Troubled businesses are selling art to raise funds

When companies fall, it can result in an art market bonanza. For example, bankruptcy administrators of Italian airline Alitalia disposed a collection of Futurist works for more than 1 million euros. Sotheby's sold nearly 1,000 photos by lens masters like Ansel Adams, Dorothea Lange in June during a bankruptcy court-approved sale of defunct camera-maker Polaroid’s collection.

The trend of corporations purchasing artworks in good times and disposing them off in bad is quite an old one. IBM president Thomas Watson, Sr. gathered works by artists like Frida Kahlo for decorating the IBM pavilion at New York’s World Art Fair in 1939. Decades later, the cash-strapped company sold its rich collection for $31 million through Sotheby's.

Judd Tully, art expert and editor-at-large of Art & Auction, felt it was unlikely to see big firms selling off works in bulk owing to the negative publicity such events would generate, as it clearly raises a red flag that they obviously must be going broke.

Germany's HypoVereinsbank disposed a blue sponge painting by artist Yves Klein in June from its collection for 6.2 million pounds through Sotheby's. When Commerzbank took hold of Dresdner Bank, it also acquired an Alberto Giacometti sculpture ‘Walking Man’ that became the most expensive work ever when it went for 65 million pounds at Sotheby's auction in London earlier this year.

Lehman Brothers auctions at Sotheby's (New York) and Christie's (London) are expected to raise over $10 million for the creditors, only a fraction of the debt worth $613 billion held by Lehman after it collapsed in late 2008, leading to a global financial meltdown. The underwriter expected interest in the sale to be good not merely owing to the quality of the art on offer, keen to see if the Lehman provenance would increase the intrinsic value of the collection - memento mori of the great global credit crunch.