Estates & Attorneys: OTE at Heckerling 2015

OTE’s first year at the Heckerling Institute on Estate Planning was full of talk of Art Leasing and Fractional Discounting. That we offered these services seemed to surprise attendees who tended to be more familiar with business valuation.

It was probably the first time that any of the attorneys or financial planners discovered that an art appraisal firm was capable of complex valuations outside of the usual insurance, resale or donation practice.

One conference highlight for OTE representatives was the chance to speak with some of the attorneys involved in the recent Elkins case. When the Fifth Circuit awarded the Elkins family a $14.4 million estate tax refund and allowed for the use of fractional interest discounts for artworks, it was a great thing for collectors and OTE.  This was exciting for us as, more than twenty years ago, OTE was the first firm to successfully win a substantial discount for our client in an estate that contained works of art.

This was also the first time the OTE unveiled our new brand image and we were proud to have a clean new aesthetic to bring with us to Heckerling.

We were extremely happy with the positive response we received from the people we met at the conference and we are excited about participating again in 2016. See you there!

What to Look for When Collecting Photography (Part II)

On the most basic level, starting a collection in photography requires thought about the type of photography you actually like. Possible categories could include black and white, color, landscapes, nudes, living, vintage, documentary etc. Movements in photography are also good ways to define what you are looking for (Modernism, Pictorialism, War Photography etc). This seems simple but knowing how to define what you like is the first step to making successful purchasing decisions. Each of these different categories or movements will have specific knowledge associated with each.

Deepening your knowledge in these areas will help one develop an “eye.” Having an eye for art can come naturally for some but usually it requires years to perfect and is often difficult to obtain and maintain, even for appraisers.  For this reason seeing accurate documentation on anything you purchase, and keeping accurate documentation yourself - how you obtained it and when, should be a priority. Building a written inventory will ultimately save you a lot of headaches later on should you want to sell, or the work is stolen or damaged.

As art experts for the Public Administrator of New York, who handles estates without a will, we experienced just such an issue. Two senior appraisers from OTE were going through piles of mixed objects removed from the apartments, which included jumbles of furniture, framed artworks, collectibles, libraries and miscellaneous materials. Spread across several work tables, was a huge mass of what appeared to be old Kodak film boxes.

Looking through the meticulously maintained photographs, an anomaly considering the rest of the disheveled apartment, they had inadvertently stumbled upon the work of a real artist. Without OTE the collection of photographs by Harry Shunk and Janos Kender, great documentarians of the Paris/New York art scene in the second half of the 20th century, might never have been discovered.  The director of a major French museum and those of American museums and film societies arrived to review and the Public Administrator was persuaded to set up an auction for the photographs to be sold as one gigantic lot rather than dispersing them overtime. 

Excitingly The Lichtenstein Foundation, thanks to Dorothy Lichtenstein and Jack Cowart, acquired the massive collection at auction for $2 million.   After this the foundation began the collating the collection and set up a system to allocate segments of the collection to many museums worldwide.  The photographs are now considered invaluable in recording the history of major artists of the second half of the 20th century. A triumphant conclusion to what had almost become a treasure lost forever.

 

Feel like a bite? OTE's edible appraisals

A Mayan chief forbids a person to touch a jar of chocolate, (more than a thousand years old, via wikimedia)

A Mayan chief forbids a person to touch a jar of chocolate, (more than a thousand years old, via wikimedia)

In honor of Thanksgiving, a holiday with a distinctly foodie focus, we thought it might be fun to have a blog post dedicated to our experiences with food art.

Unsurprisingly throughout art history food has been the subject of many a painting/ sculpture/print/wood carving, and, let’s be honest every other kind of medium. Recent times have shown that it is more than just a subject. Contemporary artists have transcended merely depicting food to using it. Take Rirkrit Tiravanija’s conceptual installation/performance piece untitled (Free). Originally shown at 303 Gallery in 1992, it was recreated at MoMA as part of the Contemporary Galleries: 1980–Now installation in 2012. The exhibition converted a gallery into a kitchen where the artist served rice and Thai curry, using food as the medium with which to create art and a unique visitor experience. This piece is not alone.  In 1958 during the exhibition The Specialization of Sensibility in the Raw Material State into Stabilized Pictorial Sensibility, The Void Yves Klein served blue- cocktails to gallery visitors asking them to literally consume the artwork. Vik Muniz, a Brazilian artist is well known for his chocolate syrup drawings, one of which was of the Leonardo's ''Last Supper.” 

Chocolate

Chocolate

However, OTE has found that there are some unique challenges for owners of art using material as short-lived as food.

One of OTE’s many memorable appraisals, this case featured an artwork made of white, milk and dark chocolate and ink jet print laid on canvas. The damage was the result of a gust of wind that had caused fragile portions of chocolate to separate completely from the canvas. Sadly, the lost pieces of chocolate were not recovered. This was not the only damage the appraisers discovered. In one corner there was evidence of a mouse having nibbled on the yummy artwork. In this case the artist had intended for the work to “evolve,” which actually allowed for the loss of some of the chocolate and tampering from rodents and other animals. Less cute was the appearance of mold on other parts of the piece. The extent of the damage meant that it would need restoration, and ultimately sustain a substantial loss in value. Restoration required consolidating and re-adhering lifting/peeling areas of the material; unfortunately both costly and time consuming.

Another dilemma au chocolate involved a painting where the artist had stuck M&M’s to canvas, covering them in resin, and using them to dye the surrounding surface. Some of the M&M’s had become damaged (as seen in the picture below) and we had to determine whether this was the result of some sort of accidental damage or whether it was the inherent vice of the materials (i.e. the result of the materials themselves).  Research included some interesting conversations with a confused and curious customer service representative from Mars (the company that owns M&M). From her reaction we gathered that Mars did not often get questions like: what is an optimum temperature for an M&M? How long does the dye on an M&M last? How long would it take an exposed M&M to deteriorate, and what would this be if say the M&M were covered in, hypothetically, something like resin?

Detail of the damaged work

Detail of the damaged work

What we found out was that once you open the bag, Mars pretty much doesn't care what happens to M&M’s and really doesn't like to speculate. What could be extrapolated was that in the bag M&M’s should be stored at around 70 degrees in a cool dry place and that when exposed to heat M&M’s were likely to deteriorate more quickly. Probably, the Mars rep grudgingly admitted, it wasn't a stretch to say that M&M’s were indeed likely to deteriorate naturally over time, even when covered in resin. Following this data collection process, and our examination of the piece it was determined that it was the inherent vice of the M&M’s that was responsible for the loss. Mice, it seems, were not as industrious as our previous case had led us to believe.

If you choose to own something as wonderfully transient as art made with food, expectations of the work should follow accordingly. You may have to face the fact that something wants to eat it.

 

 

Fragments of Adam: an OTE Case

The separated head and torso looked disconcertingly familiar to me when they appeared in a photo on the front page of The New York Times on Sunday, November 9th. “Recreating Adam, From Hundreds of Fragments, After the Fall.”

Screen capture of the New York Times article 

Screen capture of the New York Times article 

The history of how it happened, the secrecy that ensued, the resurrection, and finally, revelation is the plot of this terrifying tale of Tullio Lombardo’s great Renaissance marble masterpiece. I hadn’t felt able to speak about it in detail for 12 years. A promise is a promise.

After the fall, when the initial horror of the museum staff had worn off, but only slightly, a few of us,  engineers , technicians and art specialists, were called upon to render professional opinions about what had gone wrong and what was going to be done about it. I and a colleague from this firm were led, as if to a chamber of horrors, into the conservation laboratory where the sculpture lay, shattered  yet still magnificent .

The papers write of it as if it had been scattered in a thousand fragments across the marble floor of the Velez Blanco Patio at the Met, but I remember it as retaining recognition as a very late 15th century Lombardo, head and much of the torso and one leg intact. I can’t recall exactly because I had to turn over all my photographs immediately after our report was rendered. Those were the days before digital where nothing dies. I guess those were the “28 recognizable pieces” that Met conservator Jack Soultanian mentioned in the newspaper article. The rubble had been bagged and identified.

From time to time, from hushed voices, we learned a little about what was going on in the lab, but very little. Massive amount of research were undertaken by this firm and we traced the sculpture back to its original site. The Renaissance scholar on staff, Leatrice Mendelsohn, was amazing in her pursuit of all the critical information required to help me arrive at a value of the sculpture before the fall and how much the piece had lost in value because of the damage.

A few months later I sat at an endlessly long wood table in a secluded section of the Met of which I had not been previously aware, facing what seemed to be an endlessly long  line of dark suited attorneys representing the multiple organizations and firms involved in the disaster.  Oddly enough, I don’t remember being scared because I was so overwhelmed by the grandeur of the setting, with light streaming down behind the group of what appeared to be judge types sitting to my left. I felt like it was an old Warner Brothers film about the trial of Charles the First.

Okay, not to prolong this because, after all, I survived and am writing this blog now. I mean, I wasn’t the one at fault anyway. I didn’t push Adam off his pedestal. The fact that its six foot three, one thousand pound marble body had been standing for so many years on a modest wooden pedestal might have had something to do with the disaster.

So it was with relief that I found that the Met has decided to open the floodgates of information, always a wise course to take, and one that suddenly seems in favor at major museums nationally. So much better than having misinformation leaking out in bits and pieces and that can prove far more detrimental than a simple admission and explanation.

I wonder if reality shows have been influencing all of us.

Written by Elin Lake-Ewald

A Visit with Scotland Yard

Fortunately, I wasn't under arrest when my fellow appraiser Ellen Epstein and I spent the morning in Scotland Yard last week.  We were in London for the Arts and Antiques PG Board Meeting, for the Royal Institute of Chartered Surveyors (RICS) and were visiting Scotland Yard on official appraisal business. 

At Scotland Yard my colleague from RICS and I, met Detective Sergeant Claire Hutcheon, head of the “Organized and Economic Crime Command – Art & Antiques Unit.” Detective Hutcheon, an attractive woman who has worked for Scotland Yard for more than 14 years, discussed with us some of the experiences she had had in her career; but like much of police work un-publishable until the perpetrator is behind bars.

However, as representatives of RICS Personal Property/Art & Antiques Committee we were specifically interested in the professional standards for valuers (appraisers) in London. For example: what does it take to be taken seriously by the police if asked to value stolen or missing works of art?  Compared to the USA, Europe’s requirements for appraisers are far below those of US practitioners, something that is readily admitted by everyone in the London art world. In some countries there are no discernible standards at all. However, Detective Hutcheon mentioned that England and France were working towards an agreement that would raise the level of professional standards.

Change seems to be in the air. Those with whom we spoke – police, attorneys, non-profit organizations, and representatives of professional entities, stated that they hope for a tightening of the rules governing appraisals by independent appraisers.  We were told that at the moment, the only due diligence generally performed is through the Art Loss Register, which affirms whether a work has been stolen. 

View from the roof of the RICS building in Parliament Square

View from the roof of the RICS building in Parliament Square

It is anticipated that this will change with the implementation of The Red Book, which would be an international source of regulations and standards for appraisers worldwide. This document would help to unify standards globally, whether dealing with real estate or fine art.  Even now regulations are being standardized internationally, as are the ethical rules imposed on all practitioners.  It may not be long before The Red Book becomes required reading for those internationally who have any participation in the world of art.

There are well over 160,000 RICS members worldwide and growing.  At the moment there are relatively few practitioners in America, but the world is opening up and I can see a future where there are singular and stringent regulations regarding good business practice in all nations. Sort of a One World concept, but not altogether so bad a thought.

Written by Elin Lake-Ewald

Appraisal or Estimate? Why Free Is Not Always Better

I spoke with someone recently who told me how they got all their appraisals for “free” at auction houses. What they got were not really appraisals but estimates of value.

An estimate by an auction house will likely only reflect what the auction house believes the seller will receive at auction. These sorts of “appraisals” are not good for insurance purposes and are not viable in court. Most art insurance policies rely on the retail replacement value, meaning the compensation would be for the retail value  of an artwork, as opposed to the price at auction (which is usually lower than a retail value).

This article is by no means knocking auction houses, which have amazing experts and specialists, but it is important to understand that an auction house’s primary job is to sell art, and offering a free estimate is one way to draw in business.

If you go to an auction house and are not serious about selling with them but merely attaining a value this is probably not the best option for you. Although auction houses have a considerable amount of information at their disposal, they rarely have time to conduct extensive research into an artwork that is not being consigned to them. A free estimate is not necessarily giving your artwork the time and attention it deserves.

The case of Ravenna v. Christie's in 2001 is a good example of relying too heavily on a free estimate. Guido Ravenna sued Christie’s as a result of his wife’s meeting with an Old Master Specialist at Christie’s in New York after she was given mistaken information about the provenance of the painting. The Old Master’s specialist, after only seeing photographs of the work during their short meeting, valued it at between $10,000 to $15,000, as he thought it appeared to be the work of minor 17th Century Italian painter, Nuvolone. Ravenna, then sold the work for $40,000 to a dealer who only months later consigned the work to Christie’s. 

The Lamentation, by Ludovico Carracci

The Lamentation, by Ludovico Carracci

This is where it gets a little sticky. After the painting was examined again, it was determined to be a work not by Nuvolone but rather by Italian Baroque painter Ludovico Carracci, who is far more significant. The Lamentation, as it was renamed, was sold at auction in 2000 for $5,227,500 to the Metropolitan Museum of Art where it now resides. Ouch.

Heritage Auctions does a good job of explaining how auction house appraisals/estimates work:

“Usually, the request for an "appraisal" actually refers just to an evaluation for the potential value of an item through auction or private sale… Heritage regularly provides quick and free evaluations of the current market value of art or collectibles. This is in the form of a verbal or written auction estimate — the range of value that one would expect to see the item sell for in today's auction market. This valuation is not intended for use as a formal appraisal or for any purposes of establishing a value for insurance, tax, estate planning, collateral or third party transactions.” (Heritage Auctions - Defining Appraisals)

If you want to divest an artwork quickly, auction houses are the way to go. But if you are serious about finding out about the value of something you own, make sure you get an authentic written appraisal from a USPAP certified appraiser.

 

Appraisers’ Chatroom July 2014

Art fairs: just when everyone was saying there were too many of them, even in the summertime they won’t give us a rest. Received three invitations in one week to attend fairs in different European countries. How do they have the strength? Spoke to a young woman who’d been to a huge fair in Dubai and she says it was better organized than any she’d been to in US or Europe. I’ll take her word for it.

Stuart Davis, Untitled, ca. 1922, cat. no. 1480 © Estate of Stuart Davis, Licensed by VAGA, New York, NY

Stuart Davis, Untitled, ca. 1922, cat. no. 1480 © Estate of Stuart Davis, Licensed by VAGA, New York, NY


OTE is not inviting you to an art fair. We don’t give them, just attend to check the pulse of the market. But for somewhat lighter entertainment we are going to share the link to our new website – no, not today – but soon. This is like a trailer before the show begins. It took a little extra time to receive permission from our artist clients or their estates to use their images. I hope you’ll find it was worth the wait.

Retrospective Appraisals

Each profession has its own complexities that require frequent clarification, not just for clients but for practitioners as well. In the appraisal field, one regulation that requires frequent clarification deals with past values.  This regulation governing retrospective appraisals seems to tempt appraisers into offering their own interpretations, but it should not.

A Retrospective Appraisal comes with an automatic stop sign once the effective date of valuation has been reached.  After that point, there can be no more data collection. How then can it be misinterpreted so often?

———————————————————————

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, June 2014.

To read the complete article please click here:

Retrospective Appraisals, June 2014

Copyright and Authentication

For the past couple of months there have been premonitory signals rumbling throughout that non-crystalline solid we loosely call the Art World that has ignited fear alike in scholars, dealers, consultants, collectors, artists and appraisers, a somewhat disparate cluster.

That Janus-headed fear on one side is Authentication and on the other Copyright, and is scaring the ego out of any number of those in the trade, and I use that word to encompass anyone who, either through fame or fortune, occupies the greater part of his/her time laboring in the field of art.

———————————————————————

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, April 2012.

To read the complete article please click here:

Viewpoint April 2012: Copyright and Authentication


Original Research and Innovative Appraisals

Once in a while, and these occasions don’t occur with great frequency, the personal property appraiser is asked to take on an assignment for which there is no precedent, no standards set by USPAP, no guidelines provided by his or her professional association, and very little reference to the subject in other disciplines. Such a situation arose earlier this year when we were approached by the director of a trust to provide:

 A. fair market value appraisal

B. replacement value appraisal

C. fair market/replacement value leasing fee 

---------------------------------------------------------------------

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, published in the Journal of Advanced Appraisal Studies, (c) Foundation for Appraisal Education, 2010.

To read the complete article please click here:

Journal of Advanced Appraisal Studies 2010 Original Research and Innovative Appraisals

For Appraisers Only: Responses to Some FAQs

“How can I persuade a reluctant dealer to provide a value on the work of an artist he represents?” My Opinion: We have a policy in our office. Do not ask a dealer for a value unless you have researched it first yourself. The research usually begins with an auction search, Googling information and utilizing your art and antiques reference library of art and antiques. When you decide you have a pretty good handle on the fair market price you can then call the dealer and say “I have checked auction prices on your artist, Billy Brown, and it appears paintings of his from the 1960s that are about 36 x 48 inches sell for $2,000. That doesn’t seem nearly enough to me in this market. After all, he has had a number of exhibitions here and inEurope. I want to do justice to your artist with an accurate value.”

---------------------------------------------------------------------

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, published in the ASA Personal Property Journal, Autumn 2008 / Winter 2009.

To read the complete article please click here:

PPJ Vol 17 (34) 2008 2009 For Appraisers Only - Responses to some FAQs

Art, The Appraiser and Econometrics

Articles in professional journals are presumed to be weighty matter – informational sentences that open for the reader insight into a subject about which he or she knows little if anything, and for which enlightenment is sought. This article is on what at first may seem to be a subject far from that of fine art appraising – Econometrics. It’s a hotter topic than you might think initially, but it has been coming up more and more on the pages of newspapers and journals regarding art and art prices.

---------------------------------------------------------------------

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, published in the ASA Personal Property Journal, Spring/Summer 2007.

To read the complete article please click here:

PPJ Vol 17 (12) 2007 Spring Summer Art the Appraiser and Econometrics

Appraisers Shouldn’t Pay

How does a fine art appraiser counter the demand for payment from a dealer asked to provide a price for the work on an artist that dealer represents? How does the appraiser even get cooperation of any sort from that dealer? For as long as most of us remember, ‘there’s been an on­going tug-of-war between personal property appraisers who need a replacement price from a gallery to complete an ap­praisal and the dealer who wants to be paid for this “appraisal.”

---------------------------------------------------------------------

The above is an excerpt from an article by Elin Lake-Ewald, Ph.D, ASA, RICS, published in the ASA Personal Property Journal, Winter 2001 / Spring 2002.

To read the complete article please click here:

PPJ Vol 13 14 (4 1) 2001 2002 Winter Spring - Appraisers Shouldn't Pay

My Lunch with IRS

She’s slight, almost fragile in appearance, but that appearance is quite deceptive. After sixteen years as an appraiser with the Art Valuation Division of IRS, and now chief of the department, this lady is a pro. In a voice that is soft, moderated and always pleasant, the statements made by Karen Carolan are affected in a tone that brooks no nonsense. It was July 27th, 1990, and we were meeting in the offices of Wilson Fadely, Public Affairs Officer for IRS. Mr. Fadely remained throughout the interview at 1111 Constitution A venue, IRS’ central D.C. building.

---------------------------------------------------------------------

The above is an excerpt from an article by Dr. Elin Lake-Ewald published in the ASA Personal Property Journal, Winter 1991.

To read the complete article please click here:

PPJ Vol. 3 (3) 1991 Winter My Lunch with IRS

Viewpoint

JOURNAL Editor Nancy Smith dropped by our New York office recently for a brief chat that transformed itself into a three-hour conversation about possibilities for ASA members to better communicate news and ideas beneficial to all of us.  This column has been initiated in the hope of gathering comments from members nationally, enabling anyone who wishes to give voice to views about the art market, legislation relating to appraisers, new rules and regulations affecting us, or, in fact, anything newsworthy of importance to personal property appraisers. A review of an art/insurance seminar was pre-empted by “My Chat with IRS,” a one-on-one conversation with a local representative of that governmental agency who had called “as a friend”.  The conversation focused on estate appraisals and what transpired that afternoon seemed of sufficient interest to think it might be worthwhile passing on and asking for comments.

---------------------------------------------------------------------

The above is an excerpt from an article by Dr. Elin Lake-Ewald published in the ASA Personal Property Journal, Autumn 1989.

To read the complete article please click here:

Viewpoint PPJ Vol 2 (3) 1989