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CNET's Minor Stirs Auction Fight for $17 Million Art Collateral
An unpaid loan and a coveted art collection have stirred up a $17 million donnybrook between two auction houses.
ML Private Finance, an affiliate of Bank of America's Merrill Lynch, has petitioned a New York federal court to allow the liquidation of a collection of contemporary art and design pieces through auctions in May and June by Christie's International, which valued the trove at more than $17 million.
The proposed sales would resolve a delinquent loan to CNET Networks Inc. founder Halsey Minor, who borrowed $25 million from ML Private Finance beginning in 2007, with art as collateral. The bank sued Minor and his trust in December 2008 for failure to repay the loan. Last October, ML Private Finance obtained a court judgment for $21.6 million, and this year petitioned the court to allow Christie's to auction 103 works.
Minor himself had originally contacted Christie's about handling the sale, but then turned to auction house Phillips de Pury.
"We at Christie's were not happy about this development,'' said Robert Manley, a senior vice president, in an affidavit. The auction house last month paid $600,000 in advance to cover the cost of having the works shipped to New York from California, photographed and prepped for sale, according to the affidavit.
Phillips fought back by offering to pay Minor 108 percent of the hammer price, an arrangement that shares the buyer's fees. It's a costly business-hunting tactic that auction houses reserve for only the most desirable material.
Changing Taste
The Phillips proposal also promised to waive all sale- related expenses and to give the works the marquee treatment in the firm's new midtown-Manhattan gallery. The proposal shows renderings of Phillips's triple-height windows featuring two major works from the Minor collection, Richard Prince's 2004 "Hollywood Nurse'' and Mark Newson's 1981 serpentine aluminum "Lockheed Lounge."
The Virginia-bred Minor, who once favored traditional American art ranging from Edward Hopper to Marsden Hartley, subsequently gravitated to newer work by the hottest names. The collateral includes major paintings by Takashi Murakami, Mark Grotjahn and Ed Ruscha.
Dealer Larry Gagosian sold Minor "Hollywood Nurse,'' previously owned by hedge-fund manager Steven A. Cohen, chairman and chief executive officer of SAC Capital Advisors LP. Similar Prince works have fetched as much as $8.5 million at auction.
Minor also paid top dollar for celebrated design pieces, such as "Lockheed Lounge," another version of which sold at Phillips last year for $1.6 million.
Winner Unclear
Minor and Christie's are embroiled in separate legal battles involving claims and counterclaims over payments for art bid at auction. Sotheby's sued him in 2008 for failure to pay $18 million for three paintings he bid on at auction. Minor has countersued.
The winning auctioneer for the ML Private Finance case is up to the court. Three calls to Lee A. Weiss, Minor's lawyer at Browne Woods George LLP went unreturned. ML Private Finance's lawyer James W. Perkins, of Greenberg Traurig LLP, said he could not comment on active matters.
A hearing has been set for Monday, when the judge will decide whether Christie's or Phillips will sell Minor's art.
To contact the reporter on the story: Lindsay Pollock in New York at lindsaypollock@yahoo.com.
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