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Lehman Creditors May Get $16 Million as Hirst, Freud Auctioned

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Aug 16 (Bloomberg) -- Artworks from the collection of Lehman Brothers Holdings Inc. may raise another $16 million for its creditors as collectors and souvenir hunters snap up remains of the collapsed bank.

About 1,000 lots, including works by Damien Hirst, Lucian Freud, Andreas Gursky and Gary Hume, will be auctioned by Sotheby’s in New York, Christie’s International in London and Freeman’s of Philadelphia in the fall. The lots also include a metal sign from outside Lehman’s U.K. Canary Wharf office, valued at as much as 3,000 pounds ($4,680), as well as boardroom cigar humidors and tea caddies starting at 600 pounds.

New York-based Lehman was the world’s fourth largest investment bank on Sept. 15, 2008, when it filed the biggest bankruptcy in U.S. history. It had assets of $639 billion. More than $830 billion in claims have been filed against Lehman, which has said many are duplicates.

“Everyone recognizes the bankruptcy was the turning point in the economy,” William Porter, head of British and Irish art at Christie’s South Kensington, said in an interview. “The infamy of the name is a good provenance. The attraction lies in the car-crash element.”

Sotheby’s offers 400 works from Lehman’s U.S.-based art collection in New York on Sept. 25. Christie’s will be holding a 300-lot sale of items that formerly adorned the Lehman London and European offices on Sept. 29. A smaller tranche of ex-Lehman contemporary pieces will be put under the hammer by Freeman’s on Nov. 7.

Bernard Portrait

More than 30 percent of the Christie’s lots are valued at less than 1,000 pounds and are offered without reserve. Freud’s etching “Head of Bruce Bernard” is expected to fetch as much as 12,000 pounds, while Hume’s painting “Madonna” is the most highly valued artwork at 70,000 pounds to 100,000 pounds. The auction will raise as much as 2 million pounds, Christie’s forecasts.

Christie’s will also be offering the Lehman’s Gursky photograph in its Oct. 14 auction of contemporary art in London. The image of New York traders, dating from 1991, is expected to fetch as much as 150,000 pounds.

Lehman filed for Chapter 11 on the same day that Sotheby’s began its Hirst “Beautiful Inside My Head Forever” auction in London. Though the two-day dispersal of new works by the artist raised a record 111.5 million pounds, auction prices of contemporary names, including Hirst, soon tumbled during the financial crisis.

Hirst Cabinet

An early Hirst work is the star lot of Sotheby’s sale of pieces from Lehman’s U.S.-based art collection. Estimated at $800,000 to $1.2 million, “We’ve Got Style (The Vessel Collection -- Blue)” is an early cabinet piece filled with ceramic objects that was bought in 1994 by the New York-based asset management firm Neuberger Berman Holdings LLC. Sotheby’s estimates that its auction will total as much as $13 million.

Lehman acquired Neuberger Berman in 2003 and the two firms’ corporate art collections were merged. Last year, Lehman issued a majority stake in Neuberger to the unit’s employees in return for contractual guarantees that they would remain in their jobs.

About 250 further pieces from the Neuberger Berman and Lehman collections will come up for sale at Freeman’s in November. Freeman’s said that the lots are mostly contemporary works on paper produced during the last 10 years and are expected to raise between $250,000 and $350,000.

The Philadelphia auction house last year sold four groups of ex-Lehman artworks for a total of $2.2 million. More than 50 artists’ records were set and all of the lots were sold, said Freeman’s in an e-mailed statement.

Trophy Buys

“We had a lot of new buyers,” Anne Henry, the company’s vice-president of modern and contemporary art, said in an interview. “Some were bankers looking for trophies. Others were people who thought that if it was good enough for Lehman, then it was good enough for them to dip a toe into art collecting. Provenance had everything to do with it.”

Lehman’s creditors include Goldman Sachs Group Inc., UBS AG, the New York Giants and Abu Dhabi Investment Authority as well as individuals who hold Lehman bonds.

The bank has said it may spend five more years selling assets to pay unsecured creditors as little as 14.7 cents on the dollar.

(Scott Reyburn writes about the art market for Muse, the arts and culture section of Bloomberg News. Opinions expressed are his own.)

To contact the writer on the story: Scott Reyburn in London at sreyburn@hotmail.com.

To contact the editor responsible for this story: Mark Beech at mbeech@bloomberg.net.

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