Masterpiece Fair

The news is mixed for the new Masterpiece antiques and art fair in London.  Considered by many to be the replacement fair for the long running but now ended Grosvenor House Fair, the new fair has been very well received and attended, with the additional bonus of some strong buying.  Many accounts state there have been a mix of high end purchases, including some early English furniture, but most of the sales seem to be in the contemporary or modern art sector.

There is also some very positive feedback from the dealers about how the show set up and the overall display is better than the cramped quarters at Grosvenor.  Contemporary art, including English art appears to have the most appeal with the buying public at the new show.  Not that anything is wrong with that, but from a personal interest stand point I would like to hear and see more positives about antique furniture.

Judd Tilly reviews at ArtInfo, click HERE to read a review of the new show, and Colin Gleadel of the Telegraph gives a review as the showing was going on, click HERE to read.

Gleadel reports

While sales in six figures for antique furniture and classic cars have been made, modern art appears to have been the best seller. Several galleries specialising in modern British art have made substantial sales, with a painting by Oscar Kokoschka selling for one million pounds.

A student work with distinct gardening appeal by the popular artist and designer, Edward Bawden (1903 - 1989), has been acquired by the Cecil Higgins Art Gallery and Bedford Museum for its collection.

’A General Guide to the Royal Botanical Gardens, Kew, 1923’, is an unpublished manuscript with 23 pages of exquisite coloured drawings made by Bawden when he was at the Royal College of Art and influenced by Aubrey Beardsley, which he gave to his friend, the artist, Eric Ravilious, describing it as ’My First Book.’

Acquired for £30,000 through the Fine Art Society, and with financial assistance from the Art Fund charity and the V&A Museum, it joins a collection of nearly 3,000 Bawden items, many of which were left to the Museum by Bawden before he died.

Interesting Exhibition

The British National Gallery has an interesting exhibition on the mysteries of some of fakes and attribution errors made over the years from art in its collection.

Click HERE to visit YouTube to watch or visit the AW Blog and to watch.

Results: Sotheby's London Evening Contemporary Art Auction

Sotheby's just completed its London evening contemporary art sale, totaling $61.8 million. This fell well within the pre sale auction estimate of $57.2 million to $79.5 million. The sale offered a total of 53 lots with 44 selling for a very respectable 83% buy through rate. Kelly Crow of the Wall Street Journal reported that 11 lots each sold from a single bid, meaning there was little competition from the room. The top selling lot was an Yves Klein, selling for $9.32 million.

It is my opinion the sale was decent and fell within expectations. Yet we have recently become so used to at least a few items or lots breaking away from the pre sale estimates, that it is almost disappointing when there is not the stand out item or two within a sale. Have we become too spoiled at the top end of the art market?

Sotheby's is stating

Commenting on the sale tonight, Cheyenne Westphal, Sotheby’s Chairman Contemporary Art Europe, said: “We assembled the auction with a focus on classic works from the 1950s and 1960s by blue-chip artists and carefully considered quality, provenance and pricing. Tonight’s solid results, well above the June 2009 total, build on the recent successes of New York and London and affirm the strength and trajectory of the market for Contemporary Art and the renewed confidence from both buyers and sellers alike. Blue-chip artists, such as Klein, Fontana, Richter, Auerbach and Warhol led the way tonight and we established an average sold lot value of £933,904 – the strongest at Sotheby’s London since July 2008.”

Discussing the results of the British Art collection Oliver Barker, Senior Director and Senior International Specialist, said: “We are pleased with the results overall tonight, in particular the British and School of London Art which triumphed and saw the works in this field from a private collection total £4,256,750, near the high estimate for the group. Frank Auerbach’s ‘Mornington Crescent – Summer Morning’ led the group, selling for £2.2 million - a new record for the artist in GBP - which means Sotheby’s has now established four of the top five prices for the artist at auction. These results further consolidate Sotheby’s strength in the field of British Art.”

Headlining the sale was Yves Klein’s work, RE 49, Relief Eponge Bleu, which saw competition from four bidders for around three minutes and sold for £6,201,250 (est. £4.5-6.5 million). The work was created at the height of the artist’s career and came to auction from the collection of HypoVereinsbank. The proceeds of the sale of this work - one of only a small number of large-scale blue Relief Eponge to have remained in private hands - will enable the bank to carry out future art-related and cultural projects. Further works by Yves Klein to sell well this evening included his gold leaf of panel, MG42, which fetched £481,250 ($732,848 / €586,886) above the pre-sale estimate of £200,000-300,000, almost six times the price the work sold for (£80,500) when it last appeared at auction, in June 2000; and the artist’s fire painting F124, which sold for £914,850 ($1,376,026 / €1,115,663) against an estimate of £800,000-1,200,000.

Commanding £3,737,250 ($5,621,198 / €4,557,592), against an estimate of £3.5-4.5 million, Gerhard Richter’s monumental (145 by 200cm) oil on canvas Neger (Nuba), highlighted the works in the sale by the German artist. The painting, which achieved a sum over 12 times what it realised in 1995 (£298,500), is a masterpiece of Richter’s groundbreaking photopainting of the 1960s and is exceptional for its very early execution date, impressive scale (at two metres across), exquisite execution, and its extraordinary re-presentation of subject matter. The artist’s oil on canvas Abstraktes Bild (100 by 90cm) sold within estimate (est. £1-1.5 million) for £1,161,250 ($1,746,636 /€1,416,149).

Contemporary Art Survey

ArTactic has released its June Contemporary Art Survey.  Even though confidence levels are higher for the Contemporary sector than at the end of 2009, the indicators are not good due to the unsettled nature of the world economy. Most responding to the survey believe the economy and its recovery as a major factor effecting investment risk in the contemporary sector.

The ArTactic website states

Confidence level up, but fears about the economy increase

The latest reading of 61 is marginally higher (+4.2%) than the last reading in December 2009. However, the recent result also shows signs of increasing concerns over the outlook for the US and European economies and the impact that this could potentially have on the art market.

HIGHLIGHTS:

- The overall Contemporary Art Market Confidence level sees a marginal positive increase of 4.2% from December 2009.
- The Economic component of the Confidence Indicator drops 18.1% between December 2009 and June 2010.
- Risk Barometer jumps 22% on heightened fear of the sustainability of the art market recovery, but barometer is still 20% below the peak reached in November 2008.
- 69% of the respondents see the economic recovery as the single biggest risk to the current art market.
- 55% of the respondents believe the market direction will be flat over the next 6 months. 31% believe the market will continue to go up, and 14% believe the market will fall.

The full report is available for purchase on the ArTactic site, click HERE for more information.

Concerns Over Contemporary Art

Scott Reyburn writing for Bloomberg reports that art reaseach firm ArtTactic has sent out warning signs in a recent report about the sustainability of contemporary art prices. The report was issued just as some major contemporary art are coming up for sale in London.  This includes works by Andy Warhol and Damien Hirst. This outlooks is change from just a few short months, or even weeks ago.  It shows have fast the art market can change in unsettled economic times.

Reyburn reports

The survey’s Risk Barometer jumped 22 percent on concerns over the short-term economic outlook. Fifty-five percent of 138 contemporary-art collectors and professionals see little improvement over the next six months, ArtTactic said, though overall confidence was 4.2 percent higher than in December 2009.

“The recovery of the art market is on,” Anders Petterson, founder and managing director of ArtTactic, said in an interview. “Economic realities look as though they’re going to slow that recovery. This is going to be a tough five years going forward and wealthy collectors aren’t oblivious to what’s happening.”

Trophy works at Sotheby’s and Christie’s International’s evening sales of Impressionist and modern art last week struggled to realize expectations that were raised by recent auction records for Alberto Giacometti, Pablo Picasso and Amedeo Modigliani.

An Edouard Manet self portrait fell to a single bid of 22.4 million pounds at Sotheby’s on June 22. At Christie’s the following evening, a ‘Blue Period’ Picasso sold within estimate for 34.8 million pounds and a Claude Monet water lily painting, valued as much as 40 million pounds, failed. There was less buying from clients in the emerging economies, both auction houses said after their sales.

Fewer Asian Bids

“There was some activity from Asia, but it was mostly bottom-fishing,” the Paris-based dealer Christian Ogier, who specializes in 20th century Chinese art. “It was very surprising. There was a lot of Asian bidding in New York in May,” said Ogier, who was monitoring the telephone bids taken by Sotheby’s and Christie’s Hong Kong-based specialists at the London sales.

To read the full Bloomberg article, click HERE.

20th Century Design

I posted earlier on the AW Blog about the lackluster sales of Phillips 20th century design auction, within that post I also mentioned I was picking up signals of the sector starting to cool off (click HERE to read the post). The Art Newspaper has an article stating the 20th Century design market in June has been very mixed, with some poor sales, including Design Miami Basel, a poor sale at Wrights in Chicago, the poor Phillips and Sotheby's sale (sales were good, but were saved by Tiffany glass) to be followed by a decent sale later in the month as Wrights.

As appraisers, it is our responsibility to follow market trends and to be aware of demand.Market analysis is a large part of what we do, so this article and some of the less than expected sales in 20th century design certainly are starting to add up to signs of slowing market sector.

The Art Newspaper reports

Collectors holding out for the tenth annual Design Miami Basel featuring the cream of the crop offerings made for slack results at the early June round of 20th-century design auctions.

The softening of sales set in as early as the Windy City Wright 8 June auction. At that sale, Wright hammered down $1,838,271 (est $3m-$4.3m) with 56.7% sold by lot and 50.4% sold by value.

Even so, a Le Corbusier concrete light fixture from Chandigarh Zoo, 1960 made $36,500 ($20,000-$25,000). But a cache of Pierre Jeanneret furniture had weak results with a Chandigarh library table, 1960 (est $100,000-$120,000) passing.

Then Phillips, de Pury & Company 9 June auction brought in $4.9m (est $5.2m-$7.4m). Sell rates were 67 percent by lot and 72 percent by value. Particularly telling was the cover lot, Marc Newson’s aluminum Pod of drawers, 1987 from the Halsey Minor collection going to an anonymous telephone bidder in a near empty auction room for $350,000 ($300,000-$500,000). Too much Newson was on the market. Surprisingly vessels by English ceramicists Lucie Rie and Hans Coper sparked strong prices. Rie's hand wrought Large Bowl (est. $14,000-18,000) jumped to $74,500.

To read the full article, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies - 2010

It is time for another of my now weekly series of publishing an excerpt from the Journal of Advanced Appraisal Studies - 2010.  This weeks excerpt, as I make my way through the journal from article 1 to article 18 is entitled Value Anomalies.

This article is my contribution to the Journal.  I have always been interested in value and how both the social sciences and appraisers analyze, process and explain values which far exceed exceptions.  These auction price anomalies are not just values above the high auction estimate, but multiples.  Within the article I look at definitions, price/cost versus value, rationalizations of value such as the veblen effect, nostalgia and market trends, efficient market hypothesis, buy and hold strategies for wealth and five examples, including Philadelphia tea tables, Philadelphia stools, NY silver punch bowl, dragon chair and the Walking Man.

All proceeds from the sale of the Journal support the educational initiatives and scholarships of the Foundation for Appraisal Education. The cost of the journal is only $55.00, a bargain for the amount of content supplied, and for a short time shipping is free.  For more information visit www.appraisaljournal.org to order your copy.

Next week attorney Mark Gold looks at museum deaccessioning. This is a very timely article, as many museums and historical societies debate on how best to raise funds for operations and still fulfill their public mission and responsibilities.

An anomaly is usually defined as a deviation or departure from the
normal or common order, form, or rule. A market anomaly can be defined as a price distortion within a financial or economic market. Price anomalies are sizable sale differences realized between what an item is expected to sell for at a specific point in time versus the final sales results. This may include items selling for far more or far less than what is typically considered to be within a fair value range for the object. Theses anomalies are observable by reviewing databases of past auction property performance and pre-sale estimates and comparing the difference to the normal or pre-sale auction range. A price anomaly is not a cataloging or identification error but a seismic shift in price over what was previously considered a fair value range by many experts, appraisers, auction house specialists and connoisseurs.

As appraisers, we are taught to be skeptical and cautious when looking at auction pre-sale estimates, and with good cause. Auction houses have a tendency to adjust estimates to manipulate market interest. In manipulating pre-sale price estimates an auction house can increase or reduce sale interest while maximizing and refining expectations. By definition, a price anomaly goes beyond the normal range of expected or desired fluctuations and potential auction house manipulations. I am not referring to relatively small price fluctuations over a single standard deviation or two or a simple divergence from an expected value range based upon a few additional bid increments but fluctuations on a large and dynamic scale. Price anomalies are also not influenced over time where tastes, collecting habits and the economy might change and have an impact on value. These anomalies occur with no real substantive explanation for the sudden spike in price. For instance, what causes fine or decorative arts to sell at auction by millions or tens of millions of dollars and at multiples over legitimate pre-sale estimates? This phenomenon occurs with knowledgeable buyers and experienced collectors, all holding commonly known and referenced information. This includes connoisseurship for quality, scientific testing opportunities, quality/condition evaluations, provenance, and past sales results for similar items. As appraisers, we look to assign value to property based upon research of the pertinent market and comparable property. When price anomalies occur, it not only complicates proper appraisal development but might at times have a tendency to potentially obscure and add ambiguities to what represents true value. The appraiser, therefore, needs to know when to consider, properly identify and how or even if to effectively use the price anomaly when developing an appraisal value conclusion.

As appraisers, how do we explain these price anomalies and how do we attempt to justify the differences in price, value, expected price estimates and consummated price? I will try to address these questions even though at times there are no conclusive answers. Before getting into the specific cases, a brief discussion of value and effects on value is necessary.

Update: Estate Tax (Must Read for Appraisers)

I stated in previous posts that I would try to stay on top of any new estate tax law legislation. As I mentioned in earlier AW posts about upcoming estate tax legislation, that given the delay and the failure to pass, move or openly discuss estate tax legislation legislation we might be looking at higher estate tax rates. 

The Hill is reporting that a bill is being introduced by Senator Bernie Sanders of Vermont that would be retro-active to 2010 and set rates at the 2009 levels ($3.5 million exemption, and 45% tax above the exemption).  The Sanders proposal increases to a 50 percent tax on estates worth between $10 million and $50 million, 55% tax above $50 million, and estates with assets totaling at least $500 million would be taxed at 65 percent rate.

The Hill states the bill may be voted on as soon as next week. If passed by the Senate, the bill would have to be reconciled with the House bill.  Stay tuned.

The full article from the Hill is short, so I am posting in its entirety.

Sen. Bernie Sanders (I-Vt.) on Thursday introduced legislation reinstating the estate tax at 2009 levels for almost everyone but the super wealthy.

The bill levies a 45 percent tax on estates worth more than $3.5 million ($7 million for couples), but slaps a 50 percent tax on estates worth between $10 million and $50 million. Estates worth more than $50 million would incur a 55 percent tax, and estates with assets totaling at least $500 million would be taxed at 65 percent rate.

If enacted, the changes would be retroactive to the beginning of the year, when the estate tax repeal took effect.

Lee Farris, estate tax policy coordinator for United for a Fair Economy, a group that represents high-wealth individuals, supports the bill.

"This is the kind of commonsense solution that balances the desire to protect small businesses and farms, while ensuring that the super-wealthy give back to support the country that made their prosperity possible," she said in prepared remarks.

The fate of the estate tax is expected to be debated when the Senate acts on legislation providing tax relief and loan opportunities to small business. Votes on the bill are expected next week.

Farris plans to mobilize her members into supporting the legislation and seek co-sponsors for the bill. Sens. Tom Harkin (D-Iowa) and Sheldon Whitehouse (D-R.I.) sponsored the bill with Sanders.

Wealthy Spending Money - Charities See Less

I dont think it will come as a surprise to many AW Blog readers that the truly wealthy have been and continue to spend money on luxury items. We have seen it in some of the prices paid for the best fine art available, and we also have seen it in the form of luxury item purchases, from watches, to art to jets and yachts.

Katya Kazakina has an interesting article in Bloomberg on the spending habits of the wealthy. She notes they are hedging against inflation by buying tangible property such as luxury items and art. The interesting aspect of the article is the statement they are actually giving less to charity.

Kazakina states

Most individuals with assets ranging from $1 million to $5 million, excluding primary residences, had 30 percent in luxury collectibles in 2009, up from 27 percent in 2008.

‘I Have Arrived’

“These are status symbols you can overtly show,” Van der Linde said. “They say, ‘I have arrived.’”

For those with more than $30 million in investments, art was the largest of the six passions, the report said.

More investors began adding art, coins, wine and antiques to their portfolios. Investors in India, China and the Middle East tend to hold art and other tangible assets as an inflation hedge, the report said.

“In emerging economies, art has been part of the overall investment portfolio for a while,” said Van der Linde. “Now you are starting to see the same trend in the mature markets.”

The annual wealth survey covered 71 countries and drew on interviews with 1,200 wealth managers who serve 150,000 clients. There were many regional differences in spending trends.

American and Japanese millionaires spent the most on luxury collectibles. Europeans and Latin Americans put more emphasis on art. The rich in the Middle East and Asia focused on jewelry, gems and watches, according to the study.

Giving Less

Philanthropy was another area where the wealthy have become more focused and cautious in the aftermath of the financial crisis, Van der Linde said. In the U.S., total charitable contributions fell 3.6 percent in 2009 to $303.75 billion from $315.08 billion in 2008, according to Giving USA Foundation.

To read the full Bloomberg article, click HERE.

Update: Salander Dodges Jail...For Now

The New York Post and other outlets are reporting that discredited art dealer Lawrence Salander will not immediately be going to jail. The prosecution wanted him jailed for failure to repay those he defrauded of an admitted $120 million. The judge thought better to wait until at least August to sentence Salander. Salander could be sentenced up to six years in prison.

The NY Post reports

The judge's generosity followed a prosecutor's nearly half-hour long listing of Salander's broken promises to the court in the three months since he pleaded guilty to a massive, decade-long swindle that rocked the East Coast art world.

Among his victims were John MacEnroe, who lost a $2 million investment in two of Salander's Arshile Gorky paintings back in 2005, and Robert De Niro, who lost two paintings valued at a total $77,000, entrusted to Salander by the actor's father, a noted abstract painter.

Salander is still swindling, still working his Ponzi scheme, complained prosecutor Micki Shulman.

He'd convinced the judge to let him remain free so he could lean on friends for cash, go to rehab, assist in the bankruptcy proceedings against him and help his victims find the paintings he'd sold out from under them, Schulman.

Instead, he hasn't even come up with a plan to pay any of the money back, the prosecutor complained. He's been of no help in bankruptcy proceedings, welched on his only appointment to meet with a victim, and has now declared himself too sober for rehab, she complained.

To read the full NY Post article, click HERE.

Results: Christie's London Impressionist and Modern Art

Even with some truly excellent examples of art in the sale, the results in London remain below expectations.  I am not sure if there is a bit of a cooling off period from sales held earlier this year or not, but by all accounts the London sales have not been overly impressive.  In fact a Monet Water Lilly painting 9see image) did not meet the reserve and was bought in.  The high bid was $43.5 million, just under the low end of the estimate which was $45 - $60 million.

The Christie's sale did total a record for a London art auction with sales of $226.5 million.  There were 63 lots offered, with 47 selling for a buy through rate of 75% which is respectable.  The top lot was the Pablo Picasso, from his blue period which sold of $51.6 million including buyers premium. It was estimated to sell between $46 and $60 million. Buyer breakdown by lot and by origin was 55% Europe, 40% Americas and 5% Asia. Some of the numbers were good, but there does not seem to be a break-out sale for multiples of the estimate.  We have seen that happen with regularity earlier in the year, but the pace has now slowed, and expectations must again be constrained.

Carol Vogel of the NY Times reports

Theories about the tempered bidding abounded. “A sense of reality has entered the market,” said Thomas Gibson, a London dealer. “You cannot bully people into paying huge sums just by putting huge estimates on a picture.”

Dino Zevi, a dealer based in St. Moritz, Switzerland, seemed surprised by the Monet’s failure to sell: “With all the publicity it had, there is no reason why it did not.”

Still, Mr. Zevi added, although the market is clearly “stronger than it used to be, collectors are picky and there is a price resistance.” And he considered the baleful Picasso portrait “a tough picture” to sell: “People these days are looking for attractive images. It would have been a struggle anywhere it was sold.”

Edward Dolman, Christie’s chief executive, said after the sale that “general economic conditions have changed” in recent months because of issues like the euro crisis, the Deepwater Horizon spill and widespread governmental belt-tightening. “There’s been a reduction in confidence,” he said. “People were simply expecting too much.”

The most talked-about artwork on offer in the current London auction season, the Picasso became well-known in 1995 when the composer Andrew Lloyd Webber bought it at Sotheby’s in New York for $29.1 million. Before that it had belonged to the New York collectors Donald and Jean Stralem for nearly 50 years.

To read the full NY Times article, click HERE.

Christie's stated about the sale

Giovanna Bertazzoni, Director and Head of Impressionist and Modern Art, Christie’s London: “Global bidders competed at this evening’s auction and demonstrated that the art market continues to attract significant levels of spending, particularly for the rarest and most exceptional works of art. We are particularly pleased that Picasso’s portrait of Angel Fernández de Soto realized over £34 million with proceeds to benefit arts culture and heritage in the UK, and that for the first time an auction in London has broken the £150 million barrier.”

The top price was paid for Portrait of Angel Fernández de Soto, 1903, a Blue Period masterpiece by Pablo Picasso (1881-1973), which sold for £34,761,250 / $51,585,695 / €41,922,068. Offered at auction by The Andrew Lloyd Webber Foundation, a charity which focuses on the promotion of arts, culture and heritage in Britain, it was acquired by an anonymous telephone bidder. It had been acquired by the Foundation at auction in New York in May 1995 for $29,152,500.

Results: Sotheby's London Impressionist & Modern Evening Sale

First, please accept my apologies for misspelling Edouard Manet's name in the title of yesterdays post.  As many readers of the AW Blog know, I am a bit of a dyslexic typist, and I also have a hard time seeing my errors, and I also miss some of the spell check signals, especially when text is mixed with some HTML code.  Occasionally I  rush to get a post up and fail to proof at all, I just type it and hit publish.  In any event, please dont hold my typing and spell checking against and me, and I hope you find the blog worthwhile.

Now, on to the Sotheby's London Evening Sales results.  I  believe pre sale expectations were higher for this sale than the actual results.  Yes, as I posted yesterday, the Manet sold for a record price, but it just crossed the low end of the estimate including buyers premium at $33.1 million.  Interesting comment in Carol Vogel's NY Times piece stating the Manet just crossing the low estimate lowered enthusiasm for the rest of the sale (see her commentary below). The sale offered 51 lots, and only 35 sold for a sell through rate of only 68.6%.  Given the success of earlier sales, I think many thought the sale would be stronger.  It totaled $165.3 million. The sale did fall within the pre sale estimates of $148.4 million to $217.5 million, and given the high bought in rate, those items that sold, did well, yet many items did not and the sale did not continue with the strength seen earlier in the year.

Sothebys stated

Tonight’s much-anticipated sale of Impressionist and Modern Art at Sotheby’s in London brought a within-estimate total of £112,101,350 / $165,282,230 / €134,409,672. Three works sold for more than £10 million, only the second time
this has happened in London auction history1: Edouard Manet’s museum-quality masterpiece.

Self Portrait with a Palette sold for £22,441,250 ($33,087,379 / €26,907,089), setting a new auction record for the artist; André Derain’s Arbres à Collioure, from the Vollard trove, made £16,281,250 ($24,005,075/€19,521,241), double the previous record for the artist and a record for any Fauve painting at auction; and Henri Matisse’s Odalisques jouant aux dames brought £11,801,250 /$17,399,763 / €14,149,715. The sale attracted buyers from no fewer than 13 countries; of the lots sold, over 50% achieved prices in excess of the high estimate; and the average lot value for the works sold reached an exceptional £3.2 million. The sum achieved
tonight brings the total of Impressionist & Modern Art sold by Sotheby’s London so far in 2010 to an unprecedented £276 million.

Commenting on tonight’s sale, Melanie Clore, Co-Chairman of Impressionist & Modern Art, Sotheby’s Worldwide, said: “The strong results achieved this evening demonstrate the strength of the international demand for top-quality works. To sell three works for over £10 million – for the second time in our sales in London in the last six months - is testimony not only to the vitality of the Impressionist and Modern Art market but also to the pivotal role that London plays within the
international auction market.”

Carol Vogel summed the sale up in the title of her NY Times review, A Lackluster Art Auction in London. Vogel states

Given the high prices paid at auction in recent months, the painting — one of only two self-portraits painted by the French master, which Sotheby’s had been heavily promoting — had been hoped to fetch as much as $43.4 million. Instead, it seemed for several tense moments on the verge of not selling at all, as Henry Wyndham, the chairman of Sotheby’s Europe and the evening’s auctioneer, started bidding to a hushed salesroom. Finally, when he reached 20 million pounds, or $29.48 million, Franck Giraud, a private dealer based in New York, made what seemed like the only offer. After the sale, Mr. Giraud declined to say for whom he was bidding.

“The Manet put a damper on the evening,” said Richard L. Feigen, another New York dealer, adding that the painting was not well suited to being sold at auction. “It was a great picture, but he’s not an auction artist,” Mr. Feigen said; the work was too intellectual to have the commercial appeal of paintings and sculptures by Picasso, Giacometti and Modigliani that have brought record-breaking prices over the last few months. (Nevertheless, the self-portrait did manage to set a record for Manet at auction, beating the $26.4 million paid for another painting by the artist at Christie’s in New York in 1989.)

To read the NY Times article, click HERE.

Edouard Manet Auction Record

Sotheby's offered up hedge fund manager and art collector Steve Cohen's Self Portrait with a Palette by Edouard Manet. The self portrait for sold for a record price of $33.2 million against an estimate of $29 to $44.5 million.  It just passed the low estimate including a buyers premium, and was enough to set a new record for a painting by Manet.  The previous high for a Manet was paid at a Chirstie's sale in 1989 and sold for $26.4 million.

A Picasso from the Blue Period will soon be on the block block at Christie's with an estimate of near $60 million.  The data and results from the London sales are just starting to come in, I will post more information on the sales when the houses release the final results of the sale.  Expectations are the London impressionist and modern sales will total over $500 million.

Bloomberg reported on the Manet

Two weeks of evening sales of Impressionist and contemporary works at Sotheby’s, Christie’s International and Phillips de Pury & Co. carry an estimate of 350 million pounds, more than three times last year’s total low estimate.

“It’s a great Manet,” New York art dealer Christophe van de Weghe said in an interview at the sale. “Many museums would like to have this picture. It was a good buy at the low estimate.”

The 1878 painting, showing Manet dressed as a Parisian dandy, rather than as a working artist, is a well-known highlight of the art collection formed by Steven A. Cohen, founder of SAC Capital Advisors LP. Cohen paid $18.7 million for the painting at Christie’s International’s 1997 auction of the collection of the Wall Street financier John Loeb. The seller wasn’t named by Sotheby’s.

The previous highest price paid for the French artist was $26.4 million, for the 1878 street scene “La rue Mosnier aux drapeaux” at Christie’s in New York in November 1989.

To read the full Bloomberg report, click HERE.

Results: Sotheby's Polaroid Photographs

Results are in for the for the Polaroid Collection sale.  The sale was very strong, and results are above the pre sale estimates, at least for session from June 21, which is the only session I have complete data on.  All sessions totaled so far have totaled $11.64 million, and I dont think the final session which started about an hour ago has yet to finish as I write this post.

Session one was estimate to sell for between $2.9 and $4.5 million, it brought $7.2 million, with 100% of the 100 lots selling. That is correct, all of the 100 lots in session one sold.  The estimate for the entire sale was $6.9 to $10.7 million, so session has passed the low estimate for the entire sale.  There are over 300 additional lots from the subsequent sessions. Numerous records were set, along with three session selling on Tuesday.

Sotheby's stated about session one:

Competition was fierce with a full salesroom competing against numerous telephones resulting in as many as ten different bidders vying for certain works. The sale was 100% sold with nearly 87% of the lots achieving prices at or above their estimates. Artist records were set for Ansel Adams and Lucas Samaras, in addition to records for photographs at auction by Chuck Close, Andy Warhol, Robert Rauschenberg and David Hockney, among others.

Highlighting the evening session were works by Edwin Land’s great friend and collaborator, Ansel Adams. His iconic mural-sized prints achieved the top five prices of tonight’s offering, led by Clearing Winter Storm, Yosemite National Park, which sold for $722,500 after a battle between four different bidders. That price
was well-above the high estimate and a record for the artist at auction (lot 100, est. $300/500,000).

Adams’ Moonrise, Hernandez, New Mexico sold for $518,500 (lot 94, est. $300/500,000); Aspens, Northern New Mexico was the subject of a battle between a bidder in the room and one over the telephone, finally selling to a client on the phone for $494,500 (lot 88, est. $150/250,000); Winter Sunrise, Sierra Nevada, from Lone Pine, California achieved $482,500 (lot 97, est. $300/500,000); The Tetons and Snake River, Grand Teton National Park, Wyoming sold for $350,500 (lot 91, est. $250/350,000).

Christie's and Sotheby's Videos

As video becomes easier to stream, both Sotheby's and Christie's have been taking advantage of the technology and are posting both pre and post sale videos. As I have mentioned in past post here on the Appraisers Post blog and other online sites, it is important to coordinate all online media.  This includes websites, blogs, videos, phone apps and social media such as Facebook.  It appears that both Sotheby's and Christie's are embracing and using the new technology to promote interest and sales.  Dealers, auctioneers and appraisers should take note.

Christie's recently posted a video on the upcoming London sales.The Christie's website states of the video

Christie's specialists preview the exciting Spring auction season in London including highlights from the Impressionist/Modern Art, Post-War & Contemporary Art, Old Masters & Nineteenth Century Art, and Spencer House Sales. Featured in this video are Jussi Pylkkanen, President of Christie's Europe, Chairman, Impressionist & Modern Art Department, Richard Knight, International Director Christie's, Co-Head of Old Masters and Nineteenth Century Art and Orlando Rock, Deputy Chairman of Christie's Europe, Department Head, Private Collections & Country House Sales.

Click HERE to view the Christie's preview of the London 2010 sales.

Sotheby's has released a video on their upcoming London Impressionist and Modern sales. Click HERE to view the Sotheby's video.

Private Collectors Driving the Art Market

Scott Reyburn has a very interesting piece in Bloomberg on how private collectors are now driving the art market, and not dealers and museums.  He discusses the strengths of market at the top end where trophy art above $1 million is sold, and what is called the no mans land, or the now suffering middle market. This is really nothing new, as we have seen over the past year or so where the top end of the market has flourished with numerous record prices while most everything in the tiers below have struggled and suffered.

Reyburn is reporting from the perspective of collector Adam Lindemann who he interviewed at Art Basel. It is a very interesting article to read from a market perspective.

Reyburn reports

“The value of art has changed forever. It’s never going to go back,” the New York-based collector and writer said in an interview at Art Basel in Switzerland. Lindemann is one of the thousands of collectors visiting the world’s largest fair of modern and contemporary works.

“The market has split. It’s bipolar,” said Lindemann. “There’s no middle market money any more. There’s the affordable stuff, and there’s a top tier of trophy works priced at $1 million up. Anything in between is in no man’s land.”

“Power” collectors such as Don and Mera Rubell, Dakis Joannou and Francois Pinault have changed the art market during the last decade, Lindemann said. Wealthy individuals are holding shows of emerging artists before they are discovered by dealers, striking fear into the exhibition programs of cash-strapped museums, he said.

“The private foundations have taken on such momentum that the museums are afraid of them,” said Lindemann, 48, wearing an open-necked shirt, blazer and cream slacks.

To read the full article, click HERE.

The Oriental Rug Market

Kelly Crow, writing for the Wall Street Journal has a good article on the rise in value and demand for antique oriental rugs.  She points to the spring sale at Christie's where a rug sold for a record price at auction for 20 times the estimate at $9.6 million (see image).

Crow states the demand is being fuel by Middle Eastern and European collectors and museums as they build collections of Islamic art. Also, contemporary art collectors are also in the oriental rug market who are looking to compliment modern and abstract collections.

The article is interesting and sets the current market interest in quality antique oriental rugs. The article also has a short "buyers guide" with age, color, condition, weave, and imagery considerations. A good article for both specialist and generalist appraisers to be aware of.

Crow states

Rugs are typically classified by the circumstances in which they were made—hand-woven by tribal nomads, crafted in a village or city, or woven on looms in a royal workshop—and prices tend to rise along the same lines, according to Jon Thompson, a British rug scholar. Those woven by tribes or in villages are on the lower end of the scale, commanding prices anywhere from $2,500 to $300,000. Persian court rugs made in royal workshops during the 15th and 16th centuries and featuring pastel, botanical designs, are particularly popular with collectors of Impressionist art, and their prices have been soaring into the millions.

The wealthy have collected Oriental rugs for centuries. Henry VIII owned several hundred Turkish rugs. Hans Holbein, Cornelius Vanderbilt and Sigmund Freud, who kept a rug draped over the couch where he conducted his psychoanalytic sessions, were Persian-rug aficionados.

These days, top antique rugs are sold more like works of art than pieces of décor. Some high-end rug dealers even eschew the retail system of pricing by the square foot, because their collectors will pay higher prices for small prayer rugs and rare rug fragments than for palatial floor coverings. In recent months, sales have been slower for pieces that are frayed or of mediocre quality, but values have climbed sharply for the best surviving examples, according to appraisers and auction records.

To read the full article, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies - 2010

As I mentioned in a post a few days ago about a Chubb Collectors article by Victor Wiener on authentication committees, Jane Brennom, ISA CAPP wrote an excellent article in the Journal of Advanced Appraisal Studies - 2010 entitled Appraisers vs Authenticators.  Most appraisal principles state that appraisers are not authenticators, and Jane's article goes into more detail about the differences between the two.

The Journal is published by the Foundation for Appraisal Education, and proceeds from the sale of the Journal support the educational initiatives of the Foundation.  Please support this worthy cause and order a copy of the Journal.  It is a must have for any appraisal library.  Click HERE for more information or to order the Journal. The Journal is only $55.00 for the print edition and $25.00 a downloadable version as a PDF.  For a limited time there is free shipping on the print version.  In the interest of full disclosure, Jane is my partner in the Appraiser Workshops.

In order to promote the journal and journal sales, the Foundation for Appraisal Education has placed the full article by Jane on its website for reading, printing and download.  Click HERE to visit the site, scroll down (you might have to wait a moment for it to load) and you will see the reader with Jane's article Appraisers vs Authenticators.  If you click the text sample article, the reader will open in a larger window. Please enjoy. The 2010 Journal is must have for any appraisal library. With 17 other articles like Appraiser vs Authenticators, can you afford not to have a copy in your library?

From Appraisers vs Authenticators by Jane C. Brennom, ISA CAPP

Authentication expands the process of identification and enhances an appraisal. For appraisal purposes, a property is considered authentic when the preponderance of experts accept it as such, again not an absolute standard, but a high one. Authentication is the scholarly determination of qualitative or extrinsic characteristics which result in expert opinions. Extrinsic characteristics include history, style, aesthetics, and past opinions of authorship, genuineness or origin. Authentication addresses the questions of whether an object , such as an antique table, is the product of a specific designer, from a particular period in time, or to establish the geographical origin. For example, “Is this an original “Thomas Chippendale” table, made in England during the mid 1800's? Or, is this photograph of the Kennedy family really signed by John F. Kennedy? Authentication uses past and present knowledge in relation to the intrinsic characteristics of a property and other property of like kind, to establish that an object has a specific identity, is a known and particular item, or is of a particular background. Authentication represents an informed and reasoned opinion but is rarely absolute. There may be disputes among experts because authentication is based on opinion. Disputes must be reflected in an appraisal report and in the associated value conclusion. In general, an object that is universally accepted as authentic will be valuated more highly than an object whose authenticity is disputed by one or more authorities.

Probably one of the most important factors in approaching an authentication is “provenance.” Provenance is the documented history and origin of the property, such as the progression of past owners, past exhibitions showing the object, and literature and text written about the object. Provenance separates the unique, special and scarce objects of the past from the ordinary ones. It is a detailed chronology. A gun used in WW II by our soldiers in the Third Army that fought under General George S. Patton Jr. in Europe might have value, but the same type of gun authenticated as General Patton's would have a significantly different value. Verifying provenance, determining origin, or who made an object, may include a study of a signature, a hallmark or trademark in addition to recognizing the inherent aesthetic qualities that are associated with a recognized maker. Physical evidence, when authenticating, may include the subject matter, design elements, materials used, construction techniques and suppliers materials. Some of the other methods of verifying provenance in the process of authentication can be based on factual information provided by the maker's personal statement that it is his or her work, or by someone who witnessed the making of the work by the designer, by someone who witnessed the maker signing the work, by someone who directly purchased the work from the maker, sold works for the maker or was associated with the maker in a professional or personal manner.

To order a copy of the Journal, click HERE.

College Art Association

During the ISA annual conference in Toronto, one of the speakers brought up a very interesting website.  It is the College Art Association's site in general, and the Standards and Guidelines page in particular.  The CAA mission is to promotes the visual arts and their understanding through committed practice and intellectual engagement.

I copied and pasted the text from the page, where most of the items are hot-linked to a page which gives more information and of course the guidelines and standards used by and for artists in publishing, teaching, and administration. The best practices section is particular interesting, and certain guidelines are certainly helpful to the appraiser.

Click HERE to visit the College Art Associations Standards and Guidelines page.

Standards and Guidelines
About CAA Standards and Guidelines

Since its founding in 1911, CAA has regularly issued Standards and Guidelines—professional practices for the fields of art and art history—which are developed by CAA’s committees and special task forces and presented to the Board of Directors for approval. CAA encourages all members, institutional and individual, to read, understand, and use these documents. Published formally since 1973, the Standards and Guidelines are divided into four categories.
Career and Workplace

* Artist Résumé (1999)
* Curriculum Vitae for Visual Artists (1999)
* Curriculum Vitae for Art Historians (2003)
* Curriculum Vitae for Museum Professionals (2000)
* Etiquette for CAA Interviewers (2006)
* Guidelines for Part-Time Professional Employment (2004)
* Slide Labeling (1999)
* Standards for Professional Placement (1992)
* Works in New Media: Recommendations for the Formatting, Handling, and Screening of Works (2000)

Ethics

* CAA Statement on Conflict of Interest (2006)

Legal Issues

* Copyrights and Permissions in Scholarly and Educational Publishing (under review)
* Guidelines Adopted by CAA Regarding the Hiring by Museums of Guest Curators, Exhibitors/Artists, and Catalogue Essayists as Outside Contractors (2002)
* A Guide to the New York Print and Photograph Law (1982)
* Printmakers Contracts (1978)
* Promotion of Distance Education Through Digital Technologies: Comments of the College Art Association (1999)
* Public Art Works (1987)
* A Quick Guide to Artists’ Rights under the New Copyright Law (1977)
* Resolution Concerning the Acquisition of Cultural Properties Originating in Foreign Countries (1973)
* Resolution Concerning the Sale and Exchange of Works of Art by Museums (1991)
* Standards for Sculptural Reproduction and Preventive Measures to Combat Unethical Casting in Bronze (1974)

Best Practices for Arts Professionals
Professional Practices for Artists

* Professional Practices for Artists (1977)

Professional Practices for Art Historians

* CAA Standards for Peer Review (2003)
* CAA Standards for Retention and Tenure of Art Historians (2009)
* CAA Statement on the Importance of Documenting the Historical Context of Objects and Sites (2004)
* A Code of Ethics for Art Historians and Guidelines for the Professional Practice of Art History (1995)
* Authentications and Attributions (2009)
* Guidelines for Curatorial-Studies Programs (2009)

Professional Practices for Academic Art Administrators

* Standards and Guidelines for Academic Art Administrators (2009)

Professional Practices for Museum Professionals

* Information about Museum Ethics and Professional Practices (2005)
* Professional Practices for Art Museum Curators (2007)

Professional Practices for Visual-Arts Faculty

* Guidelines for Faculty Teaching in New-Media Arts (2007)
* MFA Standards (2008)
* Standards for Retention and Tenure of Visual-Arts Faculty (2004)
* Standards for the BA and BFA Degrees in Studio Art (1979)

Professional Practices for Visual-Resource Professionals

* Criteria for the Hiring and Retention of Visual-Resources Professionals (2003)

Developing and Updating

* How to Develop/Update Guidelines (2008)

The Illusion of Restoration

As appraisers we need to know not only about the latest value and market trends, but what is also happening in the related fields, such as conservation. We need to be aware of new approaches and methods. Fellow appraiser Judith Vance sent me a very interesting Wall Street Journal article on a new process being undertaken at Harvard to restore a Mark Rothko mural.  What is intriguing about the process is how technology is now being incorporated into the conservation process.  The conservation is being done by a mixture of art conservators and high technology processes and equipment to manage a completely digital restoration without touching or altering the canvas.  The process will include projectors to fill in areas and match what would typically be in-painted areas. As the article states, it is in effect only the illusion of restoration.

The WSJ reports
 

When all the software is written and the paintings installed again at Harvard—somewhere else on campus, this time, and no one knows quite when—the murals should look to viewers the way they did back in 1963."It's the ideal restoration, where you don't actually touch the artwork," said Carol Mancusi-Ungaro, director of the Center for the Technical Study of Modern Art and also the associate director for conservation and research at New York's Whitney Museum. "We are restoring the appearance of the murals and restoring the experience that viewers can have when seeing them."
Call this hands-off art conservation, relying on technology to preserve the lifespan of artwork and other objects or, in this instance, to offer the illusion of restoration. The beauty of Harvard's use of spectrometers, computers and light projection is that the original murals aren't altered in any way. "It's a very reversible procedure," said Narayan Khandekar, senior conservation scientist at the Harvard Art Museum and a member of the team working on the Rothko murals. "Once you turn off the light switch, you are back to where you were."

To read the full WSJ article, click HERE.

Authentication Committees

Victor Wiener has an article in the new Chubb Collector on Authentication Committees and Questionable Works of Art.  Victor discusses the difficulties and subjectivity of authentication and issues including perceived biases of authentication committees.  As many appraisers are aware, and as posted on the AW Blog, the Warhol authentication board and foundation have been accused of manipulating the market in order to reduce supply and increase demand.

The next excerpt from the Journal of Advanced Appraisal Studies - 2010 is by Jane Brennom, ISA CAPP on Authentication vs Appraising.  A very interesting article and one all appraisers should be familiar with as the lines between the two can easily get blurred, look for the excerpt this weekend. It fits nicely with Victor's Chubb Collectors article.  Victor has also contributed to the Journal, writing article in the 2008 edition Appraising Art in the Stratosphere: The Dynamics of Steve Wynn's Elbow and Other Valuation Situations   and the 2009 edition The Unique Aspects of Appraising Large Scale Art.   For more information on the Journal, click HERE.

Winer states in his Chubb Collectors article

Yet, for all these categories of authenticators there have been significant challenges, legal and otherwise. Challenges center around whether the expert was biased towards the object or owners; whether compensation to the experts for their services was above the norm; whether improper methodology was employed for identification of objects; whether there is inconsistency in opinions and, in the case of artists themselves, whether there are falsifications of their own earlier works (as in the case of de Chirico) or imprecise memories of what they had created (as in the case of Balthus).

In an effort to render the process as objective as possible several steps have been taken within the legal and art communities. In France and other European countries experts have been designated by the courts as the holders of the "droit moral" or "moral right" to pass judgment. These are generally members of the artist's family. In France, the courts try to determine whether the family is competent, although there is an inherent tendency to give the designation to the family if possible. In Italy and some other countries, the droit moral generally goes to the family regardless. Upon occasion the courts have given the droit moral to scholars of the artist's work.

Whether family members, once recognized as authenticators by the courts, are also recognized as such by the marketplace is determined on a case-by-case basis. For example, when Picasso died he left a huge number of unsold works and several heirs. The French courts gave the droit moral to all of his family members, but two of his children - Maya and Claude Picasso - have emerged as the primary authenticators. However, there is considerable consternation in the art market over which of these is the most knowledgeable. Prospective buyers of Picasso paintings and sculpture have been known to seek the opinion of Maya Picasso, even when Claude was the one who had written a certificate of authenticity.

To read the full article in Chubb Collector by Victor Wiener, click HERE.

Sotheby's Launches Phone App

I have been using Christie's iPhone Application for a few months and have been waiting for Sotheby's to catch up.  They finally have, with a web based Sotheby's application for smart phones. The new application is free, and you can also access your My Sotheby's account.  The web based has upcoming auction information, past auction results (recent ones not the full database) and department information.

As it is not an iPhone or Android app, it is on the web, but it is a website which has been formatted for a smart phone.  To use the new smart phone program, go to your smart phone web browser, and visit m.sothebys.com. The site should come up and formatted nicely for the small screen with easy navigation.

It is nice that Sotheby's now is now represented on smart phones.  Viewing websites on smart phones are difficult unless they are formatted for the smaller screens, which is what Sotheby's has done.

Art Basel Opens to Select Crowd

Scott Reyburn reporting for Bloomberg reports Art Basel opened for a preview for invited guests only.  In other words, the heavy hitters and collectors of the contemporary art world.  As in the auction place, the news at the very top end of the sector remains good, with a Picasso sculpture selling for $15 million.

The art fair is one of the largest contemporary art fairs in the world with 303 galleries displaying.  This is the 41st year for Art Basel.

For appraisers, the interesting aspect is again the strength of the top of the market, and the muddled middle.  Current auction sales, including the recent price records has helped with market momentum and is certainly helping sales at the fair.  Some dealers saying the contemporary market is just about back to 2007 levels, at least at the very top end.

Art Info also reports of eager buyers with "wallets in hand" and that it is a bull market.

Reyburn reports

Hauser & Wirth also sold two sets of five 6-foot-high silicone sculptures of dwarfs by the Los Angeles-based artist Paul McCarthy. New works inspired by Walt Disney’s “Snow White,” these were priced at $3 million per set. Cheim & Read sold a canvas by the French-based painter Joan Mitchell for about $2 million, said Sheffer.

“We’re back to 2007 price levels for some names,” the New York-based dealer Per Skarstedt said. He listed a 2002 Christopher Wool abstract at $800,000, a 1992 Cindy Sherman photo at $500,000 and a 1987 Barbara Kruger silkscreen at $700,000 among his sales. The Sherman went to a Swiss collector, the Wool and the Sherman to U.S. buyers.

Hauser & Wirth was keen to avoid being overly exuberant about its recent signing of Matthew Day Jackson. A new life-size recycled wood sculpture of the artist as an astronaut sold to a European collector for $150,000. U.S.-based Jackson’s work was recently exhibited at Francois Pinault’s Punta della Dogana museum in Venice. One of his works sold for a record 601,250 pounds ($890,000) in February.

“We’ve been careful about pricing this artist,” gallery director Iwan Wirth said in an interview. “Otherwise, the market is pretty much back to the world we knew in 2008. The crisis in the art world lasted for six months, then it went back up.”

To read the full article, click HERE. To read the Art Info article, click HERE.

Update: Park West vs Fine Art Registry

The Detroit Free Press recently published a news story updating the current legal situation between Park West Gallery and the Fine Art Registry (FAR).  If you recall, a jury found Park West Gallery guilty of trademark infringement, while the main lawsuit and counter-suits for defamation were denied by the jury.

The article states that Park West is trying to have the trademark infringement case reversed or is asking for a retrial.  The article states that Fine Art Registry is readying a case against Park West which involves more than a dozen unhappy Park West Gallery patrons. Park West of course states they have not done anything wrong or improper, and in fact have over a million satisfied clients.  If the suits do get to trial, it will be interesting to see the details and inner workings of Park West and of course the outcome of how cruise ship art is promoted and sold.

In addition to those suits, Park West is also dealing with a possible class action suit in Seattle, WA which according to the Detroit Free Press accuses Park West of "racketeering, fraud and violating consumer protection laws by using phony certificates of authenticity to misrepresent artwork, issuing bogus appraisals that vastly overstate the value of artwork, selling mass-produced photomechanical copies as limited-edition prints and selling fake artwork, including art with forged artist signatures."  Keep in mind lawsuits can be brought, proving the charges to a jury is something all together different, so dont read too much into the list of accusations.


I find the most interesting aspect of the story is a short statement where FAR had requested an IRS agent to testify during the defamation suit.  The IRS declined, stating testimony could jeopardize a criminal tax investigation, although it does not state who or how it may be connected to the case.

The Detroit Free Press states

Scaglione said the Internet firestorm Franks ignited has cost him $46 million in losses. Between Franks and the declining economy, he said, his 2007 annual revenue of $250 million has dropped by $100 million and forced him to lay off half of his workforce.

"It's a pity we have become this woman's fatal attraction," Scaglione said. "None of this litigation would exist but for Franks. This is cyber-terrorism at its worst."

In late April, a federal jury in Port Huron unanimously rejected Scaglione's defamation claims against Franks and awarded her $500,000 for trademark infringement. The jury said Park West created a Web site with a name similar to that of Franks' to lure away users and berate her.

Scaglione and his lawyer, Rodger Young of Southfield, have asked U.S. District Judge Lawrence Zatkoff to throw out the verdict or retry the case.

They said Franks, her witnesses and her lawyers repeatedly violated Zatkoff's orders by mentioning critical newspaper articles, other lawsuits and a possible federal investigation of Park West. Scaglione and Young said there is no federal probe.

Federal authorities declined to comment, but acknowledged that the IRS sent Franks' lawyers a letter in March saying it wouldn't let an agent testify at her defamation trial for fear of impairing a criminal tax investigation. The letter didn't say who was being investigated or why.

Her lawyers, Donald Payton and Jonathan Schwartz of Farmington Hills, said they plan to file a new lawsuit soon in Oakland County, involving more than a dozen other unhappy Park West patrons.

The one they filed in Oakland County in 2007 on behalf of 10 customers could go to trial next year. Scaglione settled out of court with four of the plaintiffs.

To read the full Detroit Free Press article, click HERE.

“Priceless: How I Went Undercover to Rescue the World’s Stolen Treasures”

Robert Kennedy of the NY Times reviews the new book, “Priceless: How I Went Undercover to Rescue the World’s Stolen Treasures,” by ex FBI art crime sleuth Robert Wittman. The book is available on Amazon.com, click HERE to view and order. The NY Times piece is actually more of a background article on Wittman, and less a formal book review, but it does note how interesting a tracking art crime can be.

I have ordered the book and look forward to reading it.

Kennedy states in his review

Of course pursuing art thieves also had its perks at a place where a big cocaine bust could start to feel like just another big cocaine bust. Mr. Wittman’s investigations — which he says resulted in the recovery of more than $225 million in art and antiquities, including works by Goya, Rodin and Rembrandt, along with Geronimo’s eagle-feather war bonnet and the original manuscript of Pearl S. Buck’s “Good Earth” — took him around the world, to Rio de Janeiro, Paris, Madrid, Copenhagen. In 2003 he accompanied one of the 14 original copies of the Bill of Rights on the F.B.I. director’s jet to return it to its home in Raleigh, N.C., after it was seized in an undercover sting.

Even the local cases could be thrilling. He and his mentor, an agent in the Philadelphia office of the F.B.I., Bob Bazin, once tracked down a 50-pound crystal ball from the Forbidden City in Beijing, which they found sitting in a housekeeper’s bedroom in Trenton, beneath a baseball cap. (It had been stolen from the University of Pennsylvania Museum of Archaeology and Anthropology and later given to the housekeeper as a birthday present; she thought it was worthless.)

“When you track down something like that, you have this feeling of euphoria that I can only compare to how I felt when my kids were born,” said Mr. Wittman, a burly, soft-spoken man who carries himself with the authority of a cop, but who was able, for long stretches, to convince criminals he was one of them.

“Priceless” can read at times, not unpleasantly, as if an art history textbook got mixed up at the printer with a screenplay for “The Wire.”

Readers learn, for example, the difference between “the bump” (in which an undercover agent makes contact with a suspect by way of a seemingly accidental meeting) and “the vouch” (in which someone leads the suspect to believe the undercover agent is who he says he is). Other investigative details dazzle: a Miami yacht at the ready to entertain a group of thugs; a gym bag filled with 500,000 euros in cash to “buy” a Breughel in Spain; an unnamed Hollywood starlet who helps the bureau by pretending to “know” an undercover agent in his alter ego, cementing his reputation as a player.

To read the full article in the NY Times, click HERE.

French Auction Record

A sculpture by 20th century artist Amedeo Modigliani sold at Christie's in Paris for $53 million including buyers premium. the Modigliani sold for 10 tens the low estimate and also set a record for a piece selling at auction in France. According to the article and Christie's, Modigliani was influenced by African sculpture when creating the piece. The sculpture, Tete (see image) is supposed to be one of the last by Modigliani in private hands.

Scott Reyburn of Bloomberg reports on the sale.

Christie’s International said it had expected Modigliani’s “Tete” to sell for between 4 million euros and 6 million euros at hammer price. The 2-foot-high (0.6 meter) modernist piece, influenced by African sculpture and the work of the artist’s mentor Constantin Brancusi, was one of the last Modigliani sculptures left in private hands, said Christie’s.

It had been in the collection of Gaston Levy, co-founder of the business that what would become the Monoprix supermarket chain, since 1927, said Christie’s. The anonymous buyer, making a telephone bid, beat one European and one U.S. bidder, said the auction house: 15 phones were registered to bid.

To read the full Bloomberg article, click HERE.

Results: Sotheby's Antiquities Sale

Sometimes auction results can be misleading, and as we know sometimes statistics can mean many different things.  Sotheby's NY just held its Antiquities sale, with thier press release emphasizing the $17.5 million total, and stating it was three times the pre sale high estimate.  Sounds pretty good so far, but then as we look closer and deeper there were 102 lots offered with 79 selling for a 77.4% sold by lot rate.  The sell through rate is very respectable, so where is my issue.  The issue is, and what makes the sale numbers look a misleading as an across the board success is that the top three lots accounted for nearly $15 million of the $17.5 million in sales, or nearly 86% of the total.  Out of the 79 selling lots, 76 lots made a grand total of $2.5 million or just about $33,000.00 per lot.

The three top selling lots sold as follows with the pre sale estimates listed:

• $7.36 million against a pre sale estimate of $800,000 to $1.2 million
• $4.11 million against a pre sale estimate of $600,000 to $900,000
• $3.44 million against a pre sale estimate of $300,000 to $500,000 

Factoring out the three top lots, the sale performed pretty much as expected.  We may have another situation here of some great quality and rare items at the top end of the sale selling at premium prices, while the more average items fall into the same pattern of performing at a lower level.  Although it does not explain how Sotheby's missed on the three estimates, although it could be a bit of marketing to grab attention with unusually low estimates.  As appraisers know, auctions houses can try to manipulate pre sale estimates to their advantage in both selling and for publicity reasons.  It goes to show how subjective the fine and decorative arts marketplace is and how many perceive value differently. Buyers of the top ten included one institution, one US Trade, one Spanish collection, two listed as anonymous, one as a private collection, two as US private collections and two as anonymous private buyers.

The Sotheby's press release stated

In a packed salesroom at Sotheby’s this afternoon, a Marble Torso of an Emperor
(probably Augustus, Tiberius or Claudius), Roman Imperial, Julio Claudian, 1st Half of the 1st Century A.D., surpassed all expectations, selling for a remarkable $7,362,500, more than six times the high estimate of $1.2 million*. At least seven bidders in the room and on numerous telephones pursued the stunning piece, which was from an Austrian family collection. The salesroom erupted in applause when an anonymous bidder, participating over the telephone, cast the winning bid. The Marble Torso of an Emperor was included in a sale of Antiquities which totaled $17,479,940 (est. $3.2/4.8 million), the highest total for a sale in this category at Sotheby’s since December 2007. Of the lots that sold in today’s sale, nearly 90% achieved prices at or above their estimates.

The same Austrian family collection that consigned the aforementioned torso had also consigned Three Satyrs Fighting a Serpent, Roman Imperial, circa 1st century A.D., a rediscovered antiquity from the collection of one of the greatest arts patrons of all time – Lorenzo de’ Medici. As the only ancient sculpture confirmed to have been in ‘il Magnifico’s’ collection, competition was also fierce for the ancient treasure, which finally sold to an anonymous private buyer for $3,442,500, more than six times the high estimate of $500,000. The cover lot of the auction,
a Marble Bust of the Athena Giustiniani, Roman Imperial, circa 2nd Century A.D. was also among the highlights of the day, selling for $4,114,500, surpassing a pre-sale estimate of $600/900,000.

Update: Estate Tax

There is no new word on the status of a new estate tax bill from Congress.  The Hill reported early in June that Sen Charles Grassley (R-Iowa) is pushing Senate Majority Harry Reaid (D - Nevada) for some form of backing to several proposals.  According to the Hill, Reid is not tipping his hand on what he plans on doing, as the estate tax law is set to revert pre 2001 levels of 55% levy on estates valued at over $1 million for 2011.

Grassley stated he would like a bill to come out of the Senate finance committee, but he has no guarantees from Reid that the full Senate would consider any new bill on the estate tax. Given the current budget deficit, I would believe there is consideration of either leadership inaction or a bill which taxes at a higher rate than many expect or are currently proposing (such as the bipartisan bill of Jon Kyl and Blanche Lincoln).

Only time will tell what happens. I will try to monitor the situation and post to the AW Blog as I get news of any movement.

In the mean time The Hill reports

Sens. Jon Kyl (R-Ariz.) and Blanche Lincoln (D-Ark.) have hatched a bipartisan plan that would create a permanent 35 percent tax on estates worth more than $5 million. But without Reid backing the proposal, Grassley said the Senate Finance Committee is unlikely to bring the bill forward.

"The Finance Committee would like to consider the legislation, but we aren't assured by the majority leader that the bill passed out of committee would be taken up on the floor," he said.

Grassley is the ranking member on the Finance Committee and has conferred with Kyl and Senate Finance Chairman Max Baucus (D-Mont.) on the estate tax. Both men say Reid is playing his cards close to the vest when it comes to the levy.

"Reid will not really give us a clear direction," Grassley said, adding, "I think that there's going to be a tremendous upheaval at the grassroots of America – and more rural America than big city America – if it looks like we're going to revert to the million-dollar level."

Lawmakers were supposed to be close to a deal on the tax a few weeks ago, but that agreement apparently fell apart. During those negotiations, Kyl said there was some disagreement on how to pay for the bill. However, today, Grassley said offsets were no longer an issue, but did not say what offsets were being used to pay for the bill.

"We can find the offsets, that's no problem," he said. "It's not easy and one of the offsets was in another bill, but I don't think offsets is the problem."

Grassley could not say when the estate tax would be addressed.

To read the full Hill article, click HERE.

Excerpt from the Journal of Advanced Appraisal Studies - 2010

Occasionally an appraisal assignment is requested which requires a valuation approach that is uncommon or out of the ordinary.  New York City appraiser Elin Lake-Ewald had such an assignment, and describes her approach to the assignment in a very interesting article for the Journal of Advanced Appraisal Studies - 2010. The Article is entitled Original Research and Innovative Appraisals.

The Journal is published by the non profit, 501 (3) c Foundation for Appraisal Education.  Proceeds from the sale of the Journal go to the foundation to support appraiser education through scholarships and grants.  All working on the project, included the editorial staff and all contributors participate without compensation in order to support this worthy cause to advance personal property eduction for appraisers and those in related fields.  Since I developed this project in 2007 we have had the pleasure of publishing three well regarded Journals, with over 60 excellent articles written specifically for personal property appraisers.  Some authors have contributed in multiple editions, and some in all three editions.

Please support these efforts by purchasing a copy of the Journal.  More information is available at www.appraisaljournal.org.   I am now looking for contributors for the 2011 edition, please contact me if you have an article you would like us to consider publishing.  Click HERE for more information on our editorial policy and publication guidelines. If you have not read or seen the Journal, I urge you to support the cause and order a copy.  As you can see by the excerpts which I post on the AW Blog, the articles are of interest to appraisers, are of high quality, expand our knowledge base and hopefully increases professionalism.

Appraiser Elin Lake-Ewald, Ph.d., ASA, is president of O'Toole-Ewald Art Associates, Inc. Dr. Lake-Ewald states her appraisal firm is the largest in-house independent personal property firm in country with an experienced team of specialist appraisers in the fine and decorative arts. Nationally known for its success in large scale assignments involving extensive collections. Clients include Fortune 500 corporations, museums, insurance companies, law firms, and individual collectors. Damage/loss/fraud report experts.

Dr. Lake-Ewald has been qualified as an expert witness in federal, criminal, state, circuit, bankruptcy and tax courts, testifying in both civil and criminal court cases. Dr. Lake-Ewald is an American Society of Appraisers (ASA) certified senior appraiser; Royal Institution of Chartered Surveyors UK. Dr Lake-Ewald can be reached at info@otoole-ewald.com.

From Original Research and Innovative Appraisals

Once in a while, and these occasions don’t occur with great frequency, the personal property appraiser is asked to take on an assignment for which there is no precedent, no standards set by USPAP, no guidelines provided by his or her professional association, and very little reference to the subject in other disciplines.

Such a situation arose earlier this year when we were approached by
the director of a trust to provide:
A. fair market value appraisal
B. replacement value appraisal
C. fair market/replacement value leasing fee

Twice before the issue of art leasing had come up in this appraiser’s
experience. The first time the family attorney had advocated for a specific outcome and we declined to pursue it. The second time it was the client, not the attorney, who wanted control of the process and methodology. With such pressure there was no way that a successful outcome could emerge and we declined to pursue it.

This time the task of providing guidance on the issue of art leasing
was possible due to a client with no predisposed agenda who genuinely
wanted the most honest and appropriate resolution. Additionally, the client had respect for the professionalism of the appraiser, and confidence in her ability to develop a coherent and successful methodology in order for an innovative idea to take root in the appraisal field.

It was the function of the appraiser to determine, not only the two
valuations, but also to provide a rationale for the fee to lease these works of art on a six-month and a yearly basis that all participants would agree was applicable. Not only would the executors of the trust have to be convinced, but so would the collector, in whose home the art was displayed. A fee that we ultimately determined to be appropriate must also be sufficient to satisfy Elin Lake-Ewald the members of the trust and at the same time not be considered onerous to the collector.

The subject work was that of twenty paintings, located in a private
home and also in a museum on a loan basis.

The trust owned 95% of the art, and the former owner, in whose home the art was located, owned 5%. The 5% owner had been the original collector of the artworks and, while agreeing to allocation of the shares to the trust, opposed the sale of any of the paintings. The leasing agreement offered the opportunity for the collector to continue to house and display the art, with the trust as beneficiary of the rent.

Initial Analysis

The twenty paintings in the collection were by established American artists. Therefore, the appraisals for both fair market and replacement value presented no obstacle, although the timing of the appraisal followed shortly after a steep decline in the art market, which was reflected in the valuation.

It was the third, and most crucial, component of the assignment that called for a creative approach and, most importantly, original research.

While the tracking of both auction and retail prices is considered straight forward data collection, research is hydra-headed, allowing for source-based research that includes both secondary and tertiary sources. The third type and most attestive of sources – primary – signifies an original
source, that is, a source at the time of or close to an event, such as diaries, historical documents, verified surveys, eye-witness accounts, and interviews. In other words, first hand research. In this instance, that of defining leasing fees, we chose to rely upon surveys and interviews to achieve our goal.

During the analysis of this particular assignment it was our conclusion that original research was required, but there would as well be data collection combined with secondary and tertiary sourcing.

To order your copy of the Journal, click HERE. For a limited time there is free shipping.

Results: Phillips Design Auction

Artinfo has a very good recap of the recent Phillips Design Auction. As the AW Blog has made several recent posts about internet entrepreneur Halsey Minor, he also had property in the Phillips design sale in order to raise funds to pay off debt to M L Finance.  Between this and past sales, it appears Minor will be able to satisfy his outstanding debt with ML Finance.

The Phillips sale of modern and contemporary designs was not a great success.  The Phillips Design Auction was described by the Artinfo article as "lackluster" and "workmanlike". I have heard anecdotally that this market sector is starting to cool, and if looking, there certainly are signs of it.  The question is if there is just a momentary pause, and if so, then in what direction will 20th century design turn.  It is a market segment appraisers should watch closely, as the 20th design market had some fast growth over the past several years, it will be interesting to see if it maintains the attention of collectors or if it does in fact start to show some signs of weakness.

According to Artinfo the Philllips sale offered 226 lots of which only 151 sold for a fair lot selling rate of 62%.  The sale totaled $4.95 million against a pre sale estimate of $5.27 to $7.41 million.

Minor had 10 lots in the sale including the prized lot of a Marc Newson 1987 Pod of Drawers which was estimated to sell between $300,00 and $500,000. It sold for $350,000.00, within the pre sale estimate, but still far between what was paid and perhaps what was truly expected. The last time this Newson item sold was at Christie's in May of 2007, selling for over $1 million to a dealer, who then sold it to Minor. It is not a stretch to assume Minor paid more than the $1 million price paid at auction, and only realized $350,000.00 when selling three years later.

Of the ten Newsons offered (among them two rare prototypes), six sold for a rather anemic $686,300, a poor showing for work by the superstar but safely within the $600,000-915,000 estimate Phillips had attached to the works. “Obviously, it was disappointing,” said Phillips de Pury design head Alexander Payne immediately after the sale, referring to two of the unsold Newsons, Event Horizon and a lot containing his Black Hole tables, which failed to find any bidders. “It was a little difficult to digest this quantity of Newson works.”

Newson was one of the standouts in the May Halsey auction, when his 1988 prototype Lockheed Lounge (est. $1-1.5 million) made an artist record $2.1 million.

All told, the Minor lots made $1.4 million compared to presale expectations of $1.67–2.44 million. Tacked onto the results of the contemporary sessions of May 13 and 14, the Minor's complete auction haul comes to $25.5 million. That cumulative tally — assuming all the winning bidders pays up — will wipe the judgment clean for Minor and put a big feather in Phillips’ cap for marketing the collection. (Phillips was so eager to nail the juicy consignment, it agreed to cough up eight percent of the buyer’s premium on all of the Minor lots to ML Finance. In the trade, this reimbursement, popular during the recent art market boom, is known as “enhanced hammer.”)

To read the full Artinfo article, click HERE.

Results: Sothebys Sells Collection of Patricia Kluge

The two day on site auction from the collection of Patricia Kluge at Albemarle House in Charlottesville, VA totaled $15.16 million including buyers premium. This was against a pre sale estimate of $9 to $14 million. The sale continues to show that quality and provenance means high prices. Sotheby's reports that over 2,000 people visited the home during the week long exhibition. Over 900 lots were offered with 88% of the lots selling and over 61% of the lots selling for over the pre sale high estimate.

The top selling lot was an Imperial Chinese Table Clock from the Guangzhou Workshops, Qing Dynasty, Quianlong period and sold for $3.77 million, which was over three times the high estimate of $1 million and was the third highest amount paid at auction for this form of clock (see image). The purchaser was a Chinese private collector.

Sotheby's stated

In addition to the clock, a number of spectacular prices were achieved during the first day of the auction, including a Pair of Classical Landscapes by Hubert Robert, which brought $434,500 (lot 99, est. $200/300,000); a Set of Six Holland & Holland Wildfowl and Wader Guns, which achieved $350,500 (lot 62, est. $330/500,000); a Fabergé Silver Centerpiece, which totaled $206,500 (lot 196, est. $40/60,000); and an Important George III Mahogany Commode attributed to Thomas Chippendale, which sold for $338,500 (lot 67, est. $400/600,000).

Works across a number of different categories also achieved prices well in excess of their estimates: An Ivory Silvered and Gilt-Bronze-Mounted Mother-of-Pearl, Inlaid Alabaster and Onyx Chess Set, probably Italian, circa 1900, sold for $98,500, soaring past the high estimate of $10,000 (lot 280, est. $7/10,000); a set of The Lord of the Rings (Trilogy) Fellowship of the Ring and The Two Towers, J.R. Tolkien, London, 1954, brought $17,500 (lot 337, est. $4/6,000); a Group of Ten English Silver Birds, Asprey, London, 1987 sold for $74,500, (lot 201, est. $5/8,000); a Pair of Ormolu-Mounted Meissen Porcelain Figures of Seated Pug Dogs sold for $86,500 (lot 121, est. $25/35,000) and a Fragmentary Bronze Portrait Head of the Emperor Augustus, or a member of the Julio-Claudian Family, Roman Imperial, circa early 1st Century AD, sold for $188,500 (lot 344, est. $100/1500,000).

The Associated Press reported

Sotheby's previewed the 900-item collection for a week before the sale, and more than 2,000 visitors who paid $65 for the 620-page auction book attended the public exhibition to examine the collection at the 23,000-square-foot (2,136-sq. meter) English country manor.

The preview and auction also was a showcase for the 45-room brick Georgian, which also is on the market. Kluge acquired Albemarle House, its accouterments and 3,000 acres (1,214 hectares) in the settlement of her 1990 divorce from billionaire media mogul John W. Kluge. The couple had been married for nine years.

Sotheby's International Realty has listed the estate at $48 million, reduced from $100 million last fall. The property also includes about 300 acres (121 hectares), multilevel English gardens and fountains, a swimming pool and a rustic guest cabin.

Kluge and her husband, William Moses, have moved to a 6,400-square-foot (594-sq. meter) home elsewhere on the estate grounds. She said that they wanted to scale back so they can focus on traveling and running their winery business.