El Greco”. The sale is expected to bring $2.5 million according to Christie's representatives.

The interesting aspect of the items is they are those unclaimed by creditors, and have each been covered by an art title insurance polciy issued by ARIS Title Insurance Corp. The title insurance will protect buyers from future claims of ownership of the art. Given the amount of legal questions, and claimed art as security, collateral and consignments, the art title insurance policy is an excellent idea to induce buyers to purchase, and to protect them from future claims.

Boroff reports

Proceeds will benefit people and businesses that filed claims in U.S. Bankruptcy Court, after the gallery on Manhattan’s Upper East Side filed for bankruptcy protection in November 2007.

In March, a year after he was arrested, proprietor Lawrence B. Salander pleaded guilty in New York State Supreme Court to grand larceny and fraud. Salander admitted that he sold artwork he didn’t own and kept the proceeds, collected money for fabricated art-related investment opportunities and sold more than 100 percent interest in single works.

The June 9 sale is of art that creditors haven’t claimed or for which claims have been resolved by bankruptcy court. Each artwork is covered by Art Title Protection Insurance, issued by New York-based ARIS Title Insurance Corp., which protects the buyer against “defective title,” or someone coming forward to claim ownership.

U.S. Bankruptcy Court in January approved a settlement between unsecured creditors and Bank of America Corp.’s First Republic unit that led to the auction. First Republic lent the gallery about $30 million starting in 2002.

Under the settlement, unsecured creditors will receive the first $2.5 million from the sale, minus back taxes the gallery owed. What the bank and unsecured creditors ultimately get is based on a complex formula and any sale tally.

To read the full article, click HERE.

The Art Gallery and The Primary Market

Lindsay Pollock writing for The Art Newspaper has an excellent article on buying art from galleries, while discussing the ability to both control and place works of in demand artists.  The discussion is on artists that rarely appear in auction, and where demand is usually higher than the supply.  These scenarios are often of interest to appraisers, and the market levels, both primary and secondary should be understood by the appraiser as we select comparable property. Many contemporary artists and the galleries which represent them wish to placeproperty in museums and collections where they will remain, and not be used as speculative investments.  There are several cases, previously posted about on the AW Blog about artists blacklisting collectors for flipping artwork for profit.

All in all an excellent article for the appraiser to read.  I highly recommend taking time to read and understand the article.

Pollock states in the article

Art adviser Allan Schwartzman says strategic placement is a gallery’s core obligation to its artists. “A primary market gallery’s principal job is to protect the developing and fragile markets of artists,” says Schwartzman. “It would be easy to see the idea that you wouldn’t sell something to someone as elitist or abusive, but the idea of placing the art supports the financial, critical and art historical value of the work.

”All the angling and maneuvering to “place” and essentially protect the work is aimed at eventually landing works in museums, not auction catalogues. “Every dealer’s anxiety about a work less than two years old is that it winds up in a night sale,” says Schwartzman. When paintings fail to sell at auction, or sell for weak prices, it can taint the work, if not the artist’s reputation. “We have seen over and over in the marketplace, when a number of works come for sale in the secondary market at auction, and are passed, it has a tremendous impact on how people feel about an artist and their marketability,” says Miami collector Dennis Scholl.

On those occasions when a work does appear on the block, dealers resort to a host of crafty strategies. Sometimes the aim is bid to win, with the dealer able to afford to buy and either resell or hold a work. Other times dealers say they aim to be the underbidder—ensuring the piece sells above a reasonable threshold—but not stuck with the goods themselves. In another scenario, the dealer tries to “place” the work at auction. In this instance, certain collectors are called on. They are alerted to the upcoming sale and urged to buy.

One reason the works need to be protected is that contemporary art comes loaded with temptation. With the explosive rise in contemporary art prices, primary market prices are sometimes well below the auction price tag.

To read the full Art Newspaper article, click HERE.

Results: Sotheby's Contemporary

On Wednesday evening Sotheby's NY held its  evening contemporary sale.  The contemporary sector continues to show signs of traction and advancement after the declines of late 2008 and early 2009. The evening sale generated $189.9 million in sales, including buyers commissions.  This was against pre sale estimates of $114 million to $162 million. 53 lots were offered in the sale, with 50 selling, for a buy through rate of 94.3%. The top lot was a self portrait by Andy Warhol (see image), acrylic and silkscreen ink on canvas, 1986, selling to a private collector for $32.56 million against a pre sale estimate of $10 to $15 million. 7 of the top ten selling items from the sale went to private collections, with the other 3 noted as anonymous.

The two Contemporary Art day sessions held on Thursday totaled $53.4 million, making the two days worth of sales total over $243 million.

Sotheby's reported

Five new artist records were set and the sale was 94.3% sold by lot. Highlights
of the sale were Andy Warhol’s Self Portrait from 1986, which more than doubled the high estimate to sell for $32,562,500 (est. $10/15 million), and an Untitled Mark Rothko painting from 1961, which soared over the high estimate to sell for $31,442,500 (est. $18/25 million).

“When you sail past a high estimate of $162 million* and achieve $189 million, that is a great result,” commented Tobias Meyer, Worldwide Head of Contemporary Art and the evening’s auctioneer. “We are delighted to have achieved the top two lots of the week, which were of course the Warhol and the Rothko. On both of those objects you saw global bidding from a global community that will seek out trophies, and once found, will go full throttle.”

“It was interesting to see that there was a lot of movement in classic material -- Pollock, de Kooning, Mitchell – but there was also a lot of activity and great results for younger artists such Cattelan and Wool,” noted Alex Rotter, Head of the Contemporary Art Department in New York. “We’re thrilled with the overall result we achieved this evening, which was our best since spring 2008.”

“Sculpture was an important story tonight,” said Anthony Grant, International Senior Specialist of Contemporary Art. “Strong prices were achieved for Serra, de Kooning, Bourgeois, Koons, Flavin, Judd, Kapoor and Muñoz, among others. We saw collectors stretch for great masterpieces, willing to double and triple the estimate as was the case with Tuttle’s Silver Picture and Martin’s Kyrie, both of which were absolute gems.”

Results: Christie's Post War/Contemporary Art Sale

Christie's held its Post War Contemporary Art evening sale on Tuesday.  Within the sale were items from late author Michael Crichton collection including a Jasper John's Flag from 1966 (see image).  The Flag sold for $28.6 million including buyers premium, its pre sale estimated selling range was $10 - $15 million.

Not to go off track, but I do believe the upper end of the art market is acting as an additional investment opportunity as a store of value for wealthy investors and collectors. I just wrote an article for the Journal of Advanced Appraisal Studies on price anomalies, and one of the rationales for purchases far above the normal and expected value range on quality art was the expectations of it holding value and evening increasing in value over time and during times of economic turbulence. This strategy is now in play with modern works with the right provenance. I state in the article, "The key point is the wealthy, or HNWIs (high net worth individuals) are buying appreciable assets even in a difficult art market, and many are willing to pay a premium for the right property.  The combination of a desire to obtain property as an economic hedge, and the ability to pay over and above the accepted value range can cause price anomalies." The Journal is full of articles and content useful to appraisers. Order a copy of the journal at www.appraisaljournal.org.

Back to the Christie's sale, it sold a total of 74 lots, and offered 79 lots for sale for a 94% sell through rate.  Total sales were $231.9 million including buyers premium, with the top lot being the  John's Flag. The Crichton estate's offered 31 lots and sold for $93.3 million, this was against a $69.6 million high estimate. So again, quality and provenance of the collection pays off, over and above other lower quality and those from outside important collections. The Flag was sold to a US Dealer, so there is perhaps some additional upside on the property.

Kelly Crow of the Wall Street Journal reported on the sale:

The mood was chipper throughout the sale, with collectors like hedge-fund manager Steve Cohen and former superagent Michael Ovitz taking spots in skyboxes overlooking the auction house's crowded sales room, where others like entrepreneur Eli Broad and author Salman Rushdie took their seats. Two men on the front row wore ballcaps: fashion designer Marc Jacobs and fund manager John Angelo, who sits on rival Sotheby's board.

Yet the night unquestionably belonged to Jasper Johns, the artist from Georgia whose seminal series of late 1950s and 1960s depictions of flags, targets and alphabets represent some of the earliest examples of Pop art. Christie's sold eight of the artist's works for a combined $43.6 million, including the $4.1 million "Figure O."

The sale's other big winner was Andy Warhol, whose 1965 diptych of a lavender-faced Elizabeth Taylor, "Silver Liz," sold for $18.3 million, above its $15 million high estimate. Warhol's portraits of Hollywood starlets like Ms. Taylor or Marilyn Monroe are among his most coveted pieces, and at least four bidders competed for "Liz," with New York dealer Dominique Levy getting it.

To read the full WSJ article, click HERE.

NY Impressionist and Modern Sales Review

Colin Gleadell of the UK's Telegraph has a very good recap and analysis of the recent NY impressionist and modern sales at Sotheby's and Christie's.  Gleadell notes the sales were strong in some areas, not so strong in others, and still below the peak of Nov 2006 of nearly $850 million in sales.  He does state that sales were up 150% over the 2009 sales.

Gleadell states that once the Brody collection was sold (which set a record for a single owner sale in NY at $226 million, and second to the YSL sale of $443 million internationally), the rest of the Christie's sale suffered with high buy in rates and little interest. Sotheby's on the other hand had no featured collections, but still seems to have come out with a stronger selection of art for collectors.

Gleadell reports

The six most expensive works, all by either Picasso or Giacometti, had been secured for sale with the guarantee that they would be bought by third parties for a minimum, undisclosed price. In four cases, prices exceeded estimates and together they realised $161 million, almost half the value of Christie’s main, 69-lot sale. The only 19th-century work to shine was a more conventional, realist depiction of absinthe drinkers by Jean-François Raffaelli, which sold to the Fine Arts Museum of San Francisco for a quadruple-estimate record $3 million.

While the Brody collection was 100 per cent sold, Christie’s came down to earth in a mixed-owner sale in which more than one third of lots went unsold. Among these was a trio of sub-standard works by the racy Fauvist painter Kees van Dongen which carried over-optimistic, boom-time estimates in the millions; and Fertility, one of Edvard Munch’s less desirable bucolic scenes, on which Christie’s had rashly placed a potentially record-breaking estimate of up to $35 million.

Although Sotheby’s had no big single-owner collection to sell, it did better than Christie’s with works from various sources, finding buyers for all but seven of 57 lots.

Asian buying was to the fore, emphasising the global nature of this market, with a Modigliani portrait going to a Japanese buyer for $13.8 million, and an atmospheric landscape by Monet heading east for $15 million. One Chinese buyer bought an early Impressionist view of the Seine by Monet for $6.2 million, and also paid a record $5.7 million for an early Surrealist landscape, Spectre du Soir sur la Plage, by Dalí.

To read the full Telegraph article, click HERE.

Salander Decorative Arts Sold at Auction

I reported a short while ago that personal property taken from art dealer Lawrence Salander would be auctioned by Stair Galleries. The property included oriental rugs, furniture and some miscellaneous items. The 250 lot sale was held to reimburse those who Salander stole from, the total of which was $120 million.

According to Stair Galleries the sale was strong, bringing solid prices, and totaled $472,067.00. This included a Gothic Revival Breakfront, which sold for $22,000.00 (see image). A far cry from the $120 million Salander admitted he stole from clients and creditors. Stair will hold a second auction in July with contents from a second Salander home.  The New York City townhouse is on the market for $14.25, down from $25 million, and there is supposedly a contract on the home.

Philip Boroff  reports for Bloomberg

‘Very Successful’

“In this economy I think it was very successful,” said Stair, after the sale. Just a pair of items didn’t sell, he said.

Stair took what he could get for other items, including $25 for a pink pottery basin and $50 for a backless day bed that had a low estimate of $400.

Salander’s 9,200-square-foot seven-bedroom townhouse, with two kitchens and an elevator, recently found a buyer after two years on the market. It’s advertised at $14.25 million after being originally listed for $25 million in early 2008.

Broker Lydia Rosengarten of Leslie J. Garfield & Co. wouldn’t disclose the townhouse’s price or buyer and said she expected the purchase to close this month.

Second Home

Stair said he’s planning an auction for the U.S. Bankruptcy Court in July for the contents of Salander’s second home, a 66-acre property in Millbrook, New York, which is also on the market. Thomas Genova, a lawyer who is the trustee overseeing Salander’s personal bankruptcy, said the dealer is now living in an apartment in Millbrook.

Charles Ross, Salander’s criminal lawyer, declined to comment after the sale.

In May 2008, New York’s Tepper Galleries LLC sold almost 300 antique carpets from the Salander-O’Reilly LLC, raising about $250,000.

To read the full article, click HERE.

Sotheby's Sees Small 1st Quarter Loss

Philip Boroff writing for Bloomberg reports that Sotheby's first quarter 2010 results are greatly improved from a year ago, although the auction house still had a net loss. Boroff reports that sales were up while costs were reduced. The trend is positive and although Sotheby's bettered expectations for its loss, the expectations were that revenue would be higher than what was recorded. Overall, the first quarter loss was $2.1 million, compared to a loss of $34.5 million in the first quarter of 2009. Revenue increased 87% from last year to $101.9 million. Boroff notes that the 1st and 3rd quarters typically show a small loss, while the 2nd and 4th quarters draw the most revenue.

Boroff reports

Sotheby’s, the world’s top publicly traded auction company, said its first-quarter loss narrowed after sales rose and it cut costs.

The New York company lost $2.1 million, or 3 cents a share, compared with $34.5 million, or 53 cents, a year earlier. Revenue increased 87 percent to $101.9 million.

The results exceeded forecasts for earnings and fell short on revenue. Analysts surveyed by Bloomberg forecast an average loss of 19 cents a share. They had estimated revenue of $105 million.

“The renewed art-market momentum that began last autumn continued into the first quarter,” Chief Executive William Ruprecht said today in an e-mailed statement.

Sotheby’s cited the “absence of certain expenses in 2010 that were incurred in 2009,” without being specific. It also cut staff by 19 percent, or 315 employees, to 1,323 at the end of 2009, as the art market declined, according to a prior filing.

Its shares have more than quadrupled since March 2009 amid signs that the auction market is rebounding. Sotheby’s shares fell 55 cents to $34.42 as of 10:41 a.m. in New York Stock Exchange trading.

To  read the full Bloomberg article, click HERE.

ASA's Opens Registration for International Appraisers Conference

ASA's 2010 International Appraisers Conference

  

Registration Now Open!

Attention valuation professionals: registration is now open for ASA's 2010 International Appraisers Conference! Come and be a part of unparalleled opportunities to network, innovate and learn. With all new, exciting education programs focused on the latest industry trends, the 2010 conference spotlights the future of the industry and how you can gain the competitive edge. This year's conference will be held at the JW Marriott Resort Hotel in Las Vegas, NV July 25-28, 2010.

A few highlights of this year's conference include:

• 1/2-day Multidiscipline General Session with Key Industry Speakers
• Enhanced Networking Opportunities
• World renowned hotel - JW Marriott Las Vegas Resort & Spa Mention ASIASIA to receive discounted rates.
• FREE Shuttle to and from the Las Vegas strip
• Variety of local attractions

ASA's 2010 Conference promises to be our most exciting conference yet, with cutting edge workshops, more networking opporunities and a special Gala Reception and Dinner. There are numerous ways to get involved with this year's conference - you don't want to miss out. Click here to view endless opportunities.

So, whether you are an experienced valuation professional or just getting into the appraisal business, the 2010 Appraisers Conference is the one event you won't want to miss!

Click here to register now! 

~ Hurry! Early registration ends June 14. ~