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.
