- 5 - underlying basis for the attached appraisal. We have valued these works of art on an individual basis as of the relevant valuation date. Furthermore, we have not taken into account any dealer’s discount. It is common practice in the trade for a gallery to sell a work to another dealer at a discount ranging as high as 40% off the value in the retail market and, more commonly, in the one third range, so that the dealer may make a profit on resale. Lastly, we have not undertaken to determine the value of the Gallery as a whole. * * * Based upon its review, Sotheby’s determined that the undiscounted value of the collection was $25,876,630. Sidney’s estate determined the discounted value of the collection by first applying a discount totaling $4,059,540 to account for the large number of works in the collection by Jean Arp, Louis Michel Eilshemius, Auguste Herbin, Morris Hirshfield, Piet Mondrian, Grandma Moses, and Kurt Schwitters. This discount had been recommended by Sotheby’s. Next, a $350,000 discount was applied to account for the gallery’s partial interest in three works of art in the collection. A $2,862,279 discount was then applied to account for the portion of the collection that would likely be sold in the dealer market (as opposed to the retail market). Finally, a $6,201,604 discount was applied to account for (1) the inability to sell the gallery in the retail market for individual works of art, (2) the gallery buyer’s not paying the full resale price of the underlying assets acquired in thePage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011