New York’s Folk Art Museum to turn over more than 200 works for auction
Sotheby’s is due to sell off the collection of the museum’s former chairman Ralph Esmerian to cover his debts, despite complaints from Christie’s
By Julia Halperin. Web only
Published online: 25 April 2013
The American Folk Art Museum, New York, whose former midtown home is poised to be demolished by the neighbouring Museum of Modern Art, is due to surrender more than 200 works from its collection to be auctioned to cover debts amassed by its former chairman.
The collector Ralph Esmerian, the former owner of jewellery retailer Fred Leighton, who is currently serving a six-year prison term for wire fraud and other charges, promised 263 works of folk art to the museum in 2005. But he used some of the same works as collateral to secure multi-million-dollar loans from Sotheby’s and Christie’s. Late last month, Manhattan’s US Bankruptcy Court approved a settlement with the museum that allows it to retain 53 of the promised works. The rest of Esmerian’s paintings, sculptures, and scrimshaw will be sold at Sotheby’s in December 2013 or January 2014 to repay his creditors, according to court papers.
Under the terms of the agreement, the Folk Art Museum’s curators were free to choose the most significant works of folk art from the promised gifts. Many of those, including the 1848 painting Situation in America, by an unknown artist, were recently on view at the exhibition “Compass: Folk Art in Four Directions” at the South Street Seaport Museum.
The trustee in charge of liquidating Esmerian’s estate has chosen to sell the rest of the collection through Sotheby’s, sparking the ire of rival Christie’s, which filed an objection to the settlement on 15 March. Christie’s lawyers claim that Sotheby’s intimidated the trustee into granting it authority to auction Esmerian’s collection.
“Esmerian, who went to jail for doubly pledging collateral to his creditors, apparently defrauded his victims in a similar manner by doubly promising exclusivity rights to both auction houses,” Christie’s wrote. Having reached a private settlement with the trustee after filing its own objection to the settlement, “Sotheby’s was willing to forego its inflated claim in exchange for becoming the auctioneer of the Trustee Art without having to compete for the business.”
Both Christie’s and Sotheby’s declined to comment further on the arrangement. A call to the trustee, Jay Teitelbaum, was not returned. A conference with the trustee, the bankruptcy judge, and Christie’s is scheduled for 23 July.
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