14 major works of art to be auctioned in London and New York
Two paintings by the Anglo/Irish artist William Scott and an Andy Warhol Dollar Sign canvas are going under the hammer to settle the debts of Irish property tycoon, Derek Quinlan. The works of art are estimated at $3m. A total of 14 works will be sold in New York and London in November.
NAMA, the Irish government agency created resolve the issue of risky commercial loans from this EU country’s troubled banks, took control of Quinlan’s assets in April after he failed to present a debt repayment plan. Other works include Warhol’s Dollar Sign, Yeats, Man Doing Accounts and two William Scott still life oils.
The collapse of the Irish property market has forced Irish banks to have property development loan assets secured on property with a market value significantly below the amount owed. Many of the loans are now non-performing due to debtors experiencing acute financial difficulties. Both factors have led to a sharp drop in the value of these loan assets. If the banks were to recognise the true value of these loans on their balance sheets, they would no longer meet their statutory capital requirements. The banks therefore need to raise further capital but, given the uncertainty around the true value of their assets, their stock is in too little demand for a general share issuance to be a viable option. The banks are also suffering a liquidity crisis due, in part, to their lack of suitable collateral for European Central Bank repo loans. Along with their capital requirement problems, this is limiting the banks’ ability to offer credit to their customers and, in turn, contributing to the lack of growth in the Irish economy.