NEW YORK—As the Chapter 11 proceedings of Salander-O’Reilly Galleries move forward, the bankruptcy court is preparing for a sale of some of the gallery’s assets, including its expansive library with an estimated 20,000 volumes. Considerations for a sale of approximately 400 Oriental rugs and other objects including furniture are also under way, according to a person close to the proceedings.
An auction to consider offers for the book collection—which comprises rare books, first edition works and reference materials related to art and music from the Renaissance through the contemporary period—is scheduled for 2 p.m. on April 14 in U.S. Bankruptcy Court in downtown Manhattan, immediately followed by a hearing to consider approval of the highest bid.
According to rules governing the sale, bidders must submit bids before or at the auction and must exceed the current existing $350,000 bid by at least $10,000 (for a minimum of $360,000, with the minimum requirement for subsequent bidding increments set at $5,000). “We’re hopeful that we’ll have competitive bidding,” says Robert Raicht, counsel for the gallery.
As the case “is finally starting to stabilize, the gallery will be shut down permanently on April 30,” according to a source close to the proceedings. This follows settlement of a rent payment dispute between dealer Lawrence Salander and the landlord of the gallery premises at 20-22 East 71st street. The property is managed by RFR Holdings, which is controlled by art collector Aby Rosen. The successful buyer of the book collection will be responsible for taking possession of it before the gallery premises are vacated.
Putting a Protocol in Place
Artwork stored in the gallery is being transferred to a bonded warehouse, while a protocol for resolving disputes over claims on artworks and funds from dozens of creditors is put in place. Many of those creditors, including Earl Davis, the son of painter Stuart Davis, and collector Carol Cohen, had brought lawsuits against Salander and the gallery, prior to the bankruptcy filing in early November.
Under the terms of the rent settlement, Salander will vacate the building “on or before April 30,” and pay a total of $994,374.97 to satisfy the landlord’s claims. The first payment from Salander to the landlord will be in the amount of $300,000, according to court files.
The landlord also will return a painting by Edouard Manet, La Femme aux chiens, that Salander had given “as security for its payment obligations under the lease,” court files state. In a previous filing Salander had estimated the value of the painting at up to $2 million.
According to the settlement, Salander “will use commercially reasonable best efforts to promptly sell the painting” and remit up to $694,374.97 of the proceeds to the landlord to satisfy the overall claim.
Salander-O’Reilly was shuttered and barred from doing further business by a New York state supreme court judge last October after Salander and the gallery were pressured by creditors, clients and investors seeking the return of more than $80 million in artwork and funds they claimed were owed (ANL, 10/30/07, pp. 6-8).