Art title insurance can help hedge against an uncertain past By CharlesanaTbomas Danziger as one of our smarter clients once observed, the problem with the future is that its hard to predict. This is particularly true in the art world, where uncertainty regarding ownership of works of art can be extremely damaging, and where a title dispute can result in huge legal expenses. On the bright side, this is one reason we have such nice offices on Park Avenue.

Defective title is especially problematic in the U.S., because the law here holds that the thief of a work generally cannot pass good title to a purchaser. This means that unwitting buyers of stolen goods often end up surrendering the art without any compensation. And since there is no official governmental registry of title to artworks that would clearly show who owns a given piece —like, say, the land records maintained by all states —would – be art buyers have traditionally had to rely on their own due diligence to avoid disaster, with predictably mixed results.

WARHOL FOUNDATION CITES LEGAL COSTS AS GROUNDS FOR DISSOLVING THE BOARD the andy warhol Foundation for the Visual Arts has announced that it will pull the plug on its litigation – plagued 16 – year – old Andy Warhol Art Authentication Board. The decision, which sent shock waves through the art market, followed the organizations in – depth review of its activities. “Authentication became an issue right away,” explains Joel Wachs, president of the New York – based foundation, “because we spend about $400,000 to $500,000 a year in regular expenses on it, and thats been coupled with millions and millions of dollars in legal expenses for frivolous lawsuits that have all been thrown out. The feeling is very clear that that money should be going to artists and arts organizations and not to lawyers.”

Nevertheless, the foundations withdrawal from the authentication arena does not sit well with many in the art world. “They cannot just say bye – bye,” insists Jose Mugrabi, who owns more than 800 Warhols and who, with his sons Alberto and David, is a significant market force at auctions and in private sales. “They have to keep going. Theres no logic to it, and I think its irrespon – sible on their part. There still has to be a process for approving works.”

Octobers two – week marathon of art fairs and auctions in London and Paris, besides proving surprisingly successful, spurred a vigorous debate about the relative merits of Frieze and fiac Devoted to primary – market contemporary art, Frieze is nearing its 10th anniversary in its trademark Regents Park tent, while fiac, at 38, presents both secondary – market modern art and contemporary material in the elegant ambience of the renovated Grand Palais.

“The general consensus is that Frieze is going downhill while fiac is going uphill,” reports Thea Westreich, a seasoned New York – based art adviser who combed through both fairs. “Im not sure I take that position, but I will definitely say fiac has been improving steadily over the past several years and has become a destination point for serious collectors.”

Less qualified in his praise is the New York dealer David Zwirner, an exhibitor in both London and Paris, “fiac is strengthening as a fair of quality but also as a fair where you can sell a bunch of art,” he says, noting that his booth there attracted Asian, European, and North and South American buyers, including a Mexican collector who purchased Donald Judds Untitled, 1986, for $450,000, and an American who picked up Dan Flavins Untitled I, 1989, for $550,000. As for Frieze, although he made some significant sales – Neo Rauchs 2003 Haus des Lehrerswent to an American for $1.35 million, and Daniel Richters aptly titled London is the place forme, 2011, to the Chinese – Indonesian collector Budi Тек for $350,000 – Zwirner says the fair disappointed some clients. They felt “it was safe and commercial and hard to find something exciting and new. I had some very major collectors tell me they didnt like it, and one even said, Im not going to come back.”

Ketterer Kunst, of Munich, is at the top of its game. The family – owned auction house, which just celebrated its 67th anniversary, realized its best – ever annual earnings, $36 million, in 2010 —thanks in part to the $2.3 million earned by an Ernst Ludwig Kirchner portrait, which tied with a Pieter Brueghel as the most expensive painting sold in Germany that year —and has announced a 2011 midyear sales total of $17 million. Julia Halperin spoke with Robert Ketterer, the firms president, on the eve of its December auctions.

Last year Ketterer netted a record $36 million. How do you account for this success?
Weve made our selection even more discerning – last years result was achieved with 27 percent fewer items in our live auctions than in 2007, the previous record year. The Internet also brings in a lot of new clients, and on our Web site we sell a great many objects every day. In part because of this, we have had a 25 percent increase in new buyers – not just new bidders, but new buyers – for every auction.

How would you characterize Germanys place in the global auction market?
There are a lot of auction houses here, but only three or four major ones. And there is a limit to what people will spend. For example, we have a Hermann Max Pechstein painting from 1910 in our winter modern sale, and I am absolutely sure that no one will bid beyond €2 million or €3 million. In London or New York, it might easily get more.