May 15 (Bloomberg) -- Francis Bacon's three-panel painting of a headless man devoured by vultures sold for $86.3 million in New York last night, smashing the auction record for contemporary art and defying predictions of a recession.

The sale at Sotheby's drew an array of solvent swells, including former Paine Webber Group chairman Donald Marron and Blackstone Group Vice Chairman J. Tomilson Hill III. The $362 million auction was the New York company's biggest ever and beat its $356.7 million high estimate for the 83 lots.

``There are fewer people in the market,'' said Paul Gray of Chicago's Richard Gray Gallery. ``But those who are in have plenty of confidence, exuberance and lots of dough.''

Eight lots went for more than $10 million. Records fell for 18 artists from around the globe, including Yves Klein, Hans Hofmann, Lee Krasner and Takashi Murakami, who attended the sale carrying a designer camouflage tote bag. Ten lots failed to reach Sotheby's minimum price and didn't sell.

On Tuesday night, Christie's International pulled in $348 million for 26 fewer lots, $14 million less than Sotheby's total. Sotheby's shares rose $2.06, or 7.7 percent, to $28.76 at 4 p.m. in New York Stock Exchange composite trading after gaining 11 percent yesterday, their biggest one-day jump in more than two years. Phillips de Pury & Co. holds its contemporary auction tonight.

Sotheby's previous record for its top sale was $315.9 million at a November 2007 contemporary auction.

Designer Heels

Murakami's buck-naked, 8-foot-tall ``My Lonesome Cowboy,'' inspired by a Japanese video game hero with a swirling semen lasso, fetched more than five times its $3 million low estimate. At $15.2 million, it may be the most expensive ejaculation ever sold at auction. (A Sotheby's spokeswoman said that's one category they don't track.)

Accessories around the salesroom included a straw cowboy hat, a neck tattoo and four-inch designer heels. Dealer Larry Gagosian managed to make gum chewing and granny glasses look cool.

``A successful auction takes two things: money and testosterone,'' said Chicago collector Stefan Edlis, outfitted in a black leather jacket.

The trophy Bacon, ``Triptych, 1976,'' was inspired by Greek mythology and the artist's angst. Oozing amorphous figures represent the bleak view of Bacon, who died in 1992. His previous record was $52.7 million, set at Sotheby's New York last year, for a swirling, red, Pope-like figure in the 1962 ``Study for Innocent X.''

Bidding for Bacon

Bidding for the Bacon opened at $60 million, not far off the $70 million estimate, indicating Sotheby's confidence. The race narrowed to two contestants, represented over the phone by Oliver Barker from the London office and Patti Wong, chairman of Sotheby's Asia.

The room was hushed as bids rose mostly in million-dollar steps. At $76 million, auctioneer Tobias Meyer looked at Wong.

``Be brave!'' he exhorted. Wong laughed and offered $76.5 million, her client's final effort.

``Is he sure?'' Meyer asked. ``Even if I beg?''

Wong's client was done. An unidentified European collector, on the phone with Barker, prevailed.

Unloved Rothko

The evening's biggest casualty was Mark Rothko, whose 1956 ``Orange, Red, Yellow'' drew not a single bid. Estimated to sell for more than $35 million, it was especially painful for Sotheby's, which said it ``owns the lot in whole or in part or has an economic interest in the lot equivalent to an ownership interest.''

On Tuesday, the top lot at Christie's was another yellow- and-red Rothko, which sold for $50.4 million. Rothko's 1950s ``White Center (Yellow, Pink and Lavender on Rose)'' held the previous record for priciest contemporary work sold at auction, fetching $72.8 million last year at Sotheby's in New York.

Sotheby's sale got a lift from 33 lots from the Lauffs Collection, totaling $96 million, more than double the $47 million estimate. ``Provenance and quality,'' art adviser Thea Westreich said, explaining their success.

With a juice and bottling fortune, German collectors Helga and the late Walther Lauffs bought major minimalist, Pop and conceptual artworks in the 1960s and 1970s. They purchased under the direction of Paul Wembers, the influential director of the Kaiser Wilhelm Museum in Krefeld, Germany. The collection was formerly on loan to the museum.

Promise to Seller

Sotheby's guaranteed the collection, promising the seller an undisclosed amount regardless of the outcome of the sale. (New York dealer David Zwirner is also selling a large chunk of the Lauffs works.)

A reflective 1962 Yves Klein ``MG 9,'' with mottled gold leaf, was the evening's second-highest lot, fetching a record $23.6 million. Klein's ``IKB 1'' in his trademark electric blue, made $17.4 million. Private dealer Philippe Segalot bought both.

Robert Rauschenberg's oil-and-silkscreen 1963 canvas of images of New York stop signs and office buildings fetched a record $14.6 million, just below the $15 million presale high estimate. The artist died on Monday at age 82.

Banksy, the fashionable London street artist, turned out to be not quite so hot on canvas. Last night marked his first appearance in a Sotheby's New York evening sale. Four quaking cloaked figures, on their knees, pray and prostrate to a red sign announcing ``Sale Ends Today.'' Estimated to fetch up to $800,000, the painting didn't sell.

Prices include a buyer's commission of 25 percent of the hammer price up to $20,000, 20 percent of the price from $20,000 to $500,000 and 12 percent above $500,000. Estimates do not reflect commissions.

(Lindsay Pollock and Philip Boroff write on the arts for Bloomberg News. The opinions expressed are their own.)

To contact the writers of this story: Lindsay Pollock in New York at lindsaypollock@yahoo.com; Philip Boroff in New York at Pboroff@bloomberg.net.

Last Updated: May 15, 2008 16:24 EDT