Bankrupt Lehman stands to make $10M in Sotheby’s art auction

Lehman Brothers Holdings Inc., the investment bank liquidating in bankruptcy, may reap more than $10 million from an art sale at Sotheby’s this fall, including a Julie Mehretu painting estimated to fetch a near 40-fold profit.

The swirling, abstract by Mehretu, the 2001 “Untitled 1,” is estimated to sell for as much as $800,000, according to Sotheby’s. The bank acquired the painting in 2001 for $21,726. Mehretu, who has a show at New York’s Guggenheim Museum, recently completed a mural for the lobby of Goldman Sachs Group Inc.’s New York office.

Lehman is selling more than 400 contemporary artworks at Sotheby’s in New York on Sept. 25 in a single-owner sale, with the proceeds going to creditors.

“The idea wasn’t to purchase for investment,” said Naomi Baigell, a Sotheby’s senior vice president in charge of corporate art services. “They showcased what was going on each year. The idea was to bring new culture to the workplace.”

The sale’s projected top lot is Damien Hirst’s 1993 “We’ve Got Style (The Vessel Collection-Blue)” — a mixed media installation, estimated to sell for $800,000 to $1 million. The work was acquired a year after it was made.

Other artists in the collection include Richard Prince, John Currin, Gerhard Richter and Liu Ye.

The works had hung on the walls of both Lehman and investment firm Neuberger Berman Holdings LLC, which bought itself out of Lehman last year. Lehman filed the biggest U.S. bankruptcy on Sept. 15, 2008.

Neuberger has been associated with progressive art since the 1940s when founder Roy Neuberger began amassing a collection. He donated his works to the Neuberger Museum of Art at the State University of New York in Purchase, motivating the firm to begin collecting anew. From the 1990s the company bought cutting-edge art, first guided by partners and later by professional curators.

Lehman shared a legacy of art appreciation. The Robert Lehman wing at the New York’s Metropolitan Museum of Art is named for the grandson of one of the company’s founders.

Lehman’s collection once numbered around 3,500 pieces. The Neuberger partners were offered an option to buy some of the collection and chose to keep some of the lesser-value items.

“We are retaining a significant portion of our collection,” said Randall Whitestone, a Neuberger Berman spokesman.

Lehman has already held a series of auctions of mostly lesser-value artworks. Three sales held in Philadelphia at Freeman’s Auctioneers totaled $2.2 million.

Sotheby’s May 27 consignment agreement, filed in court papers, reveals the auction house is not charging Lehman any commission for selling the collection and will tack on an additional undisclosed “fee for consignment” taken from the buyer’s fees. The sale is subject to bankruptcy court approval, Sotheby’s said.