Auction House

Art Forgery Trial Asks: Were Dealers Duped, Or Did They Turn A Blind Eye?

“Art Forgery Trial Asks: Were Dealers Duped, Or Did They Turn A Blind Eye?”

by Joel Rose via “NPR

The Knoedler & Company art gallery, shown here in 2010, had been in business  since before the Civil War. The gallery permanently closed its doors in 2011.

The New York art world was shocked when the city’s oldest gallery abruptly closed its doors more than four years ago. A few days later, news broke that Knoedler & Company was accused of selling paintings it now admits were forgeries for millions of dollars each. The gallery and its former president face several lawsuits by angry collectors and the first trial began this week.

The forgeries at the center of the scandal look like masterpieces by Jackson Pollock, Willem de Kooning and other prominent abstract expressionists. They were good enough to fool experts, and even Ann Freedman, then-president of Knoedler & Company, says she was duped.

Her lawyer, Luke Nikas, says, “Ann Freedman believed in these paintings. She showed them to the whole art world. She showed them to experts. And she has piles and piles of letters from all of these experts informing her that the works are real.”

Nikas says Freedman even bought some of the paintings for her own personal collection. But the plaintiffs in this case and other pending lawsuits say Freedman overlooked glaring problems with the paintings’ backstories. The art dealer who sold the paintings to the gallery, a woman named Glafira Rosales, pleaded guilty to fraud and money laundering charges in 2013. According to Freedman, Rosales told an elaborate story involving a European collector (known only as “Mr. X”) who bought the paintings with cash in the 1950s, when he was having an affair with an assistant at two top New York galleries.

“It’s quite a tale, and people bought it,” says Amy Adler, who teaches art law at New York University. “I suppose the temptation would be there — not just for buyers, but, yes, even for sellers — to think they’d happened upon these magnificent, undisclosed masterpieces.”

In the end, Rosales admitted to selling Knoedler 40 counterfeit paintings over more than a decade. The plaintiffs argue that Freedman knew — or at least should have known — that something was amiss. It’s hardly the first time an art dealer has been accused of deliberately looking the other way.

Ken Perenyi is a professional art forger who wrote about his career in the book Caveat Emptor. “From over 30 years’ experience with art dealers,” he says, “I would say there most certainly are individuals out there in the trade that will turn a blind eye.” . . .

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Art World Prepares for a Challenging Year

“Art World Prepares for a Challenging Year”

by Scott Reyburn via “New York Times

So now it’s official: The latest art market boom has peaked, according to figures from Christie’s and Sotheby’s, the two biggest international auction houses.

In late January, the companies released their 2015 results, with each reporting a slight decrease in year-over-year sales. It was the first year since 2010 that both failed to show an increase.

Christie’s, a private company based in London, reported auctions and private sales of 4.8 billion pounds, or about $6.8 billion in 2015, a decline of about 5 percent from 2014. Equivalent sales at Sotheby’s, which is publicly traded and based in New York, were $6.6 billion, about 1 percent less than in 2014.

Those figures do not represent a burst bubble, or even a serious correction, but they do suggest that 2016 is going to be a challenging year for the art market, reflecting the volatility and uncertainty of the wider world.

“The froth has been skimmed off,” said Paul Ress, the chief executive of Right Capital, which provides loans secured by art to dealers and collectors. Mr. Ress said that the collapse in the price of oil has taken “a huge amount of cash” out of the art market.

Photo

Peter Doig’s 1991 canvas ‘‘The The Architect’s Home in the Ravine.’’ CreditPeter Doig. All Rights Reserved, DACS 2015

“There aren’t so many Russians and Brazilians involved now, and the Chinese slowdown has had a knock-on effect on the raw materials and equity markets,” he said. “The potential buyers in the art world won’t be feeling as rich as they did last year.”

An examination of Christie’s results reveals key shifts in the market in 2015. Bolstered by huge one-off prices in New York for trophy works by artists like Picasso and Modigliani , auction sales of Impressionist and modern art were up 57 percent to £1.3 billion, while those of postwar and contemporary art — the main driver of growth from 2009 to 2014 — were down 14 percent to £1.5 billion. Year-over-year sales of old master paintings and 19th-century and Russian art shrank 37 percent to £154.9 million. . . . .

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Art auction records shattered in London

“Art auction records shattered in London”

by Motez Bishara via “AlJazeera

It took a breathtaking span of 26 hours in London for more records to fall in the thriving global art market.

Works by Gerhard Richter, Lucio Fontana, and Cy Twombly were among those that set the pace at the post-war and contemporary art sales hosted by Christie’s and Sotheby’s.

The highest priced lot took place on Tuesday when Richter’sAbstraktes Bild surprised the packed auction room on Bond Street with aggressive phone bids coming in at 2 million British pound increments ($3.1m).

The final sale price of 30.4 million pounds ($46.8m) established a new auction record by a living European artist.

The anonymous bidder, reported to be an American, was represented by Sotheby’s

worldwide co-head of contemporary art,

Cheyenne Westphal.

“I think I can genuinely say it went to someone who truly wanted this painting, and he was set on buying it tonight,” Westphal said, noting Richter also happened to be her favourite artist.

A sister painting of the large abstract work was sold by

Eric Clapton in 2012 for a then-record of 21 million pounds ($32m).

The artwork, which measures 3 x 2.5 metres draped with jagged lines of reds and greens, was last sold on auction at Sotheby’s in 1999 for $607,500, generating a return of 32.4 percent annually.

“Richter is not hot all of a sudden, he has always been sought after,” said Arianne Levene Piper,

founder of the New Art World consultancy

.

“There are plenty of ultra-high net worth collectors who are willing to pay for top works.

This explains why a great painting by a great artist will sell for high prices at auction.”

Works by another European artist, Francis Bacon, failed to make headlines this auction season, despite drumming up a buzz prior to the sales.

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Sotheby’s Brushes Up Its Image With London Auction

“Sotheby’s Brushes Up Its Image With London Auction”

by Mary Lane via “WSJ

The sale of Gerhard Richter's ’Abstract Picture, 599’ for $46 million set an auction record for the German artist.

LONDON— Sotheby’s shook off doubts stemming from the ouster of its chief executive late last year, earning this past week its highest total for artwork auctioned in London from its contemporary art department.

The company’s annual February auction Tuesday totaled $188 million, representing a 31% increase from 2014’s February sale.

In November, William Ruprecht stepped down as Sotheby’s CEO, following a monthslong campaign by hedge-fund activist Dan Loeb to shake up the company’s management. Mr. Ruprecht’s handling of the contemporary art division was a focus of criticism.

On Friday, Sotheby’s said it wouldn’t be paying a special dividend initiated last year, saying it wanted to preserve “flexibility” in its “capital allocation” while searching for a new chief executive.

Tuesday’s auction result, within Sotheby’s $136 million to $193 million pre-sale estimate, helped the publicly traded auction house beat privately owned nemesis Christie’s, which sold $178 million worth of art on Wednesday, down 16% from a year earlier.

Asian and Middle Eastern participation in Sotheby’s evening session on Tuesday was low, with only 9% of buyers from that region. But South American participation doubled from last year, with 37% of buyers coming from South and North America combined. At Christie’s, about a fifth of buyers were from Asia and the Middle East, with Europe and North America accounting for about half.

The week’s biggest art sale was Gerhard Richter’s 1986 painting “Abstract Picture, 599.” It sold over the phone to Ken Griffin, founder of investment fund Citadel, at Sotheby’s for $46 million, according to people familiar with the matter. The purchase was highly unusual for the billionaire, better known for collecting more mainstream artwork, including Impressionists. Mr. Griffin broke the previous Richter record of $37 million set by Sotheby’s in May 2013. The 118-inch by 99-inch work, featuring a metallic-looking paint that glistens, drew its second-highest bid from a private collector working through Gallus Pesendorfer, a Cologne-based specialist who typically works with German buyers.

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“How Christie’s Is Winning the Art Auction Wars”

“How Christie’s Is Winning the Art Auction Wars”

by Diane Brady via BloombergBusinessWeek

Untitled, by Martin Kippenberger, sold for $18.6 million, the highest bid at Christie’s May 12 auction

“Christie’s, the 248-year-old auction house, is taking off its suit and putting on some ripped jeans. To promote its May 12 auction, If I Live I’ll See You Tuesday, the company posted a YouTube video of skateboarder Chris Martin careening past multimillion-dollar art to the indie hit Sail by Awolnation. The curator, Loic Gouzer, a handsome contemporary art expert who’s been linked to Mad Men star January Jones, hyped the works on his Instagram feed. Last July, Christie’s held a charity sale hosted by Leonardo DiCaprio (who happens to be a friend of Gouzer’s). And during 2013 it ran 49 Web-only, youth-friendly auctions—prints went for as little as a few hundred dollars. The initiatives have helped bring in a record $7.1 billion in sales in the past year, compared with $6.3 billion at rival Sotheby’s(BID).

All this was dreamed up by Christie’s chief executive officer, Steven Murphy. Unlike his competitors, Murphy has no prior fine art expertise (or noble European lineage) and says that selling artists’ work isn’t that different from his former jobs as president of Angel Records and publishing house Rodale. Soon after he arrived at Christie’s in 2010, he began allowing buyers to bid on works online. It seems obvious, but for a fusty auction house it was a revolutionary tactic. . . . .”

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