Word: interests
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Dates: during 1980-1989
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Loans to the buyer are made before the auction, and completed after it, at an interest rate that may go as high as 4% over prime. A common amount is 50% of the hammer price -- whatever the work reaches...
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...
...happy from a legal standpoint," says Aponte. "O.K., Sotheby's says in its catalog that it offers financial services, but I'd like to see disclosure of the entire commitment. I would like to know if it is part owner of a painting, and if it has a fiduciary interest, I want to know what it is. If it lends Bond $27 million, I want that fact in the catalog...
...Bond. Why this maneuver? Because, says a bank source who analyzed the lease after it was issued, Bond had found a tax loophole. Under Australian tax law, you could lease any asset -- say, a tractor -- from its owner and get a tax deduction for all payments of principal and interest, as long as you had no right to the asset at the end of the term. (The law, needless to say, was framed to help undercapitalized businesses that cannot afford new tractors, not financiers who want to turn a Manet into a tax loss.) Bond had the Manet from Chemical...
Mitsubishi Estate Co.'s purchase of controlling interest in the Rockefeller Group last month set off even more worrisome reports. JAPANESE BUY HEART OF N.Y., declared the Dallas Times Herald. "The roll call of all-American icons falling into foreigners' hands added a new name yesterday," reported Newsday. "When the whole house is being sold off, it doesn't matter much that a cherished heirloom goes as well," sobbed the San Jose Mercury News. The Sacramento Bee carried a photo of "delighted" Japanese tourists gazing at the property now controlled by "their countrymen...