Jan. 28 (Bloomberg) -- A folk art collection assembled by Ralph O. Esmerian, the former chairman emeritus of the American Folk Art Museum serving a six-year federal prison sentence for fraud, fetched a record $13 million at Sotheby’s in New York.
Titled “Visual Grace: Important American Folk Art from the Collection of Ralph O. Esmerian,” the 228-lot sale on Jan. 25 generated the highest proceeds ever for an American folk art collection, the auction house said in a statement.
The top lot at the sale ordered by the U.S. Bankruptcy Court was a carved figure of Santa Claus by Samuel Robb, which went for $875,000, more than three times its high estimate of $250,000. The artist made the figure as a Christmas present for his daughter, Elizabeth, in 1923.
The auction generated $10.5 million for Esmerian’s creditors, liquidation trustee Jay Teitelbaum of New York-based Teitelbaum & Baskin LLP said yesterday in a telephone interview. Creditors hold more than $140 million in claims, according to court papers filed in a December 2012 settlement agreement. The auction tally, which includes commissions, surpassed a 1994 event that raised $12.3 million, Sotheby’s said.
Esmerian, 73, former owner of jeweler Fred Leighton Holding Inc. in New York, was convicted of fraud and sentenced to prison in 2011 for a scheme to conceal assets from the bankruptcy court as well as wire fraud.
“Even with this very good result, creditors still will be looking at a recovery of less than 10 cents on the dollar,” Teitelbaum said. Esmerian had promised his collection to the American Folk Art Museum in New York, where he was a trustee.
Many of the items that ended up on the auction block were featured in a 2001 hardcover catalog called “American Radiance: The Ralph Esmerian Gift to the American Folk Art Museum.” The museum was allowed to keep 53 pieces, valued at $7.8 million to $11 million, as part of the settlement, Teitelbaum said.
The remainder of the 327-piece collection was estimated at $6.3 million to $9.5 million and consigned by the liquidation trust to Sotheby’s for the Jan. 25 sale. Ruth Whittier Shute and Samuel Addison Shute’s work showing a young boy in pastel blue garb, “Portrait of Jeremiah H. Emerson,” fetched $665,000, more than three times the high estimate of $200,000, according to the auction house.
A late 19th century weather vane carved as a pheasant sold for $449,000, beating its $300,000 high estimate. Bill Traylor’s painting “Man with a Plow” (1939-1942) went for $365,000, surpassing its $175,000 high estimate.
Forty lots valued at $900,000 failed to find buyers, Teitelbaum said.
“We have to decide how to best sell those items,” he said. “We are trying to do the best job we can for creditors, but realize they will take a significant hit on their loans.”
The Sotheby’s sale wasn’t the first time Esmerian’s art appeared on the auction block. In 2008, the crown jewel of his collection, Edward Hicks’s biblically inspired painting “The Peaceable Kingdom,” fetched $9.7 million at Sotheby’s in New York. The collector had promised the work to the folk art museum, where it had been displayed, and also pledged it to Sotheby’s as collateral for a loan.
Esmerian, who is serving his sentence at U.S. Penitentiary Canaan in Waymart, Pennsylvania, is scheduled to be released on Nov. 29, 2016, according to the website of U.S. Bureau of Prisons.
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