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A Dealer and Collector Describes His Experiences with Berry-Hill

We spoke with the Honorable Joseph P. Carroll on February 1. Carroll is one of the preeminent collectors and experts on Korean Buddhist art in the West. He is also chargé de mission for the president of the Musée Guimet and has served as the Guimet's consulting curator on Korean art. He has been a White House Fellow and has served as special assistant to the Secretary of the Treasury. He was named an officer of the French Legion of Honor in 2005. He was a member of the faculty and associate-in-residence at the Korea Institute of Harvard University's Fairbank Center.

Carroll has been on the boards of E.F. Hutton International, Geneva, Switzerland; the National Symphony Orchestra of the United States, Washington, D.C.; the Union International Contre le Cancer (UICC), Geneva, Switzerland; and the M.I.T. Club of France, Paris, France.

He collects and deals in art in New York City. Carroll gave us a lengthy interview, tape-recorded at his insistence, with all of his comments on the record. We have edited his comments, however, for space and appropriateness.

We asked how he became involved in the Berry-Hill/Coram bankruptcy proceedings. Carroll said he had consigned material to them before with no difficulties. He did so again on December 5, 2005, just three days before the firm declared bankruptcy.

The absurdity of the timing of his consignments and loan was very striking. He asked, "Why would I want to, on December the fifth, consign more than a half a million dollars of goods to Berry-Hill, on loan and consignment, if I knew they had filings against themselves and were having discussions of bankruptcy? Of course I wouldn't."

We asked, "What's the current status of your paintings there?"

"Right now, I have been told, as of today, the loans which I have for the exhibition can be sent back to me, and that any work which is on consignment there is totally blocked, and I can't touch it. I really don't understand why.

"There's an order from the judge on the goods which I lent there, and I believe there's an order of the judge on selling the goods, but I'm not interested in them selling my goods, I'm interested in them returning my goods." (See the main story for an explanation.)

Carroll said that, based on his experience in spending more than a million dollars a year on art, what most of the major galleries in New York City have on their walls is not owned by them. "It's predominately owned by other parties: either estates, other artists, living artists, or on consignment. And this is taken as the nature of the business, because of the very high cost of running the galleries and also now the very high cost of art.

"The nature of the art business has changed very substantially, and an art dealer today is fundamentally running an art gallery, he's not in the business of identifying great art, buying it, and trying to sell it. It's not the nature of the business anymore; it was the nature of the business fifty years ago, it's not the nature of the business today.

"What I see is, this was a business which was predominately based on trust...I think the basic fabric of trust of consignors in dealing with major galleries, surely in New York City...has really been shattered...And the idea that you can't trust a prominent gallery like Berry-Hill, that they're going to go bankrupt in two days, is absolutely absurd...It's very necessary to have a much more realistic and meaningful standard of what constitutes fair dealing."

Carroll feels that self-policing organizations, such as the Art Dealers Association of America, have not been doing their jobs.

We asked, "You've stated the situation in very broad terms, just one general question. Was there ever a time when you were consigning art to Berry-Hill, or any other New York City dealer, that they said, 'You should probably file a UCC statement on this painting you're bringing me for consignment?'"

"I, the first time in my life that I ever filed a UCC, I did file a UCC against Berry-Hill I believe was in November of last year. And the reason I did, they had asked me for some loans of goods which I had with another dealer on consignment, and that other dealer refused to have anything to do with Berry-Hill. They refused to go ahead and lend them the goods on my behalf. And when I saw that, it struck me that if other very prominent dealers in the field were unwilling to just even lend them art which I had on consignment there for an exhibition, it would behoove me to make a filing, which is what I did."

Carroll thinks that the issue here is the rights of consignors, and, "unfortunately, the law treats the consignment of art to the gallery the same way they would treat the consignment of screwdrivers to a shop.

"One of the difficulties here is that Berry-Hill appears to be responding to this problem with hype as opposed to a very realistic determined effort to deal with the issues. What we're seeing so far, and what's been written, and I was very pleased that you called me, is fundamentally hype. The people who have both consigned goods or are creditors at Berry-Hill at this point in time are at major risk."