Friday Tips: When Your Gallery Files Chapter 11

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I received this question from an artist last week, and felt it warranted public discussion: 

Dear Paul: 

Q:  Recently I learned that one of my galleries in a large city is in Chapter 11.  I do not know if my artwork is subject to confiscation by the debtors at some future time.  I like the gallery owner very much. The family-owned gallery has been in business for 22 years; the son of the owner has managed the gallery for the past 15 years.  I now have 17 paintings in the gallery.   I am in a quandary as to what I should do, if anything.  Do you have any advice for me?

A:  Your dignified handling of this tricky and, unfortunately, all-too-common occurance is to be lauded.  The vast majority of galleries go under, though not all are forced into bankruptcy.  There are several reasons for this that I don’t have time to get into now, but many relate to the traditional way in which most galleries are run, which simply doesn’t work well.  Many galleries and artists are waking up to this truth, and learning how to market more successfully without sacrificing the caliber of the work, but teaching that old dog new tricks will take a generation or two.  I aim to help with the teaching.

Your artwork, if it was consigned, should not be subject to confiscation through any legal process, no matter what the debt situation might be.  Assuming the work was consigned, the gallery does not own it, and hence the work cannot be counted among its assets.  Therefore if I were you, I would politely ask that the work be returned until the storm has either passed, or the ship has sunk.  If you leave it with the gallery during the legal process, it may get tied up in court through some legal nonsense, and you may indeed lose the work, or at least be denied possession of it until the issue has been resolved.  You don’t want to be caught in that trap.  If this family respects you as greatly as you obviously do them, they will understand.

Look, it’s apparent they’ve done their best.  I admire their tenacity and longevity.  But you’re now faced with a business decision.  Those decisions, like many in the professional world, often have to be made without emotional or sentimental consideration.  That doesn’t mean the person making the decision can’t be just or compassionate; it just means you’ve been left without a viable choice, and have exhausted all other options. 

In the end, do what you’re most comfortable with.  Many times I’ve taken minor losses in order to save someone a crushing blow, or to bolster their confidence.  I consider this an important aspect of the art business–or any business–where humane behavior outweighs what can sometimes become an inhumane drive toward profit.  But never have I been willing to sacrifice my gallery’s security, or that of my family and artists, in order to serve the same need.  That would help no one, and would damage many.

Bonne Chance.

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