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Art Law

Recent Developments in Art Litigation and Art Finance

Christie’s Contemporary Art Auction Sets All-Time Record For An Auction

Posted in Art Finance, Art Valuation

Not to be outdone by its rival, Sotheby’s, as reported here, last week Christie’s in New York surpassed its prior record of $745 million set back in May at Christie’s contemporary art auction and brought in the “highest-ever for an auction” at its recent contemporary art auction “grossing $852.9 million across 75 lots.”  Nearly all of the total 80 lots offered for sale had buyers for a sell-through rate by lot of 94 percent.

The two top lots of the evening were Andy Warhol’s Triple Elvis [Ferus Type] (1960) and Four Marlons (1966) fetching $81.9 million and $69.6 million, respectively.  The third highest lot of the evening, Cy Twombly’s Untitled (1970), sold to a phone bidder for $69.6 million.

Also notable at last week’s contemporary art auction, new artist records were set for 11 artists, including Cy Twombly, Ed Ruscha, Peter Doig, Martin Keppenberger, Sturtevant, and Seth Price.

Christie’s Chairman and International Head of Postwar and Contemporary Art, Brett Gorvy, noted at the press conference following the auction that there were some 500 bidders from 43 different countries and that this was a “collecting-buying pool tonight, rather than dealers.”

For a further recap of last Wednesday evening’s contemporary art auction at Christie’s, click here.

Contemporary Street Art Emerging in Athens, Greece

Posted in Current Art Exhibits

The country’s recent experiences with the hardships of economic collapse and unemployment have led to a new wave of innovative, contemporary street art in Greece.  And, the rise of socially and politically-minded graffiti is making Athens a new hotspot for street artists.

Embracing this status, the city of Athens hosts the Athens Street Art Festival, an Annual Independent European Contemporary Street + Urban Art Festival established provide a platform for artists operating outside of traditional systems.

slide_381232_4525338_free                                                                                                                Photo credit: Milos Bicanski

View a survey of Greek graffiti, photographed by Milos Bicanski, here and here.


Delaware Museum of Art Receives Generous Donation Despite Recent Move to Sell Off Art

Posted in Art Finance, Art Museums

The Delaware Museum of Art, home to the Bankcroft Collection – a beautiful collection of Pre-Raphaelite art, recently received three generous gifts totaling $1.7M from two anonymous donors and prominent Wilmington, Delaware residents, Peggy and Edgar S. Woolard.

The museum invested the funds in what has been named the Annette Woolard-Provine Endowed Curatorship, which is designed to attract talented scholars to the museum.  The generous donations come as a surprise given the museum’s recent controversial decision to sell off certain works of art including the Pre-Raephaelite painting by William Holman Hunt, O.M., R.W.S. (1827-1910), Isabella and the Pot of Basil, which recently sold for over £2,882,500 (a record auction price for the artist) at Christie’s (London).

After expensive renovation and expansion over the last several years, the museum was faced with mounting debt and little options.  Consequently, in March of 2014, the museum’s Board of Trustees elected to deaccess up to four works of art from the collection.  As a result of this controversial decision, the museum was formally sanctioned by the Association of Art Museum Directors (AAMD), which instructed member museums to refuse to lend artwork to the museum.  Pursuant to AAMD guidelines, “[f]unds received from the disposal of a deaccessioned work shall not be used for operations or capital expenses.” (emphasis added).

While the AAMD’s directive to museums regarding deaccession (i.e., that proceeds from the sale can only be used to acquire more art) may protect collections from being dismantled willy-nilly, hard and fast rules preventing museum board’s from making decisions to sell off works when appropriate may not be the most effective means of protecting collections.  In reality museums have limited space, and if the collection is overflowing, much of the artwork may not even be on display for the public to enjoy.  Further, some donated works while generous may not fit with the museum’s collection and remain in storage for no one to view.  It may be helpful in limited circumstances for museums to have more autonomy to deal with deaccession decisions and the use of the proceeds as they see fit without losing other benefits.  However, trustees must carefully weigh the cost/benefit to deaccession.  Even if a museum is not formally sanctioned, there is a danger that a museum will lose donations of art and/or funding, if donors believe the art will be sold off.  Luckily, in the case of the Delaware Museum of Art, the generous donors still chose to give to the museum despite the recent sales.

In order to avoid the need to sell off works, museum trustees may look to generate revenue from other means such as developing tuitioned visual art programs for children on winter weekends; and/or marketing the museum as an event space including investment in kitchen facilities and strategic exhibit layouts that works to maximize total attendees to events.  I also wonder if rotating art and changing the exhibits of even the permanent collection (like department stores do) would generate more visitors.


Sotheby’s Fall Impressionist And Modern Auction Is A Success Setting Record High Of $422M In Sales

Posted in Art Finance, Art Valuation

Earlier this week Sotheby’s opened the fall auction season with an impressive record high of $422 million in sales in a single auction for the world’s fourth oldest auction house in continuous operation.

As reported here, of the 73 lots up for auction, 15 lots did not sell, hence the average sell-through rate of 79 percent.

The fall Impressionist and modern auction’s top lot during the evening was Alberto Giacometti’s Chariot (1951-52), which sold after just one $90 million bid (final price with premium was $100.97 million) from a phone bidder who surfaced at the end.  Notably, the final price with premium is just under the artist’s $104.3 million record for the work L’homme qui marche I, auctioned by Sotheby’s London in 2010.

The evening’s second highest lot included the record-setting Modigliani sculpture Tête (1911-12) that ultimately sold for $70.73 million surpassing the artist’s previous record set in 2010 at $68.96 million with a painting.  A private Chinese collector represented on the phone by Sotheby’s Beijing was the successful bidder in the sale of the evening’s third highest lot, Vincent van Gogh’s Still Life, Vase with Daisies and Poppies (1890), at $61.8 million.

For a thorough recap of Sotheby’s fall Impressionist and modern auction sale earlier this week, click here.

Ninth Circuit to Rehear En Banc Appeal Re: California Resale Royalties Act

Posted in Litigation Issues

Last week, the Ninth Circuit agreed to rehear en banc an appeal of a federal court decision striking down the California Resale Royalties Act (the “Act”).

The Act required sellers to pay artists 5 percent of the resale price of all fine art sold in California or put up for sale by California residents.

In October 2011, certain artists proposed three class actions against Christie’s, Sotheby’s and eBay alleging that the auction houses failed to pay royalties owed to the artists pursuant to the Act.  In May 2012, U.S. District Judge Jacqueline Nguyen dismissed the claims, finding the Act in violation of the Commerce Clause of the U.S. Constitution by impermissibly requiring royalties from transactions occurring outside California between non-California parties.

Read more here and here.

Philadelphia Museum of Art Features a Retrospective of Paul Strand’s Photography

Posted in Current Art Exhibits

The Philadelphia Museum of Art is featuring “Paul Strand: Master of Modern Photography” from October 21, 2014 – January 4, 2015.  This retrospective presents the work of American photographer and filmmaker, Paul Strand (1890–1976), and includes approximately 250 of Strand’s prints, selected primarily from the Museum’s holdings, as well as public and private collections.

Read more about the exhibition here.

Bankruptcy Trustee Probe: Robert Truland’s Purchase of Company Artwork for Fair Price?

Posted in Litigation Issues

The Washington Business Journal recently reported that the bankruptcy trustee for Truland Group Inc., D.C.’s area’s largest electrical contractor, is investigating whether the company’s CEO, Robert W. Truland, paid fair value for the dozens of pieces of artwork that he purchased from the company just four months before it suddenly shut down.  Read full article here.

A number of former employees of the Truland Group reported that Robert Truland was seen removing artwork from the walls of the company’s headquarters, just one day before it filed for bankruptcy.  Robert Truland paid the company $188,275 for the artwork, some of which the company previously bought from the Corcoran and Zenith galleries.

Skate’s Releases Inaugural Masterpieces Market Report for Fall 2014

Posted in Art Finance, Art Valuation

This week Skate’s LLC, often referred to as one of the world’s leading art investment firms, released its inaugural Masterpieces Market Report for the third quarter of 2014.  If you haven’t already noticed from my previous posts on Skate’s publications, I am a frequent reader and admirer of Skate’s various reports, which I personally find to be very informative and well written on the art market.  And this fall’s new issue is no exception as I can’t say enough good things about these timely, well executed reports published by Skate’s.

The inaugural issue opens with a succinctly written “Executive Summary” followed by key sections entitled “Best and Worst Trades with Masterpieces – Q3 2014,” “Global Masterpieces Trade Statistics – Q3 2014,” “Top Lots to Watch – October 2014,” and “Off-Auction Pricing Case Study:  The Curious Case of the Detroit Collection.”  The report includes seven exhibits accompanying the foregoing sections, including an impressively compiled “All Trades in Skate’s Top 10,000 Price Category in Q3 – 2014,” “Top 10 October Lots,” “Anticipated Investment Returns on Major Auction Sales in October,” and “DIA Top Lots vs Auction Market Data as per Skate’s Top 10,000.”

Notably, Skate’s best masterpiece trades for the third quarter of 2014 were for purchases made in the 1990s as long-term investments in 20th century artists.  The purchase of works by Warhol, Basquiat and Dubufett in the 1990s and the sale of same earlier this year turned out very well for art collectors who realized “strong double-digit annualized returns over their 15-23 investment horizons” as analyzed by Skate’s.

Skate’s reports that the Old Masters market continues its decline as it loses appeal among both established and new art collectors.  When compared to the Old Masters, investment returns on the leading contemporary artists (also the “most liquid”) are “striking.”

At the end of the report is an interesting case study on the collection of the Detroit Institute of Arts (“DIA”) and the significant art valuation of the collection in connection with the city of Detroit’s bankruptcy filing last year.  Skate’s offers insight into the valuation of the DIA collections and the financial strategy that may be used by the city of Detroit.

Skate’s will publish its next issue of the Masterpieces Market Report in January 2015 – the report is expected to include complete results from Q4 2014 auction sales along with other valuable information on the art market. 

Esteemed 20th Century Private Art Collection Expected To Fetch In Excess Of $85 Million At Sotheby’s Fall Auctions

Posted in Art Valuation

In a recent announcement by Sotheby’s earlier this week, a significant collection of modern and contemporary art compiled by two of the 20th century’s most renowned collectors is expected to generate in excess of $85 million in sales during Sotheby’s upcoming contemporary and modern art auctions next month.

As recently reported here, some of the prized items in the collection leading next month’s series of contemporary and modern art auctions include Mark Rothko’s 1951 canvas entitled “No. 21 (Red, Brown, Black and Orange),” which is expected to fetch more than $50 million, and works by Salvador Dali, Pablo Picasso, and Andy Warhol, along with other prominent artists from the private art collection of Pierre and Sao Schlumberger.  According to Oliver Barker, deputy chairman of Sotheby’s Europe, the couple’s collection is highly regarded as “one of the most important private collections of our time.”

For those not familiar with the Schlumberger name, Pierre Schlumberger was a French oil industry tycoon whose father and uncle in the 1920s founded Schlumberger Limited, which is the world’s largest oil field services company.

The Schlumberger collection is comprised of some 90 works and is among the many highly anticipated works of the fall auction season.

Sotheby’s further announced last week that it is selling the iconic sculpture “Chariot” by Alberto Giacometti – it has been reported that such work could sell for more than $100 million. 

The highlights of the collection will be on view in Hong Kong and London prior to a special exhibition of the entire collection in New York later this month.  The first offerings of the Schlumberger collection will be featured at Sotheby’s Impressionist and Modern Art auction on November 4, and the other works will be offered at the auction house’s contemporary art auctions through November 12.

For a glimpse into the exquisite Schlumberger collection, view here.

Duke University’s the Nasher Art Museum Receives Generous Donation from Alumnus

Posted in Art Finance

Last week, Nasher Art Museum, the museum of my alma mater, Duke University, received a generous $1 million donation from Dallas entrepreneur and collector, Derek Wilson (Duke, Trinity College ’86; Fuqua School of Business ’90) and his wife Christen, an avid connoisseur of art and fashion in her own right.  I worked at the museum (before being named after Raymond D. Nasher, Duke alumnus, Trinity College ’43, collector and benefactor) when it was an intimate space, nestled in the academic buildings on East campus.  The gallery has grown exponentially since I was there.   Now a true museum, the gallery is centrally located along Campus Drive with room for outdoor sculpture and a parking lot!  When I worked at the museum, the main gallery space was filled with traditional medieval and renaissance works, and contemporary exhibits were reserved only for the downstairs space (which although small in square footage had great vertical height with cathedral ceilings).

My how times have changed.

As I recall from my most recent visit to the Nasher, now the focal point of the collection is the modern/contemporary art.

Wilson and his wife are avid collectors of modern art and have done a lot to support a number of new and up and coming artists.  It is reassuring to see modern day benefactors cultivating new artists just like the Medici family in old Florence.  Collectors should not just rely on an artist’s posthumous fame as a reason to collect their work but should invest in living artists too.  It will be interesting to see what Wilson’s infusion of cash will bring to the museum.  Hopefully some home grown student artists will receive support.

Lucky for the Blue Devils, the million dollar donation to the museum was made by Wilson in tandem with his father, alumnus Gary L. Wilson (Duke, Trinity College ’62), who has also donated $2 million to the University for the building of, among other things, athletic buildings.