Published: April 22, 2008
Amid the whirlwind of controversy swirling around folk art collector and jeweler Ralph Esmerian, Christie’s was forced to cancel its April 15 jewelry auction, which it had prominently billed as “the most important collection of period jewels.” The auction was canceled for a second time in as many days on the evening of April 16, just minutes prior to the start of the sale. It was the final result of a spate of legal wrangling in New York courts that for two days teased collectors, consignors and creditors with on again/off again signals.
Helen Chaitman, a lawyer representing Esmerian, whose collection was the focus of the sale, told Antiques and The Arts Weekly, “The jewelry has been withdrawn from auction. It’s not going to happen.”
On April 8, Chaitman filed an emergency motion to stop the sale of 115 Esmerian family heirlooms valued by Christie’s at $34 million. The sale had been set in motion by Merrill Lynch & Co., a creditor to which Esmerian is said to owe more than $180 million.
According to media reports, lawyers representing Merrill Lynch filed a complaint with the New York Supreme Court on January 21, declaring the loan in default and asserting that Esmerian had pledged some items from his collection as collateral to both Merrill Lynch and to Christie’s. In 2005, Esmerian acquired Fred Leighton’s estate jewelry business, financed in large part by the loan from Merrill Lynch. The loan was reportedly secured with precious stones and jewelry, and also at least one of the folk art treasures he had promised to the American Folk Art Museum.
Following the appellate ruling to halt the sale, Merrill Lynch did not give up. On the morning of April 15, it brought the case back to New York State Justice Helen E. Freedman, its argument being that conducting the scheduled auction was the best way to get fair market value for the jewels. At about noon, Freedman ruled in favor of Merrill Lynch, giving a green light to the Christie’s auction, which was scheduled for 6 pm.
Lawyers representing Esmerian, however, went back to the appellate division to request that the auction be halted. They were rebuffed, but at 4:20 pm, Chaitman filed for Chapter 11 on Esmerian’s behalf, effectively canceling that evening’s auction by freezing the creditor’s assets. “It’s something we always knew was the ultimate strategy,” Chaitman told The New York Times. “We wanted to avoid it.”
At 5:30 pm on Tuesday, Merrill Lynch’s lawyers filed papers with Judge Robert Drain of the US Bankruptcy Court of the Southern District of New York, asking for a hearing to lift the stay on the auction.
Just before the auction was to begin at 6 pm on April 15, François Curiel, Christie’s chairman for jewelry sales, announced to patrons who had assembled in the auction gallery that the sale would not be conducted.
In a statement, Christie’s said, “This evening’s auction was to be conducted on behalf of a creditor of the owners. Earlier today, the owners of the property tried to stop the sale in state court. That court refused to block the auction. Having failed in that court, at the 11th hour, the owners of the property declared bankruptcy in a further attempt to stop the sale. The bankruptcy court has set a hearing for [April 16] to decide if the sale can go forward. We remain very optimistic that we will be able to proceed with the auction tomorrow at 6 pm.”
That was not to be, however. The sale that Christie’s characterized in a presale press release as “the most spectacular and comprehensive collection of period jewels from the Seventeenth Century through modern day” and featuring such treasures as a pink diamond ring, estimated to sell for as much as $15 million, was again canceled on April 16 †this time for good.
“After two days of court hearings, the sale of Rare Jewels and Gemstones: The Eye of the Connoisseur could not take place, after a decision from the New York Bankruptcy Court,” said a Christie’s spokesperson. “We were obviously disappointed not to proceed with the auction.”
Chaitman said that Esmerian is “very happy that his jewelry collection has been respected.”
On May 22, Sotheby’s will offer another Esmerian gem, this one a masterpiece of American Nineteenth Century painting, “The Peaceable Kingdom with the Leopard of Serenity” by American folk art artist Edward Hicks. The painting had, until last month, been on display as a promised gift at the American Folk Art Museum. Set to be offered in a separate single lot sale immediately following Sotheby’s auction of American paintings, drawings and sculpture, it is estimated to bring $6/8 million.
5 Church Hill Road / Newtown, CT 06470
Mon - Fri / 8:00 am - 5:01 pm