SALANDER ART TO BE SOLD AS FIRST REPUBLIC MAKES CONCESSIONS

European sculpture and paintings entangled in what prosecutors called the biggest art fraud in New York history are headed to auction, reports Philip Boroff for Bloomberg.

Salander-O’Reilly Galleries acquired the artwork, some of which dates back to the twelfth century, before the gallery’s bankruptcy in 2007. Pieces may be offered in June, said Robert Feinstein, a lawyer who represents unsecured creditors in the case.

“We are preparing for a sale in that time period,” Feinstein said in an interview.

Feinstein disclosed in US Bankruptcy Court in September that there were “advanced negotiations” with Christie’s International about a consignment. In the interview, he said that there hasn’t been an agreement with an auctioneer. Toby Usnik, a Christie’s spokesman, declined to comment.

The gallery collapsed amid lawsuits alleging that proprietor Lawrence B. Salander, now sixty, sold art without permission and without remitting proceeds. More than four hundred people and businesses have filed court papers seeking to retrieve money and art.

Last year, the dealer was charged with 103 counts of fraud, forgery, and other crimes. He pleaded not guilty and is free on one million dollars’ bail. Prosecutors said collectors, artists, and investors who did business with Salander lost more than ninety-two million dollars.

US Bankruptcy Court in January approved a settlement between unsecured creditors and Bank of America’s First Republic unit that cleared the way for an auction. First Republic lent the gallery about thirty million dollars starting in 2002.

“The bank had every right to be paid back first from the proceeds of art,” Feinstein said in the interview, citing loan documents.