AUCTION HOUSES ATTEMPT TO SETTLE SUITS AND END INVESTIGATIONS AT A PRICE TAG OF OVER $582 MILLION
AUCTION HOUSES ATTEMPT TO SETTLE SUITS
Just this week, it was reported that Christie’s and Sotheby’s are attempting to settle their civil antitrust and shareholder cases to the tune of $582 million.
Its former chairman Alfred Taubman will pay most of Sotheby’s tab, according to the company’s statements.
Taubman recently had his son Robert Taubman replace him as chairman, over the objection of Ronald Baron, who heads up a mutual fund which is the largest Sotheby’s stockholder. Baron had wanted the firm to distance itself from Taubman’s reported actions in the antitrust matter in order to get the stock price moving in the right direction again. As reported in past newsletters, Baron was able to get four allies appointed to Sotheby's board, but he was still out-voted by Taubman board members.
In an interview with the Wall Street Journal, Baron also said he had been told that Alfred Taubman blocked a takeover bid by LVMH Moet Hennesy Louis Vuitton -- at about 2 1/2 times the share price. The bid was reportedly made last September, before the scandals erupted and the stock price fell.
Plaintives in the civil antitrust suit will get $256 million from Sotheby’s and an equal amount from Christie’s. Taubman will pay $156 million for his part of the Sotheby’s bill, and the company will shell out an additional $50 million in cash and $50 million in discount coupons to plaintiffs.
Sotheby’s will attempt to close on the shareholder action by paying the plaintiffs $30 million, which will be repaid by Taubman and an additional $40 million in Sotheby’s class A common stock, which is actually up over 24. That’s 10 points from its bottom when the scandal hit this past spring.
According to the Wall Street Journal, there is a serious possibility that Taubman may sell some or all of his 13.2 million shares of the company to pay for his share of the settlements. But a spokesman for Taubman called the report "an interesting extrapolation of a statement that really, he is just looking at his options."
Several sources now report that a number of financial analysts feel Sotheby’s is now a possible take-over target due to the situation.
Sotheby’s also said it was in “serious negotiations” with the U.S. Justice Department. Michael Sovern, chairman of the holding company, noted optimistically, “With a Justice Department resolution in prospect, the company can move forward with its business under the strong leadership of its current management team.”
Meanwhile in a statement of equal optimism, Christie's International Plc Chief Executive Edward Dolman said: "Our company is in the strongest shape it has ever been...The settlement will have no impact on our operations." He also noted that Christie's had cooperated fully with the U.S. authorities in their investigations.
Unfortunately for both, international auction clients have also filed a multimillion-dollar lawsuit seeking class-action status against Christie's and Sotheby's auction houses. The new suit, which uses a strategy in which plaintiffs from countries without class-action litigation instead file claims in U.S. courts, makes the same allegations of price-fixing as the cases being settled.
And more bad news for Sotheby’s, Standard & Poor’s ratings remain on CreditWatch with negative implications, pending resolution of the antitrust litigation by the Justice Dept.
The New York Museum of Modern Art has settled with its 20-week strike with its union. The strike ended after a 15-hour marathon negotiation, which led both sides to claim victory, but it doesn’t look like the museum has much to celebrate about…The International Center of Photography's 94th street facility has been sold for $17.5 million and is being turned back into a home. The center is moving its operation to ICP Midtown at Sixth Avenue and 43rd Street, which is currently undergoing renovations and is scheduled to reopen with four exhibitions: "Reflections in a Glass Eye: Works from the ICP Collection," "Annie Leibovitz: Women," "Lorie Novak: Collected Visions" and "New Histories of Photography 1: Daguerreotypomania," all running Nov. 3-Dec. 31… An attempt to sell an autopsy picture and crime scene photographs of three slain boys has prompted eBay to change its policy on graphic photos. Under the new policy, “eBay may in its discretion, remove items and refund listing fees when the item or description graphically portrays violence or victims of violence, and lacks substantial social, artistic or political value. For example, eBay may disallow sales of explicit crime scene photographs or morgue photos, while permitting military documentaries or photographs of war victims. Further, eBay will remove any listing and suspend the users involved where it appears that a person convicted of a violent felony is attempting to use eBay (directly or through another person) to benefit financially from his or her criminal notoriety.” The change came after a mother saw her dead eight-year old son in a picture being sold on eBay and after the national victims' rights organization Parents of Murdered Children complained.
Clarification on Vision Gallery
After last month’s newsletter on my visit to San Francisco, I receive an email from my friend Neil Folberg, who thought my readers might have been confused over the fate of Vision Gallery.
As Neil noted to me, “You might have mentioned that Vision is still around, albeit in Jerusalem. Our next major show will be a full-blown show of Michael Light's ‘Full Moon’ prints, running from November 12th through January 14th. Michael's work will be shown along with a selection of my newest Starry Night's imagery and a small group of David Malin's prints of astronomical subjects. ”In addition,” he continued, “I have a show of new work from ‘Starry Nights’ opening November 2nd at Scott Nichols Gallery in San Francisco.” Vision/Neil Folberg Gallery is located at 18 Yosef Rivlin St., 91020 Jerusalem, Israel; Tel:+972-2-622-2253;Fax:+972-2-622-2269; email@example.com