Ralph Esmerian, jeweler, art collector and former chairman of the now defunct Folk Art Museum in New York City, is currently serving a six-year prison term for wire fraud and other charges. As part of his fraudulent scheme, Esmerian, promised to donate 263 works of art to the Folk Art Museum in 2005. At the same time, Esmerian used the same works of art as collateral to secure multimillion-dollar loans from Sotheby’s and Christie’s. The United States Bankruptcy Court for the Southern District of New York recently approved the sale of all but 53 of the works at forthcoming Sotheby’s auctions. Under an approved settlement agreement, the Folk Art Museum was permitted to keep 53 of the most valuable works and the balance was to be sold at auction. Proceeds of the auction will be used to pay unsecured creditor claims in the bankruptcy. Sotheby’s and Christie’s each have a claim against the Esmerian estate. Christie’s filed an objection against the Sotheby’s sales in the bankruptcy proceeding, which alleged that Sotheby’s intimidated the trustee into granting it authority to auction Esmerian’s collection.
In other related news, the vacant Folk Art Museums’ building, which is located next to New York’s Museum of Modern Art (MoMA) is slated for demolition. According to reports, MoMA is set to take over the space and has indicated that the destruction was necessary because the current structure does not demonstrate acceptable esthetics. The decision to raze the building has brought much criticism.