Fate of art works hangs in balance
EARLY last year, Cameron Hall penned a submission to the Cooper Review, arguing for the retention of art works as investments in self-managed superannuation portfolios.
EARLY last year, Cameron Hall penned a submission to the Cooper Review, arguing for the retention of art works as investments in self-managed superannuation portfolios.The managing director of Smith & Hall was grounded in the self-managed super market, with a claimed business model of selling art works (at retail prices) to investors insuring and renting the works to corporate offices on the owners' behalf, and then delivering a rental return to the owners.The reality, liquidator Sule Arnautovic of Jirsch Sutherland said this week, was the business was insolvent for at least a year before his appointment as administrator in October 2010.He claims there was no strong demand for the thousands of art works to adorn corporate offices. In some cases, a single work of art was sold to multiple investors, with the funds used to pay existing owners their rental returns, Mr Arnautovic said.He told BusinessDay he would shortly issue a statement of claim against Mr Hall for insolvent trading, relating to $200,000 in unpaid taxes by his company, International Art Holdings Pty Ltd, trading as Smith & Hall.Earlier this year, Mr Hall told investors the financial downturn had caused the business to fail.While the amount owed to creditors had not been finalised, an initial report indicated it could be $3.6 million.Mr Arnautovic said he had sent his reports to the Director of Public Prosecutions and the Australian Securities and Investments Commission.Nearly 1000 art works claimed to be worth up to $4 million were caught up in the collapse, as the liquidator and frustrated owners set about locating them.Unclaimed art works, works where ownership was in dispute and works where the owners had refused to pay a storage levy, were auctioned by GraysOnline, realising $80,000. After deducting costs, there were no funds left for the owners, who now join the queue of creditors.When BusinessDay first reported on the collapse of Smith & Hall in March, attempts were made to contact Mr Hall for comment, but none was forthcoming.It is alleged artists who had been consigned on commission were not paid and are thousands of dollars out of pocket. Some have since been discussing with distressed buyers and lawyers as to who has legal title of the works.Janet Storrier, wife of artist Tim Storrier, said she had been contacted by the police and had given a witness statement in May."The fact is government regulations in respect of art works in the super funds encourages these third party practices," she said. "It has been an unfortunate foray for a lot of people."