Sotheby's, Ritchies sever ties over late payments

Sotheby's Canada says clients owed money by its associate, Toronto-based auction house Ritchies, for works hammered down in the spring will be paid by early next week.

"We've contacted all the consignors and assured them that we're going to pay up the amount that's due to them without delay," David Silcox, president of Sotheby's Canada, said Thursday in a telephone interview.

"In fact, they've already been informed and the process will probably be tidied up today, tomorrow or for Monday or Tuesday of next week."

'We're just doing it because it was the right thing to do.' Sotheby's Canada presidentDavid Silcox

Sotheby's announced this week it is severing ties with Ritchies after it failed to meet a deadline to pay a number of clients who put works up for sale at the Sotheby's May 25 sale of "Important Canadian Art."

New York-based Sotheby's has been holding two auctions of Canadian art annually at Ritchies in Toronto since February 2002.

Under their auction services agreement which Sotheby's doesn't plan to renew when it expires July 31 Ritchies is responsible for payment to consignors from those sales. Consignors are individuals or dealers who use an auction house to sell their artworks.

Sotheby's says between 25 and 30 of some 110 consignors from the May 25 auction were not paid by the deadline of on or around July 8.

Silcox said all but one of the consignors still owed payment are based in Canada, and Sotheby's will reach into its own pocket to pay them.

"We're just doing it because it was the right thing to do," he said. "We're not legally obliged to do it."

Weaker than expected spring auction

The spring auction netted total sales of $3.5 million, short of its pre-sale estimate of $4 million to $5.5 million. The biggest draw was a Lawren Harris sketch of British Columbia's Emerald Lake that fetched $175,000.

This is the first time in the history of their relationship that Ritchies has failed to make payments on time, and Ritchies says it has also been in contact with consignors and assured them they will get their money.

'We're not talking about not paying themIt's just simply a delay in payment.' Ritchies president Stephen Ranger

"We're not talking about not paying them," said Ritchies president Stephen Ranger. "It's just simply a delay in payment."

Ranger added that Ritchies, in its 40 years in business, has never not paid its consignors.

"It's what we do, it's a sacred trust," he said. "We're disappointed that Sotheby's has decided to sever the relationship with us."

"As far as we were concerned, there were other issues as well as the delay of payment that caused that to happen."

Ranger couldn't say what those other issues are, or why Ritchies failed to make the payments on time.

And Silcox said he doesn't know "what Ranger meant" when he said there were "other issues."

Sotheby's to continue twice-yearly sales

Sotheby's and Ritchies are independent of each other and their only association is for the purpose of holding the two annual sales of Canadian art.

Sotheby's says it will continue to hold two sales of "Important Canadian Art" per year in the city. The fall sale is scheduled for late November or early December at an undetermined venue.Sotheby's has been running its own auctions in Canada since 1967 and has had an office in Toronto since 1968.

Before its relationship with Ritchies, it held auctions in such venues as city hotels, the Royal Ontario Museum and the Design Exchange.

Ranger said Ritchies will also probably hold two sales of high-level Canadian art per year, with the first to take place in late fall.