10/24/2014

Is the Detroit Institute of Arts Collection Now Safe?


The Art Newspaper is reporting the DIA collection should be secure as the bankruptcy proceedings come to a close and as creditors are buying into the Grand Bargain to safeguard the collection.

The reports are unconfirmed, but if the "chatter" is correct, it looks as if it might be a done deal. I will say it has been an interesting journey to observe the negotiations as well as the unique spotlight shown on various, and rather wide valuation conclusion be appraisers.

The Art Newspaper reports
The safety of the DIA’s collection is close to hand after a deal is reached with the bankrupt city’s biggest creditor

The Detroit Institute of Arts (DIA) has cleared its biggest remaining hurdle to secure its art collection. Last week, the city of Detroit reached a settlement with its largest holdout creditor, the Financial Guaranty Insurance Company (FGIC). As Detroit’s 16-month-long bankruptcy trial comes to a close this week, the 11th-hour deal all but guarantees that the DIA’s collection will not be sold to pay down the city’s debt.

The bond insurer FGIC—which is owed around $1bn of Detroit’s $18bn debt—was one of the most vocal opponents to the so-called “Grand Bargain”, a scheme to safeguard the DIA’s collection while generating money for the city’s pensioners. Under the terms of its recent settlement, the city has agreed to demolish the Joe Louis Arena, home to Detroit’s hockey team, and allow FGIC to develop a hotel, offices and retail stores in its place. In exchange, the company will withdraw its objections to Detroit’s plan to emerge from bankruptcy. Last month, the city reached a similar settlement with the Syncora Guarantee Insurance Company, another major creditor.

The bankruptcy judge Steven Rhodes is due to render a final verdict on the city’s plan—including the Grand Bargain, which is considered its centrepiece—during the first week of November. But some bankruptcy experts already consider it a done deal. “The city was always going to propose a plan that did not involve selling the art,” says Laura Bartell, a law professor at Wayne State University in Detroit. “That’s what they did, and the judge is going to confirm the plan.”

Many expected the fate of the DIA’s collection to remain in limbo well after Judge Rhodes’ ruling, however, because creditors unhappy with his decision were likely to appeal. (FGIC and Syncora previously claimed that a sale of the art collection could garner as much as $8.1bn.) The recent settlements take the possibility of an appeal off the table. The creditors “like what they are getting—they won’t want to appeal”, Bartell says.

If both the city council and Judge Rhodes approve Detroit’s proposed plan—which they are expected to do—the DIA will be spun off as an independent non-profit. The state of Michigan has teamed up with local and national organisations to pledge $816m over 20 years to the cause. The money would essentially fund a “buy-back” of the collection from the city of Detroit while providing pensions to retirees from the city’s police and fire departments. (Donors to the so-called Grand Bargain include the Los Angeles-based J. Paul Getty Trust, General Motors and the DIA itself, which pledged $100m.)

Update: A spokeswoman from the DIA declined to comment until the judge has issued his final opinion.
Source: The Art Newspaper

10/23/2014

Deloitte 2014 Art Market Report


The Deloitte 2014 Deloitte/Arttactic  art and finance report was release a short while ago. I have just downloaded the report and have to study or read the full report, but I did wish to share the report with readers.  In the past the reports have been very good as it looks at the art market for financial stakeholders such as wealth managers.

The good news is the report states wealth managers continue to a positive view on alternative asset classes, such as fine art. And, that has to be a good thing for the appraisal profession.

The Deloitte release on the report states "It is particularly interesting to see that the wealth management community is already responding to this new demand, with 88% of the family offices and 64% of the private banks surveyed said that estate planning around art and collectibles is a strategic focus in the coming 12 months." (underline added)

Follow the source link below to download the 130+ page report. The download page also has links for the 2013 and 2011 reports (no 2012 report is listed).

Deloitte reports
In last year’s report we identified an increasing sense of convergence in motivations among key stakeholders in the art market and in the wealth management community regarding art as an asset class.

Based on the findings of this report, the wealth management industry is clearly taking a more strategic view on art as an asset class and how it might be used as a tool to build stronger and deeper relationships with clients, in an increasingly competitive marketplace.

This year’s findings suggest that art buyers and collectors are increasingly acquiring art and collectibles from an investment viewpoint (76% said so this year, compared with 53% in 2012), which will most likely increase the need and demand for professional and wealth management services relating to the management and planning, preservation, leverage and enhancement of art and collectible assets.

It is particularly interesting to see that the wealth management community is already responding to this new demand, with 88% of the family offices and 64% of the private banks surveyed said that estate planning around art and collectibles is a strategic focus in the coming 12 months. This highlights that art related tax, estate and succession planning issues are increasingly becoming a hot agenda topic. Also, 50% of the family offices surveyed stated that one of the most important motivations for including art and collectibles in their service offering was due to the potential role it could play in a balanced portfolio and asset diversification strategy. 
Source: Deloitte

10/22/2014

Art Funds


Just yesterday I posted on 10 must know points about the current art market, with one of the points being interest in art funds will continue to grow.  Baron's recently published an article stating there was shrinkage in the number of funds with 72 globally, with a peak in 2012 of 115.

The Baron's article also states that art fund assets being managed has dropped by 40% since 2012 to an estimated $1.3 billion. It states part of the reasons for the decline is a lack of confidence due to poor financial regulations, although that appears to be changing. The last sentence sums things up, with a note that art funds are in decline, but its not terminal.

Baron's reports
There’s a shake-out under way among art funds, vehicles that invest in art and have hedge fund-like structures, high fees, and long-term lock-ups. Through the end of June, there were an estimated 72 art funds globally, with 55 in China and the rest in Europe and the U.S. That’s down considerably from the peak of 115 funds recorded in 2012, 90 of which were in China.

Assets under management also have declined, by some 40% since 2012, to an estimated $1.3 billion, according to a recently released report by London-based ArtTactic, a market research firm, and Deloitte Luxembourg.

“There is mixed confidence. There is a positive trend for art and wealth management, and a negative trend for art as an investment,” says Adriano Picinati di Torcello, Deloitte Luxembourg’s advisory and consulting director.

That’s probably because the unregulated art market and strong demand for art funds has attracted some scoundrels. Earlier this year, the Autorité des Marchés Financiers, France’s SEC equivalent, announced that it would bolster its scrutiny of nontraditional asset funds. The AMF said it would verify “a posteriori” that all risks attached to these investments are outlined.

The authority’s move came after an entity known as Marble Art Invest promised hundreds of investors a 16% per annum return on the resale of artworks, which, the French regulators noted, was “unrealistic in light of current interest rates.” The AMF fined the founder of the art fund one million euros ($1.3 million).

The U.K. has imposed similar regulations on marketing materials for “unregulated collective investment schemes.” Closer scrutiny in China revealed that 80% of the Middle Kingdom’s art funds were apparently finance vehicles for other investments; some even leveraged artworks to fund real-estate deals. China’s Ministry of Finance and others are working on a new regulatory framework for the rapidly growing Chinese art market. U.S. regulators have been quiet because the U.S. art fund scene has been quiet, too.

Perhaps it’s no surprise that the ArtTactic and Deloitte 2014 Art & Finance report cites “tougher regulation on transparency and marketing” as partly responsible for the waning supply of new funds, which, in turn, is “hampering confidence” with investors. Maybe so. But we expect that, once the hustlers have been chased from the scene, new regulation and oversight will create a second wave of art funds.

That’s because demand is still there. The Art & Finance report said that 20% of surveyed wealth managers had seen increased demand for art funds in the past 12 months, compared with 30% in 2012. Yes, that’s down from the previous year’s level, but still fairly robust. Furthermore, some 10% of the wealth managers’ clients will consider art fund investments, with 28% of art collectors also game. That sounds like pretty healthy interest to us, considering that art funds are a tiny subset of the hedge fund and private equity investments that account for just 14% of all portfolio asset allocations. So expect the reputable players to grow and spawn some quality new competition.

Phillip Hoffman is the founder of London-based Fine Art Fund Group, which has about $350 million in assets under management—more than a quarter of the total assets parked in art funds worldwide. Has demand for what he is doing cooled? Not at all, he insists. In fact, the Fine Art Fund Group could hit $500 million in assets by the end of 2015, with much of that growth coming from endowments, pension funds, and wealthy individuals who want their own funds. He’s also partnering with Chinese investors who want to establish new art funds that will comply with expected regulations.

The Fine Art Fund Group’s first fund, which matures in the next couple of years, has already returned initially invested capital to its investors. Real returns will come from the sales of the remaining assets. Says Hoffman: “We reckon 9% to 10% compound annualized growth. We’re never going to match the big private equity funds, but art funds are more about [portfolio] diversification.”

Not a bad return, in this environment, and the diversification pitch always sells well with the private banking crowd. So look for more growth in art funds in the medium term. “Regulation on one hand can be very good,” observes Deloitte’s di Torcello. “It builds investor confidence and requires more information disclosure. So we will get a more regulated product, which means nonprofessionals will get out of the market.”

In short: Art funds aren’t in terminal decline. They’re getting their act together.
Source: Baron's

10/21/2014

10 Must-Knows About Investing in Art


artnet News recently published a list of the 10 key itmes collectors should be aware of when investing in art.  The ten items include the following:

  1. Strong performance for 2014
  2. Most large sales take place in NYC
  3. The Chinese art market should remain strong in the long term
  4. You dont have to be a billionaire to invest in art, but it does have its advantages
  5.  Interest in art funds continues to grow
  6. Dont let your passion take over and overpay
  7. You can still be passionate about collecting and turn a profit
  8. Art lending is growing
  9. Art as an investment is a growing concept
  10. Transparancey will help the market
artnet reports

Berlin played host to the third edition of ArtFi, the Fine Art and Finance Conference, on Wednesday, welcoming influential panelists and art world insiders to the Tagespiegel newspaper headquarters for a day of high-tempo exchange on the latest trends and developments in the art market. Coinciding with Berlin Art Week, the conference's focus on art and money turned more than a few heads in the German capital, which is legendary for its extremely low concentration of collectors. But speakers such as Art Economics' Clare McAndrew, the Armory Show's Noah Horowitz, Art Stage Singapore's Lorenzo Rudolf, and the Fine Art Fund's Philip Hoffman, were greeted by a hall packed with international individuals hungry to get the inside scoop on the nexus of money and art. For those that couldn't attend, artnet News boiled the day down to 10 must-know bits of intel for investing in art.

1. Key players are bullish on art market performance in 2014.
While Clare McAndrew was hesitant to make any specific projections on the market in 2014 in her opening remarks for the conference, she expressed confidence that this year would see continued growth across the art market, over the €47.42 billion in market value for 2013 ("TEFAF Art Market Report Says 2013 Best Year on Record Since 2007, With Market Outlook Bullish"). That likely means that we'll see the market eclipse its pre-recession level of €48.07 billion from 2007 this year. McAndrew noted that some sectors of the auction market are up 20 percent over 2013, according to half-year reports, due to a strong spring auction season. Nevertheless, she cautioned that much of the market's worth and relative performance won't be decided until the fall sales wrap up in December.

2. Business is best in New York, but that doesn't mean you have to move there.
McAndrew also noted that 80 percent of sales over $10 million are occurring in New York, a city which continues to dominate the global art market, across the upper-end of the price spectrum. A&F Markets' Pierre Naquin explained in a later break-out session that much of this market dominance could be ascribed to favorable taxation terms in the United States in comparison to other major art markets. Naquin and McAndrew both agreed that the US remains one of if not the art market's most business-friendly locales.  Thus, a not-insignificant portion of what's calculated as the US market is in fact art that is imported to the country for sale. Naquin explained that due to art's relative portability compared to other hard assets, collectors and dealers are increasingly exploring the most favorable sales conditions internationally—something that has accounted for a sizable downturn in the European art market's growth—especially due to the Artist Resale Right (ARR) ("UK Art Dealers Are Dodging Artist Resale Rights"). McAndrew even referenced a sale in which a client determined it would be cheaper to crate and ship a work to the US rather than sell it in Europe, due to the ARR.

3. China remains a solid medium-term bet.
The Chinese market may have dropped 30 percent in 2012, but for those who take a slightly longer view, there continues to be much to win. The Chinese upper-middle class is expected to hit 55 percent for all urban populations by 2022, something which McAndrew cited as a foundation on which solid, long-term growth for the country's art sector could be built. Art fund manager and panelist Serge Tiroche has bet big on such projections for emerging economies with Art Vantage PCC. The fund currently has managed assets in the eight-figure range and is based solely on a privately held collection of contemporary art from emerging markets.

4. You don't have to have billions to get into the game, but it helps.
Throughout the conference, panelists continued to reference the fact that it's the extreme upper-end of the market that is seeing the highest levels of growth. Armory Show director Noah Horowitz noted the increasing death of mid-size galleries ("Are Mid-Size Galleries Disappearing, And Who's To Blame?"). And all four participants on this reporter's panel "Art as a Financial Asset"—Philip Hoffman, Shirin Kranz, Naquin, and Tiroche—more or less agreed that high-end contemporary is the place to put your money right now for the highest return when investing in art. But, McAndrew also noted that only 0.5 percent of the market is located above $1 million, so there's plenty of the room for relatively less well-heeled players to get into the game.

5. Interest in art funds continues to grow.
Fine Art Fund Group founder Philip Hoffman reported that interest in the securitized side of the art investment field continues to expand at a rapid pace. The group is in the process of closing out its latest, $200 million fund. That will bring their total managed assets upwards of $500 million. He reported that they are currently purchasing about $4 million in art per week and selling at favorable returns, with only approximately two percent of sales resulting in a loss. Perhaps surprisingly, Hoffman claimed that the greatest of those losses has been with the ever-buzzy Chinese contemporary market.

6. Put a damper on your passion for art when making purchases.
Despite Hoffman's success with the Fine Art Fund itself, he shared a cautionary tale from the art advisory side of the group's business: a collector who had recently spent €12 million on a group of artworks that, according to Hoffman's experts' calculus are worth no more than €7 million.  When passion for an artwork or artist gets in the way of strategic analysis of acceptable purchase price ranges, it can completely tip the scale from a moderate return on investment to a devastating loss.

7. But, don't think that passionate collecting and achieving moderate returns are mutually exclusive.
That said, private collectors can afford to spend slightly more on single works of art than an art fund might. So, with a bit of discipline, the right advice, and if all else fails, a trusty companion to rip the bidding paddle out of your hand, you could find yourself a member of what collector Sylvain Lévy said is a lucky sub-set of collectors who both get to enrich their lives with fantastic artworks and make some money in the process. Just don't think you'll end up the most popular collector in town. Berlin gallerist Johann König took Lévy to task when the panel was opened up to questions from the audience, regarding the collector's practice of selling 15 percent of his and his wife's collection every year.

8. Proliferation of art lending set to add further liquidity to European market.
Art lending has become increasingly commonplace in the US thanks to less regulation on how the collateralized piece of art is held. Would-be European art loan providers have to take physical possession of the artworks being lent against, which provides increased challenges and transaction costs. But that hasn't stopped Berlin's PrivatBank from being Germany's first to enter the field. The bank's Shirin Kranz, formerly of Phillips, said that the recently-opened sector allows galleries, collectors, and even artists to pull some liquidity out of their holdings without selling the works, whether as a bridge loan ahead of a sale or on a more long-term credit line basis. Considering the slump in the European market, it's liquidity that could help bolster the market's future.

9. Art exchanges and derivatized art investment products are coming but remain a distant prospect.
But what about taking art as an asset class to the next level? Can funds or other financial services firms create compelling collateralized investment products out of art? According to Pierre Naquin, yes, but we're in the very early days. Naquin started the Art Exchange in 2011, which allowed investors to purchase and trade shares of various artworks. Naquin says the exchange never really took off. But he was optimistic about the ways in which art analytics indices could be derivatized in the medium-term as banks and private investors alike become increasingly comfortable with art as a part of their portfolios.

10. Greater transparency in the art world is going to benefit everyone.
It's no secret that the art world is incredibly opaque—particularly on the primary market. In ArtFi's final panel, the Wall Street Journal's Mary Lane referenced a recent article in which she unpacked the rise of millennial artists like Hugh Scott-Douglas, Parker Ito, and David Ostrowski and just how thick a stone wall was placed in front of her when attempting to speak to some of the artists' dealers about their market values. But greater transparency in the art market is urgently needed. "Transparency and knowledge is only going to benefit everyone," artnet's own Cornell DeWitt quipped later in the panel. "It's either us in the art media or it's going to be the Feds."
Source: artnet

10/20/2014

London Frieze Week Auctions


The Wall Street Journal takes a look at the contemporary art market results from the London auctions during Frieze Art Week. The auctions, as usually is the case, had some strong lots and others which did not fair as well.

The Wall Street Journal reports on the sales
LONDON—Christie’s bested rival Sotheby’s and boutique house Phillips during a round of evening auctions last week that tested the contemporary art market before New York’s major November sales.

Sigmar Polke’s portrait of a Native American sold for $8.2 million, roughly four times the low estimate.

All three houses logged solid results overall, but critical tests of deceased or older artists for whom the auction houses are trying to develop markets were mixed.

The auction market during Frieze Art Week, the European art world’s most frantic week of buying held each October, was further boosted by a sale of 43 museum-quality works from the collection of Karlheinz Essl, an Austrian owner of DIY stores whose failed expansion into Turkey and Eastern Europe triggered the sale.

Mr. Essl’s auctioned works last Monday totaled $75 million, between the $64 million and $96 million pre-sale estimate. It burnished Christie’sgrowing reputation as the leader in liquidating large single-owner collections, a reputation that first drove Mr. Essl’s interest in having them handle the “painful process,” he says.

German painter Gerhard Richter fetched the top price but also suffered the most awkward moment in that sale: his four-paneled painting “Clouds (Window)” sold for $10 million but “Net,” a major abstract painting expected to sell easily, failed to reach its $12 million low estimate, prompting a funereal moment of silence from the audience.

Mr. Richter, 82 years old, was the world’s most expensive living artist at auction before Jeff Koons’s “Balloon Dog” sold last year for $58 million. Specialists expected demand for Richters to be boosted by his show at Marian Goodman’s new London gallery that opened last week with sold-out works priced between $76,000 and $4.4 million.

But buyers are establishing a pecking order for Mr. Richter’s older works, auction specialists and private dealers acknowledged after the auctions.

Though “Net” is an excellent example of Mr. Richter’s transition between blurring paint and using a squeegee, buyers shunned it because it wasn’t a “typical” Richter, says Christie’s specialist Francis Outred.

“The aesthetic wasn’t fashionable,” he said.

Mr. Richter’s drab camouflage-colored 1971 “Jungle Painting” stalled at Sotheby’s on Friday night under its $3 million low estimate.

The overall contemporary sale at Sotheby’s totaled $45 million, just above the pre-sale low estimate and below Christie’s’ $64 million total for its competing sale held on Thursday. Sotheby’s enjoyed a surprise hit in its side Italian sale on Friday when a private European collector paid $20 million for Piero Manzoni’s “Achrome,” a blindingly white 1958-1959 canvas.

Attempts to drum up market demand for two artists academically revered but ignored by buyers were lackluster, particularly for Cy Twombly and Anselm Kiefer.

Mr. Kiefer, 69, has always been a tricky sell given his heavily Nazi-themed works that frequently depict him giving the “Heil, Hitler” salute in a Nazi uniform. One of two Kiefers at Christie’s stalled at $563,000, far below its $660,000 low estimate. A Mandarin speaker paid $1.9 million for his 1999 work “Let a Thousand Flowers Bloom!,” a $981,000 loss on the work’s previous value but reflective of a trend amid Chinese millionaires to buy works confronting Maoist thought. A buyer at Phillips paid $1.3 million for “For Paul Celan,” Mr. Kiefer’s homage to the Nazi-persecuted Jewish poet.

Mr. Kiefer’s London dealer Jay Jopling also has taken an unorthodox step to bolster his artist’s soft market by involving an academic institution in a business deal, according to people familiar with the situation. In a move many art insiders would consider anathema, Mr. Jopling himself joined as a main sponsor, along with BNP Paribas, of London’s ongoing Royal Academy exhibition on Mr. Kiefer. Having works in a prestigious exhibition increases an artist’s public profile—and the value of the works.

Mr. Jopling has been quietly selling around seven of the works currently on loan in the show for approximately $750,000 each, according to people familiar with the matter.

Mr. Jopling’s former employee Tim Marlow joined the Royal Academy as director of artistic programs, a newly created position, five months before the show opened. The Royal Academy denied that Mr. Marlow’s transition influenced the show or the sales, of which it says it is unaware.

When asked to comment on the Royal Academy deal and his continued purchases at auction of expensive works by other artists he controls who suffer from soft high-end markets including Tracey Emin, 51, Mr. Jopling said he was “not in the mood” to discuss the matter.

Christie’s next month wants between $35 million and $55 million for a major Twombly abstract but a $24 million Twombly painting offered by Van De Weghe Fine Art at Frieze art fair failed to sell.

The Manhattan auctions begin Nov. 11 at Sotheby’s.
Source: The Wall Street Journal

10/19/2014

The Perelman Gagosian Battle


The NY Times takes a look at the battle and lawsuit between collector Ronald Perelman and gallerist Larry Gagosian. The lawsuit is supposedly going to expose the dirty side of the $60 billion a year high end art business. The article touches on the commodification of the high end art, auction guarantees and art speculation.  Really nothing new, and nothing that has not happened in the past, although the dollars involved is are certainly impressive. An interesting article, and worth the few minutes it takes to read.

The NY Times reports
Ronald O. Perelman slides into a chair in his office surrounded by proof of his “wall power”: an Andy Warhol print, a Roy Lichtenstein landscape and one of Cy Twombly’s giant squiggle paintings.

Mr. Perelman has collected art for as long as he’s been collecting companies. His trove of postwar and contemporary work, amassed over more than 30 years and spread among his Manhattan townhouse, East Hampton estate and 257-foot yacht, is estimated to be worth more than $1 billion.

Today, however, he wants to exhibit a different side of the art world. Through a lawsuit against his former friend and art dealer Larry Gagosian, Mr. Perelman has set out to expose what he calls the “dirty” side of the glamorous, opaque, $60-billion business of buying and selling high-end art.

“Art is such a beautiful thing,” Mr. Perelman told me recently in his first interview on the subject. “But it’s been sullied by an ugly business. It needs to be fixed.”

Mr. Perelman has his own share of critics, of course. This 71-year-old billionaire C.E.O. of MacAndrews & Forbes Holdings — which owns or controls companies including Revlon, Scientific Games and Deluxe Entertainment — is better known for his public divorces and hardball business tactics than he is for moralizing about market reform. He is one of the most sophisticated players in the art market, with his own special art fund and curator. He is the consummate insider.

In a statement, Mr. Gagosian’s lawyer, Matthew S. Dontzin, said that “Ron Perelman’s disingenuous claims that he is a crusader are nothing more than a cover for the fact that he is a notorious bully with a well-known history of filing meritless litigations who once again won’t pay what’s owed.”

Mr. Gagosian declined to comment for this article.

Still, whether or not they sympathize with Mr. Perelman, many dealers and collectors appreciate his well-funded effort — he’s spent millions on lawyers and a team of investigators. The art market, many say, is now driven more by speculation and trading than by long-term collectors or underlying value. Even as prices reach glittering new highs, with $58 million Balloon Dogs and $142 million Francis Bacon triptychs, art remains one of the world’s largest unregulated markets, with remarkably little disclosure or conflict-of-interest rules.

Auction houses, for instance, now use “third-party guarantees,” in which an anonymous investor or collector agrees to buy a piece before auction at an undisclosed price. Those investors can also bid on the work and get a share of profits if it sells to someone else for a higher price. Dealers commonly buy back work from their own artists to support prices, collectors and gallerists say. And more top works are being bought, traded and sold by groups of individuals with undisclosed business ties.

“The market has certainly become more commodified,” said David Nash, the New York gallerist and former Sotheby’s executive, who isn’t involved in the Perelman-Gagosian feud. “Art’s considered much more of a tradable asset now. I would agree there is a need for greater transparency.”

Back in 2011, Mr. Perelman and Mr. Gagosian were close friends and had been for more than 20 years, attending parties and charity events together and partnering on a restaurant in the Hamptons, the Blue Parrot.

Mr. Perelman had bought or sold nearly 200 works of art through Mr. Gagosian, helping Mr. Gagosian become one of the world’s most powerful dealers, with more than $1 billion in sales and galleries in New York, London, Paris, Hong Kong, Rome and other cities. In turn, Mr. Perelman built a collection of prized works that have soared in value over the last decade.

One afternoon in April 2011 at Mr. Gagosian’s gallery on Madison Avenue, Mr. Perelman was captivated by a shimmering blue Twombly painting on the wall; it was titled “Leaving Paphos Ringed With Waves.” Mr. Gagosian said it was valued at around $8 million. Mr. Perelman offered around $6 million.

According to court filings, Mr. Perelman approached Mr. Gagosian a little more than a week later with another offer. But Mr. Gagosian had already sold it — to an entity based in the Cayman Islands controlled by the Mugrabi family, megacollectors who often partner with Mr. Gagosian to buy and sell art. The Mugrabis bought it for $7.25 million, paying in part with their ownership stake in artwork also co-owned by Mr. Gagosian.

Mr. Gagosian didn’t tell Mr. Perelman who the buyer was. But he told Mr. Perelman that if he still wanted to buy the piece, the new price would be $11.5 million. In September, Mr. Perelman agreed to pay $10.5 million, giving the Mugrabis a quick $2 million profit and Mr. Gagosian a $1 million commission.

The deal shattered their friendship. Mr. Gagosian and Mr. Perelman sued each other on the same day in 2012. In his suit, Mr. Gagosian accused Mr. Perelman of breach of contract, saying he failed to adequately pay for the Twombly and other works, offering cash and “unwanted” art in exchange that fell $1 million short of the promised payment. (That suit was withdrawn, but Mr. Gagosian still says he was never paid in full.) In suing Mr. Gagosian, Mr. Perelman contended fraud, saying the Mugrabi sale was a “sham” aimed at jacking up the price.

“The striking jump in price, the lightning-fast chronology of events and the absence of a typical invoice for the sale, all call into question the propriety and bona fides of the sale,” Mr. Perelman’s lawyers said in court filings.

Mr. Perelman declined to comment on the case’s specifics or on Mr. Gagosian, but said his desire to shine a light on the market went far beyond his Twombly purchase. “This is the tip of the iceberg,” he said. Mr. Gagosian’s lawyers say the Mugrabi purchase was an “arm’s-length transaction” supported by all the proper invoices and documentation.

In the last few months, Mr. Perelman has turned the art world upside down. His lawyers have sent subpoenas to some of the biggest players in the business and sent art experts to galleries and dealers and even to visit artists. He subpoenaed members of the Mugrabi family. (Jose, David and Alberto Mugrabi gave depositions last month.) He has also submitted subpoenas to the auction houses Sotheby’s and Phillips, according to court filings.

He’s even enlisted a former F.B.I. agent who is well versed in the art business to interview big collectors and dealers, according to two gallery owners. Major artists close to Mr. Gagosian have also been questioned, these gallerists say.

According to court papers, Mr. Perelman is seeking information related to dealers, collectors and investors who deal with Mr. Gagosian. Mr. Gagosian’s lawyers say the interrogation is an effort to “harass Gagosian and disparage the gallery.”

Mr. Perelman has already spent an estimated $3 million or more on lawyers and research. A settlement looks unlikely. At a recent mediation session ordered by the court, Mr. Perelman and Mr. Gagosian sat in the same room, but didn’t speak to each other.
Source: The NY Times

Good, Better, "Best" Appraiser Workshop

The Gallery at the Potomack Company before an auction
We now have registrations for 14 of the 15 available seats for the Nov 8 & 9 Good, Better, Best Appraiser Workshop, plus a lot of inquiries and interest.

We now only have a few weeks to go before the workshop. With only a couple of seats still available seats, and if you or a fellow appraiser are interested in attending, I highly recommend to register sooner rather than later and risk being put on a waiting list.

As I mentioned in earlier posts, please keep in mind this is not a lecture based workshop, but a program with guided discussions and hands on inspection of items of interest to each participant. Yes, as a class we will look at a mixture of antiques, contemporary pieces, Asian and fine art. Additionally attendees will also get to review and inspect any items of interest which are on hand in the Potomack Company gallery.

As a group we do interesting things such as comparing a good antique to one which has been restored or altered, or compare a revival example to a period example. We put items under an ultra violet light to detect damage and repairs. During day 1 of the Workshop we also discuss worksheets, forms, tools, market trends, dealing with clients, and other appraisal management practices. We will also discuss contracts, fees, preparations logs and many other documents, websites/links for finding values, and glossaries useful to the personal property appraiser.

This is an excellent opportunity for experienced appraisers who wish to expand their specialty areas by participating in a hands on program to inspect personal property of interest and expand their knowledge base. It works equally as well for the new appraiser looking for methods and tips on inspection and who just might need hands on training and confidence to make their practice take off.

We award 16 PDCs for the class, with half the credits within the valuation area to assist with USPAP qualifications/re-qualification. If you are not interested in taking the class, please tell a fellow appraiser or a new appraiser in you region about the workshop.

This is a unique workshop, as it has been planned as a discussion based program, not a day of lecture and slides, but actually classroom and instructor interactions along with hands on identification training from the on hand consignments at the Potomack Company. This is a one of a kind program.

Feel free to reach out to Jane or me or CLICK HERE for more information, but dont wait long, as the available seats are limited.


Announcing
The Good, Better, "Best" Appraiser Workshop

Saturday November 8th and Sunday November 9th, 2014
at
THE POTOMAC COMPANY AUCTIONEERS
1120 North Fairfax Street 
in beautiful downtown Alexandria, VA.


Are you aware of the most sustainable income generating markets for appraisers that will guarantee consistent income for the next 10 or 15 years? Are you scheduling jobs back to back and hiring other professionals because you are swamped and need help to keep up?   Are you ready to learn the insider secrets, strategies and what really works in your profession?  Are you knowledgeable in your field but don't know how to do the business and make money?  Are you ready to become a competent and qualified appraiser accumulating status and repeat business with the IRS, CPA's, Trust Officers, Insurance Companies, Financial Planners and Bankers?

Never before has there been a more exciting time like this for appraisers. This workshop is something for you to get excited about!  You won't be disappointed.

This very unique “hands on” workshop teaches the Appraiser how to:

Session One:
Close the Sale and Determine The Scope of Work
Prepare Contracts and Obtain Deposits
Prepare for the On-Site Inspection and Learn How to Deal With Client Challenges
Research Using New Methods and Learn New Technological Techniques
Learn About Valuation Theory.  (Appraisal Foundation's proposed course requirements).

Session Two:
Simulate an Appraisal Inspection
Learn Property Identification and Analysis Techniques
Advance Product Knowledge and Advance Specialty Area Knowledge
Learn How to Use Ultra Violet Light to Detect Restorations
Learn How to Write Property Descriptions and Condition Reports

You will receive sample contracts, forms, glossaries and documents which are used everyday by successful and experienced appraisers and be provided with a CD of all forms and they will also be included in your Course workbook.  You will receive 16 Professional Development Credits and a Certificate of Completion.

Attendees will have the rare opportunity to completely inspect and study the furniture, fine art, sculpture, decorative arts, porcelains, pottery and much more at the Potomac Company Auctioneers.

The workshop is a natural progression after taking the Core Courses because it is designed to get the appraiser into the mainstream appraisal profession fast.  New Appraisers will have the opportunity to simulate an appraisal inspection and gain the confidence and skills needed to act like old pros, while old pros will add new skills needed to expand a practice and advance your qualified status in the appraisal industry.  We teach you how to do the business in the real world and cut through the mustard!

The workshop instructors are Todd Sigety, ISA CAPP and past President of The International Society of Appraisers.  Todd is also the Director of Appraisals for Potomac Company Auctioneers.  Jane Brennom, ISA CAPP past President of The Gulf Coast Chapter and past core course instructor for ISA.

Contact us for pricing and availability. We purposely keep the class sizes small to enhance interaction and discussion during the workshop. Click on the link below to check out who we are, about the workshops, and for further information and registration. Website:   www.appraiserworkshops.com or call us now at 703-836-1020.
Registration information is on the Appraiser Workshops website, just follow the source link.

Source: The Appraiser Workshops