Lehman Brothers to Auction Art Assets

In a recent conversation with a group of artists, the question came up of what will happen to all the art that bankrupt corporations such as Lehman Brothers and AIG have collected? Would the companies keep it among their last remaining assets, would the government have the sense to take it as collateral on bailout funds, or would it go on the auction block? Today we have an answer.

The Guardian is reporting that Lehman Brothers is planning to sell off about $8 million worth of art, including a lot of modern and contemporary work.

"According to Bloomberg, the Lehman collection has more than 3,500 pieces. The Neuberger Berman collection has another 900 works, including pieces by Marlene Dumas, Andreas Gursky, Takashi Murakami, Neo Rauch and Sam Taylor-Wood."

The story also states that companies that bought up parts of Lehman Brothers, such as Barclays and Bain Capital, will be allowed to keep the artworks located on the premises of Lehman Brothers divisions they now own for a full year. After that time, they will be permitted to cherry-pick which artworks to keep, and the rest will go on auction.

Finally, the Guardian reports that Lehman Brothers is seeking court permission to pay its art storage facilities and art handlers, so that the work these companies have on site can be released for sale. Right now, those warehouses are (wisely) hanging onto the LB assets in their possession in case they don't get paid.

It will be interesting to watch how this plays out, particularly since auction sales this fall have already dropped dramatically. Will Lehman be able to successfully unload the collection? Will a few moneyed people who kept cash under their mattresses be able to buy it up for a song? One thing's clear, which is that the flood of art on the auction market is going to further undercut gallery business. Will it be good for the museums, who often find they can't afford the best examples of work for their collections? We'll have to wait and see.