If you’ve ever wanted a window on the workings of an art gallery during this recession, we’re getting a glimpse this summer because Ramis Barquet, who operates a gallery in West 24th St. in New York, has filed in the Southern District of New York for a Chapter 11 reorganization for the gallery — AKA Barquet Group — as well as personal bankruptcy.
According to a recent article in The Deal, which cited court documents, Barquet wants “to protect its assets from creditor SageCrest II LLC after negotiations with the company fell through.”
Barquet was founded in Mexico, and used to concentrate on Latin American art, but he has since broadened his offerings to include European contemporary artists as well.
The Deal article, drawing on court papers, says Baquet Group used to earn $15- to $20 million a year, but that in recent years, sales and earnings declined materially while expenses also increased. Barquet himself began to make loans to the company:
In 2008, for example, he loaned $2.6 million to the company, and in 2009, he loaned $2.2 million, with additional loans made in 2010. Over the years, between loans and capital contributions, Barquet contributed more than $9 million… Ramis Barquet has reduced his fixed salary substantially over the past few years, but “fell into the unfortunate habit of taking no specific salary but, instead, drawing discrete amounts to be charged to [his] account…”
Barquet Group also borrowed about $6 million from ACG Credit Co., which is owned by Ian Peck, with works of ar serving as collateral. At some point, to settle his debt, Peck turned over Barquet’s obligations to Sage.
Now, says The Deal,
Ramis Barquet said in court papers that the company is illiquid because the art inventory can’t be sold at its full value in the currently depressed art market and must instead be divested slowly…
The company listed $1 million to $10 million in assets and liabilities. SageCrest (5.95 million), Sotheby’s ($1.43 million) and 601 West Associates LLC ($905,804) are listed as the company’s largest unsecured creditors.
The Barquet Group must file additional information by Oct.26. The Deal’s site is not public, but I’ve arranged for access to its article through this link. The initial article is here.
But wait, weren’t art galleries doing great business in the last year or so, because rich collectors are continuing to spend?
Not necessarily. Recent reports also suggest that a only the very top-tier galleries are doing really well. For the others, perhaps including Ramis Barquet (it may be true that the gallery had other management problems, I do not know), times are still tough.