The Risk of Buying and Selling at Auction

The Case of the Marc Chagall Painting

The New York Times published a story recently about a painting by Marc Chagall on the verge of being destroyed, because a committee of experts in Paris declared it a fake. The story should be a warning to all art collectors.

The story begins with the purchase of a water colour painting by Marc Chagall at a Sotheby’s auction in 1994.  A couple of years ago, the buyer decided – in consultation with Sotheby’s – it would be a good idea to sell it again, as the owner had moved to a smaller house and no longer had room to hang the painting.

In 2008, Sotheby’s valued the painting for insurance purposes at $100,000.

When the decision to sell was made, Sotheby’s insisted, as a pure formality, that the painting should be authenticated by the Comité Marc Chagall. The Comité is a Paris based organization that appears self-appointed by ‘experts’, who include in their number the granddaughter of the artist. The comité was founded in 1988, and takes responsibility for the authentication of work by Marc Chagall. It is unclear to me on who’s authority they operate.

Assured by Sotheby’s that it was only a formality, the seller sent the painting to Paris.  Surprise, surprise, The Comté Marc Chagall declared the painting a fake.  And worse, the report stated that the heirs were requesting the French judiciary seize the painting, and that it be destroyed.

In short:  Sotheby’s lists and sells the painting as a genuine Chagall in 1994.  Sotheby’s reaffirms the authenticity of the painting in 2008.  It recommends that it be authenticated by the Comité Marc Chagall and is sent to France.  The painting is deemed a fake and is to be destroyed. 

A happy ending:  Sotheby’s apologizes for its error, admits that it got it wrong, not once, but twice, and pays for the shipping to France and the inspection by the Comité Marc Chagall, as well as refunding the original purchase price.  Case closed….. but, sadly no.

The real ending: Sotheby’s claims it is not their fault, somehow the listing in their catalogue is not really a validation, or certification of anything, it was a long time ago, and therefore they are not liable any more. In fact, they claim that liability for when they do get it wrong is only five years from the date of sale, which of course is written in tiny font worthy of any insurance policy in the terms of sale.

The loser: The lady, who Sotheby’s assured was taking little, or no risk sending the painting to Paris for authentication, is out of pocket for the purchase price, the shipping and authentication costs in Paris, and it seems will even lose the painting itself to fire, or shredding.

The Lesson: Be careful, and be aware of the risk of buying and selling at auction.

The commitment, and what it really means

Where did it all go wrong? Everything of course – absolutely everything – comes down to provenance; the well documented chain of ownership from artist to gallery to the present owner. For true authentication this chain must be unbreakable and rock solid. 

In the Chagall case, the breakdown is in part because very often there is no chain of custody available at an auction house, often because the seller wishes to remain anonymous and provides no evidence, nor, it seems, does the auction house demand it.  The buyer has to rely exclusively on Sotheby’s say so. Anonymous means the chain of custody – the provenance – is broken.

The message here is that you should always try to make sure that the chain of custody goes right back to the artist and is papered as such.  Does the gallery where you bought the work represent the artist?  Do it work with the artist? Has it provided you with written documentation to this effect?  Is the description of what you have bought complete? Is there a date of creation, description, title, signature, condition report, a date of sale, a signature, etc.? 

All this is only second best.  Best of all is to get to know the artist a little bit and buy with their knowledge, either directly form the artist, or through a gallery that they recommend. The gallery may go under and no longer exist, but anything you have from the artist directly discussing the work or describing it is gold – pure gold – when it comes to provenance.

Lesson I:  Buy directly from the artist, or at the direction of the artist in a gallery of the artist’s choosing whenever possible, and get as much background and description in writing as you can.

Lesson II:  If the artist is no longer alive, then get the same information from the family of the artist, or the estate of the artist.

Lesson III:  Ask a lot of questions.  A gallery that has a reputation to keep will answer all of them to the best of its ability. Only buy when you feel good about it and, of course, with as much paperwork as you can get. 

Lesson IV:  Print your emails, keep records, because when it comes to re-selling, proof of authenticity – as best you can provide it – will very much influence the price you will get for your work of art.

Be smart about buying art, be aware of the risk of buying and selling at auction. Keep all your records in case you need them one day.

Harbel

 

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