The Art of Bankruptcy: Part 2
Fourteen months after federal regulators seized Miami's Southeast Bank, one of the nation's oldest and largest corporate art collections still sits under wraps in a downtown warehouse.
But now a new bankruptcy trustee says he wants to liquidate the 4000-piece collection using a novel strategy. Rather than sell the Southeast Bank art at auction, William Brandt plans to ask a judge for permission to open a retail store where customers can browse among works by internationally prominent artists Frank Stella, Robert Rauschenberg, Andy Warhol, Jasper Johns, and Claes Oldenburg, among others. The store might remain open for a year or more, until all the pieces are sold.
Creditors who have filed more than $350 million in claims against Southeast Banking Corp. -- the defunct bank holding company that owns the artwork -- have not opposed the scheme. And while Brandt concedes he's never heard of a bankruptcy administrator selling a big art collection a la Wal-Mart, he's convinced that by Christmas he'll win approval in federal bankruptcy court from Chief Judge Sidney Weaver. Brandt says he currently is negotiating with several landlords to lease 15,000 to 30,000 square feet of floor space at an undisclosed location in Dade County.
The Southeast collection, painstakingly purchased over three decades for approximately $5.8 million, adorned the walls and foyers of branch banks throughout Florida. With the New York art market and much of the U.S. business world in recession, a generous price for the artwork will be hard to find. Brandt contends that a slow liquidation of the Southeast art will generate more money than an auction, even considering the cost of leasing and staffing a gallery.
Some local art experts suggest Brandt's retail strategy is crude and lowbrow. "They're clowns," says Brandt of his critics. "They don't do this for a living, and they should stay out of the way. They really aren't players here. For them to suggest that this is an unsophisticated approach belies their own lack of sophistication. We're talking about fifteen to twenty pieces in this collection that are truly museum quality. Those we will probably sell through a national auction house. The rest of the stuff is basically office art."
"He's wrong on that," contends Lisa Austin, who acquired a substantial part of the collection for the bank while serving as Southeast's fine arts director from 1977 to 1989. "We had five museums interested in showing that collection. A huge portion of the collection has been considered museum quality. To this day I get calls from people and corporations that want to buy bits and pieces. Now, it's true that there are levels of quality within the collection. Some of the art is merely decorative, a small portion is world class, and the majority is just extremely good quality, though perhaps not absolutely tiptop."
Austin is less prepared to argue with Brandt's unorthodox approach to bankruptcy liquidation. A year ago she worried that Brandt's predecessor, former Southeast trustee Jules Bagdan, might dump the collection overnight instead of intelligently marketing it. (Instead, Bagdan himself was dumped from his position amid rumors of improprieties in his handling of bids for the sale of an airplane owned by a Southeast subsidiary. Later, in a motion objecting to his $1.5 million bill for the Southeast liquidation, the Federal Deposit Insurance Corporation accused Bagdan of failing to collect the Southeast artworks in a timely fashion, resulting in legal "wrangling" over its ownership.) By choosing not to rush the sale of the Southeast artwork, Brandt may wind up getting a better price for the pieces. Also, his method may keep ownership of a large number of the works at home in South Florida.
While saddened that the art must be sold at all, Austin is largely resigned to Brandt's plan. "This is really an ignoble end to this collection," she says. "However, it's [Brandt's] deal, frankly. If he wants to sell it that way, okay. I'll be very curious to see how they handle pricing. Are they going to have little grocery carts? If they want to sell this collection in a store, I'll be first on line."
Sources say that America's two biggest auction houses fought like weasels to handle the Southeast Bank art. Although a Sotheby's representative didn't return phone calls, Mary Hoeveler, regional director for Christie's Fine Art Auctioneers, says she can't say whether or not she's disappointed the bankruptcy court may forgo a big auction. "I have a basic idea of the extent of the collection," says Hoeveler. "Not really being able to comment on all the pieces, it's difficult to say which should be sold at auction and which shouldn't, and if what [Brandt] is doing is appropriate or not."
Brandt concedes he's never heard of a bankruptcy trustee selling a collection a la Wal-Mart, buthe's convinced he'll win approval.
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