ONLINE auction house Auction Atrium has ceased trading, still owing a six-figure sum to consignors. The firm is likely to formally enter liquidation later this month. How much vendors and other creditors receive ultimately depends on the value placed upon the assets of the firm.
Peter Whalley, a partner in the
Southampton office of Thames Valley and South Coast accountants
James Cowper, who have been called in as administrators, believes
Auction Atrium's bespoke online software and timed bidding platform
has a considerable value and expressions of interest have already
been received.
He added that, as there were no
secured creditors (such as a bank or mortgage company) or
preferential unsecured creditors (unpaid employees), vendors would
be first in line to receive a percentage of any money realised from
the sale of assets.
Action Atrium staff were seemingly
under the impression a client escrow account was in place, but
managing director Allison Earl Woessner told ATG that the financial
structure of the company had changed in July 2009, following new
backing and the appointment of financial director Roy Anderson. It
meant that vendors' money could then be used as operational cash
when deemed necessary.
She said that the management team
continued to receive messages of support from clients who believed
Auction Atrium had had a positive impact on the London auction
market and stressed that her number one priority was paying
vendors.
Founded on Kensington Church Street in
2006, Auction Atrium was conceived as a groundbreaking enterprise,
combining the benefits of a bricks-and mortar auction house in the
heart of the UK's antiques trade with the convenience of ongoing
online auctions.
With first one then two showrooms, the
firm enjoyed plaudits for sales in a number of disciplines and had
became members of the Society of Fine Art Auctioneers in January
2011.
Rumours of financial difficulties at
Auction Atrium first emerged in the New Year when consignors
complained they had not been paid within the 30-day period
stipulated in the conditions of sale. Staff members told ATG that
they had been informed technical issues were to blame. However, as
Ms Woessner confirmed to ATG, Auction Atrium's financial backer had
told the management on January 4 he would no longer offer the firm
a credit line. They had effectively run out of money and
immediately sought insolvency advice.
Business continued as the management
looked for a new investor.
A musical instruments sale, assembled
by consultant and former Bonhams specialist Pippa Wilkins, closed
on January 16, followed by the firm's mixed-discipline Kensington
Sale and Selected Fine Jewellery, scheduled to close on the evening
of Wednesday, February 1. Both were cancelled at the eleventh
hour.
Later in the day, as the insolvency
firm arrived, staff (who had been paid up to January 25) were asked
to sign redundancy forms or to stay on to oversee the return of
merchandise to clients on the understanding they would be paid on a
week-by-week basis if funds were available.
Moved by the distress caused to their
clients, some former staff members continue to work unpaid to
oversee the return of merchandise, but formally just three members
of the management team remain at the firm: Ms Woessner, founder and
managing director, Colin Monk, company secretary and Asian works of
art specialist and IT director Malte Riesch.
Chairman Paul Whitfield, whose CV
includes influential tenures at Christie's South Kensington,
Christie's Glasgow, Bonhams and Sotheby's, had resigned on January
19. After the firm closed its doors to angry scenes on February 1,
he sent an email to staff saying he felt his position "was being
prejudiced and a regrettable lack of trust had arisen between
management and myself".
Despite Auction Atrium management's
continuing hopes of a white knight investor, steps have begun to
put the company into liquidation - a process that is expected to be
finalised at a shareholders' meeting on February 22.
Before then Mr Whalley said every
effort was being made to return items still held by Auction Atrium
to their rightful owners, while consignors who remain unpaid should
already have received notice from the company asking them to
register what they are owed.
Numbers have yet to be finalised, but
ATG understand around £125,000 is owed to over 100 consignors. As
well as the January musical instrument sale, it is thought vendors
have yet to be paid from the firm's three December sales: Perfume
Bottles & Ephemera (December 17), the Kensington Sale (December
14) and Fine Jewellery (December 13), with some accounts
outstanding from a November 21 African & Oceanic Art sale
curated by Paris dealer and former Sotheby's tribal art specialist
Jean-Baptiste Bacquart.
Additional money is owed to other
parties, including the financial backer, whose loans to the company
now make him Auction Atrium's largest creditor.
Contact James Cowper on 02380 221 222
for further information.
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