lehman brothers

When it comes to real estate if at first you don't succeed, list, list again. The Wall Street Journal reports that former Lehman Brothers president Joe Gregory has relisted his beautiful Bridgehampton mansion at a new lower price. This was our estate of the day back in September 2008 when it was listed for $32.5 million. We watched the price tumble to $27.9 million before it was taken off the market. Now it's back with a new broker, Beate Moore of Sotheby's International Realty, new listing pictures and a price of $25 million.

Gregory bought the 9,500-square-foot oceanfront home for $19 million in January 2007. The Hamptons home was a new eight-bedroom spec house which was built on 2.5 acres in Bridgehampton, New York. Gregory and his wife Niki spent several million dollars in renovations but reportedly only spent less than a month total in the home before it was first listed. The home includes two master suites and a a second floor deck, The property has a pool area surrounded by plush green lawns and a sandy path leading across the dunes and to the ocean.

Fine art formerly owned by Lehman Brothers brought in $12.28 million at Sotheby's New York on Saturday, September 25. The money will be a drop in the bucket toward the more than 600 billion dollars owed to creditors of Lehman Brothers, which declared bankruptcy on that fateful day back in 2008, causing global financial panic. The AFP reports that the sale set 17 records for artists, including Julie Mehretu, whose painting "Untitled 1," shown above, sold for $1,022,500, sailing over the estimate of $600,000-800,000. One lot that failed to sell was an early piece by British art darling Damien Hirst.

It's been two years since Lehman Brothers filed for bankruptcy (check out our sister blog Daily Finance's coverage of the event). Since then, gradually we've seen much of the company's corporate art go up for sale. On September 25, Sotheby's New York will sell the $10 million art collection of Lehman Brothers and of the money manager it bought in 2003, Neuberger Berman. As the NY Observer puts it the Sotheby's sale offers a glimpse into Wall Street's glory days. What's intriguing is that the art advisors bought with both their hearts and their wallets, buying works from "name" artists that had failed to sell at auction in the hopes that the pieces would be worth more later. It looks like we'll soon find out.

The most expensive piece in the auction is Damien Hirst's We've Got Style (The Vessel Collection-Blue), which should bring in around $1 million (nearly a bargain by Hirst standards). Other pieces include Takashi Murakami's 1998 Chaos and Untitled I by Julie Mehretu which is estimated by Sotheby's at $600,000 to $800,000.

The Observer article also addresses the issue of provenance. Will the idea of picking over the remains of Lehman Brothers tempt or turn off potential buyers? The sale was once called the Lehman auction, then it was the Neuberger Berman & Lehman Brothers auction but now it's just the Neuberger Berman auction on the Sotheby's website. Check out the Observer article for more info on some of the price pieces being auctioned off including the Richard Prince painting shown at right.

The action in Tribeca on Saturday night gave me a bit more proof that the art market is looking for a bounce. I attended an art show held by local artist Ben Krell and Lindsey Nobel, who came in from Los Angeles, and the action was palpable. At last count, six pieces sold at the event, and there were many serious buyers with an eye to add emerging artists to their collections again.

Krell and Nobel have vastly different styles, but the pieces complemented each other in the loft where the event, billed as an "open studio," was held. Krell's work through several periods was on display, from the tight geometric styles he favored several years ago to the organic approach he uses today. Nobel offered pieces using several media – including photography and plastic. Works by both artists captivated the guests who crowded the venue as the evening unfolded.

Nobel's work features intricate designs connecting larger abstract shapes that are based on photographs she has taken of sculptures. The intentional result is an interconnectedness reminiscent of neural networks, linking stations of consciousness into a greater, unified presence.

Unlike his partner at the event, Krell prefer broader, sweeping themes on his canvases (which he shapes himself). His latest movement evokes feelings of creation – in the cosmic sense – with concentrations of energy yielding to calming effects.

The Tribeca art exhibition was a trip home for Krell, who painted in that particular loft back in the 1990s. He also held a show there in September 2008, shortly after the collapse of Lehman Brothers. The mood couldn't have been more different this time around. Attendees were considerably more upbeat ... and in greater number. The sheer level of participation was enough to suggest that the art market is getting ready to turn, and the fact that several collectors made purchases reinforces the notion.


[Photo courtesy of Ben Krell]

Another chapter in the history of Lehman Brothers is now closed. At yesterday's auction, the artwork held by the once mighty financial institution fetched $1.35 million, almost double the $760,800 presale estimate by Freeman's Auctioneers. Nonetheless, it puts hardly a dent in the $250 billion that Lehman owes its creditors.

The auction lasted six hours and featured both fast-paced bidding and generous prices. Unsurprisingly, Roy Lichtenstein's Statue of Liberty print, titled "I Love Liberty," was the top lot at $49,000 (the presale estimate was only $25,000). Robert Indiana's "Polygons" prints brought in $23,750, almost four times the expectation. Every lot moved, the first time we've seen a 100 percent auction (high profile, at least) in a while.

Alasdair Nichol, vice chairman and auctioneer at Freeman's, cites "trophy hunting" as the driver behind Sunday's result. "What's not to like?" he said to Bloomberg News." "It's nice boardroom art, presented nicely, ready to go up on the walls. People lapped it up."

If you want art with an unique history, go to Freeman's auction house in Philadelphia tomorrow. More than 200 contemporary and modern art pieces formerly owned by Lehman Brothers will be going under the gavel. The efforts of David Hockney, Robert Indiana, Frank Stella and Roy Lichtenstein will be represented at the auction. The collection is valued at between $500,000 and $750,000, and most of the lots do not have reserve prices. Those that do (there are only around a dozen) only have minimums of $10,000.

This is an auction that's sparked some interest among art collectors.

Anne Henry, vice president of Freeman's, told The Associated Press, "Our phones have been ringing off the hook," continuing, "The pieces are interesting, in great condition and appeal to all kinds of collectors." Specific lots include an Alexander Calder print estimated at $800 to $1,200, a set of nine Walker Evans photographs which are estimated at $1,000 to $1,500 and a Roy Lichtenstein print of the Statue of Liberty, which is expected to go for between $15,000 and $25,000.

Lehman Brothers didn't get much time to enjoy the pieces it purchased. Some were acquired only a few months before the storied investment bank collapsed in September 2008, crushed by the weight of $600 billion of debt.

Of course, this auction pales in comparison to that of former Lehman CEO Richard Fuld. He sold 16 pieces at a Christie's auction last year, bringing in only $13.5 million, nowhere close to the $20 million estimate.

If you can't make tomorrow's auction, Freeman's will be holding two more: one for paintings and sculpture on December 6, 2009 and a no-reserve auction of 450 prints on February 12, 2010.

Collectors are looking and thinking. They might take action, but it's still too soon to tell. The action at Foire Internationale d'Art Contemporain (FIAC) in Paris is deliberate: nobody's rushing to put their cash on the table. However, there are signs that some pricey and prestigious pieces may sell.

Last week, a painting by Piet Mondrian was put on reserve, at a price between $30 million and $40 million. One of Pablo Picasso's works was reserved, as well, at $24 million. Back in the art boom, these pieces would have been snapped up already, but dealers are saying that it's taking longer to complete sales at FIAC this year than last year. Even billionaires need convincing in this market, it seems.

Also, there's a greater desire to stay under the radar. Whether it's to maintain some privacy or hide the fact that they have the means to spend more than they like, some owners and buyers are turning to private sales. Bargains, thus, won't make it into the public record – sparing sellers the embarrassment and preventing the other holdings of all collectors from sustaining a measurable decline in value. If premiums are paid, buyers won't have to reveal that they have the cash to pay more, preventing prices from increasing broadly.

The three major auction houses were upbeat at the Frieze Art Fair and seem to think an art market recovery is in the works. ArtInfo reports that Sotheby's, Christie's and Phillips de Pury came out of the event feeling positive about the market's direction – even if it is tempered with a dose of reality. The number of pieces sold and the prices at which they moved were still pretty far from what they were in the pre-Lehman days. For now, though, collectors need to think about the early stages of recovery, not hope for a return to the glory days of 2007.

The auction houses did fairly well, though estimates tend to be far lower than a year ago. Damien Hirst's Wallace Collection moved well, with "Two Skulls" selling for $705,244, far more than its presale estimate. Emerging artists had moments in the sun, as well, particularly Hurvin Anderson's "Untitled (Beach Scene)," which sold for $158,304 – more than three times its presale estimate. Farhad Moshiri's "Cowboy and Indian" more than doubled its presale estimate, with a price of $548,976. In general, the auctions posted sufficient results, the first step in a market turn. Sotheby's and Christie's pierced the $20 million mark in recent contemporary auctions, and Phillips de Pury moved 31 of 43 lots to reach $6.7 million in a recent contemporary auction.

Now that the art market is moving from Frieze to FIAC and into the busy fall auction season, we'll get a sense of what 2010 will look like ... and if the market is finally picking up the momentum we all want it to show. The last art market slump, from 1990 to 1992, didn't bring an immediate resolution, with prices not returning to normal until 1995. So, brace yourselves for a slow recovery (or treat it as bargain season!).

The high flying days are officially over for Lehman Brothers. The Wall Street Journal reports that Lehman Brothers has finally sold off its last private plane, a Gulfstream 550 that it bought for about $40 million in 2006. Lehman Brothers Holdings has already sold off two Gulfstream IVs, a Dassault Falcon 50 and a Sikorsky chopper since filing for bankruptcy last year. The planes were often used to cart Chief Executive Richard Fuld and his team of executives to meetings around the world (and to Fuld's several homes). The firm of Alvarez & Marsal continues to sell off Lehman's assets. So far Lehman raised almost $90 million from selling the planes and helicopter, an amount that the WSJ says is roughly 97 cents to the dollar of their book value (purchase price less depreciation). Not too shabby in this market.

Tasteful prints and other works of art by some of the world's biggest art names once lined the corridors of the Lehman Brothers offices. Now several hundredd pieces from the collection will be put up for auction at Freeman's in Philadelphia on November 1. The auction showcases modern and contemporary art with works by Andy Warhol, Alexander Calder, David Hockney, Roy Lichtenstein and others. The art being sold is estimated to be in the $500,000 to $750,000 range. Money realized will eventually go to Lehman's many creditors.

This is just the first of a couple of auctions. On December 6, Freeman's will sell off 30 lots of European fine paintings from the Lehman collection. Next year, on February 12, another 500 lots or so lots will go up for sale. This collection is not part of the personal collection of Dick Fuld, the former CEO of Lehman, and his wife, Kathy. The Fulds sold a group of 16 artworks through Christie's last November for around $13.5 million. The piece shown at right, Roy Lichenstein's I Love Liberty, is a 1982 colored screenprint numbered 37/250.

Another executive associated with Lehman Brothers has put his Hamptons home on the market. Newsday's Real LI blog reports that Jack L. Rivkin, the former head of a Lehman Brothers company, Neuberger Berman has put his oceanfront estate in Amagansett. Rivkin is now the director of California-based business incubator Idealab.

A six-bedroom home sits on a 1.86 acre property off Further Lane. The home is 7,000 square feet and has a separate guest wing, formal dining room, professional kitchen, a gym and a bowling alley. The home has views of the Atlantic and there is a private deeded path to the beach. The property includes a heated pool, a pool house and a 365 year old barn which was brought from England, renovated and expanded. This home is listed for $31 million.

The former CEO of Lehman Brothers, Richard Fuld is back in the news. Back in November, right around the time that Fuld and his wife Kathy were selling off a bit off their art collection at Christie's (a collection of 16 drawings brought in $13.5 million), Fuld put his Jupiter Island mansion into his wife's name. Cityfile has the records which show that the house was transferred for just $100. The home is on 3.3 acres and is worth $13.3 million. Jupiter Island is home to a variety of big spenders and celebrities including Tiger Woods and Celine Dion.

The move is seen as another way that Fuld was protecting his assets. According to a law professor quoted in Bloomberg's article on the sale, Florida has strong homestead protection and so if Kathy Fuld uses the Florida home as her principal residence it could be protected from creditors if his assets get seized. Richard Fuld earned $34.4 million in 2007 and stepped down as CEO of Lehman Brothers at the end of last year. The company filed the biggest U.S. bankruptcy with $613 billion in debt.

I'd usually save a piece like this for the Sunday Real Estate Round-Up but I'm a bit fascinated by New York real estate greed this week. The New York Observer's Manhattan Transfers column reports that Kurt A. Locher, formerly a Lehman Brothers managing director and the head of its mortgage banking, isn't trading down in these tough times, he's trading up to a more expensive apartment. He recently bought a $5.25 million apartment at 500 West End Avenue. The five-bedroom apartment includes a formal dining room, a maid's room, a living room, a library, and a windowed, eat-in chef's kitchen. It makes Mr. Locher's old place on Park Avenue and listed with Prudential Douglas Elliman, is on the market for $2.495 million look small by comparison.

The fallout from the big spenders that were part of Lehman Brothers continues. Blogging Stocks leads us to an article in the Wall Street Journal on the art sales of chairman and CEO Dick Fuld. Fuld and his wife Kathy have been avid collectors of modern art for years. Now some of their collection will be sold at Christie's as part of their modern art sale on November 12, during the New York fall auction season.

The piece above "Study for Agony I" by Arshile Gorky is one of 16 postwar drawings owned by the Fulds that have been consigned. It is estimated at $2.8 million. The estimated total is between $15 and $20 million and the WSJ reports that the sale is guaranteed meaning that the Fulds will receive money whether the pieces sell during the auction or not.

Fuld's net worth has fallen along with Lehman's stock prices but his savvy collector wife might be bringing him a nice profit. Kathy Fuld is a a longtime collector and Museum of Modern Art trustee with an eye for the undervalued pieces. A piece the couple is selling Willem de Kooning's 'Woman' is estimated to bring in up to $4 million at Christie's in November and sold for half that in 2001.

Don't feel too sorry for the Fulds they still have enough art to fill their homes which include a Greenwich, Connecticut mansion, a Park Avenue co-op and a Sun Valley, Idaho vacation home.

Last week we saw the Maryland home of Freddie Mac CFO, Anthony Piszel, now check out another estate being sold, I'm assuming, due to the financial crisis. The Real Estalker Mama alerted me to the extravagant Hamptons getaaway home of Joseph Gregory. Who is Joseph Gregory? He was, until last June, the Chief Operating Officer, President and Managing Director for Lehman Brothers. Gregory's Hampton's home is a relatively new eight-bedroom spec house which was built on 2.5 acres in Bridgehampton, New York. The Real Estalker Mama reports that after buying the home for $19 million, Gregory and his wife Niki spent several million dollars in renovations. The home includes two master suites, a second floor deck, The property includes a pool area surrounded by plush green lawns and a sandy path leading across the dunes and to the ocean. The astounding thing here, aside from the $32.5 million pricetag, is that the couple reportedly spent just 14 days in the home over two years that they owned it.

UPDATE: This home is now listed at $27.9 million.

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