Word: auction
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Most top private dealers dislike the system of guarantees and loans. "It creates an immediate conflict of interest," says Julian Agnew, managing director of the London firm of Agnew's. "If the auction house has a financial involvement with both seller and buyer, its status as an agent is compromised. Lending to the buyer is like margin trading on the stock market. It creates inflation. It causes instability...
Criticism of auction-house guarantees and loans has been particularly widespread in the past few weeks, ever since it was disclosed that Sotheby's had lent Australian entrepreneur Alan Bond $27 million in 1987 to buy what became the most expensive painting of all time, Van Gogh's Irises. But Sotheby's defends its policy as right, proper and indeed inevitable. Guarantees are given "very sparingly," CEO Ainslie said last week. "It is unusual for more than one or two paintings in a sale to be guaranteed." Ainslie rejects any comparison to margin trading. "We do not make...
Sotheby's feels it is being arraigned for the crime of high success. David Nash, head of its Fine Arts division, told the Washington Post that critics, far from being elitist, have "a hostile proletarian attitude toward our business." (Let 'em eat Braque.) But auction-house pretensions to be self- regulating have collided with the skepticism of Angelo Aponte, New York City commissioner of consumer affairs...
Aponte's version is different. Consumer affairs found "gross irregularities" in art auction houses, he says. Chandelier bidding amounted to "an industry practice, both above and below the reserve." (A chandelier bid above the reserve violates present rules.) Aponte was also concerned about the practices of not announcing buy-ins and of keeping reserves secret. The auction houses held that if bidders knew what the reserve on a lot was, it would chill the market. Art dealers, lobbying the agency, maintained that the reserve should be disclosed and that bidding should start...
Because the auction houses trade in volume and compete intensively for material, they can sometimes be an unwitting conduit for fakes, particularly in ill-documented but now increasingly expensive areas of art. Few forgers would be dumb enough to try to send a fake Manet, let alone a forgery of a living artist like Jasper Johns, through Sotheby's or Christie's. But where fakes abound, some will inevitably turn up at auction; and where millions of dollars abound, fakes will breed...