NEW YORK—At an afternoon sale of Old Masters and 19th-century art at Christie’s next month, the auction house will sell 130 works from the bankruptcy estate of Lawrence Salander and his now defunct Salander-O’Reilly Galleries.
In March, Salander, who is free on $1million bail, pled guilty to 29 counts of grand larceny and one count of scheming to defraud. The Manhattan district attorney’s office has estimated the overall scope of his fraud at $120million and a judge has ordered him to repay his victims in full. Salander, who faces six to eighteen years in state prison, is scheduled to make another court appearance on May 20.
The group of works, which is to be sold in a dedicated session following the regular Old Master sale under the title “Select Works from the Salander-O’Reilly Galleries sold pursuant to the Plan approved by the U.S. Bankruptcy Court,” includes paintings by Peter Paul Rubens, Jacopo Palma, Jacopo Bassano, the studio of El Greco, Titian and Tintoretto. The offering is expected to realize a total “in excess of $2.5million,” according to a statement from Christie’s.
Given the often contentious procedural wrangling that has characterized this bankruptcy, the trust—the entity which is overseeing execution of the bankruptcy settlement—secured title insurance protection on each lot as an added benefit so that clients could acquire works with the confidence that they are free and clear of any claims or liens, according to a Christie’s spokesperson.
Salander declared bankruptcy in late 2007 as his business collapsed amid a storm of lawsuits and the gallery space on East 71st Street in Manhattan’s Upper East Side was ordered padlocked by a judge (ANL, 10/30/07). More than two and a half years later, experts are still sorting out claims linked to hundreds of artworks; in some cases works have been claimed by more than one person.
In his allocution when he pled guilty to the charges against him, Salander admitted he had sold artworks he did not own and kept the proceeds, frequently exchanged works he did not own to satisfy outstanding debts, solicited investments to purchase artworks or shares in artworks that he then improperly resold to other clients, and failed to inform or pay consignors when works were sold. Salander also admitted lying about owning works that he pledged as collateral to First Republic Bank in exchange for a $2million personal loan. The dealer owes the bank, which is considered a “secured” or high-priority creditor, at least $30million.
Under the plan approved by the bankruptcy court, the first $2.5million in proceeds from the Christie’s sale will go towards repaying the unsecured creditors’ committee, a group of Salander victims who did not document the ownership status of the works in question and who, as a result, are in a less advantageous position for recouping money or works they are owed under the auspices of the bankruptcy court.
An auction of antique furniture and rugs that belonged to Salander was held by auctioneer Stair Galleries, Hudson Valley, N.Y., earlier this month, and raised $551,993, with the proceeds earmarked for repaying creditors. All but five of 258 lots on offer found buyers.