The Australian Financial Review finally gives a reasonable explanation for the sudden exit of Tim Goodman from Sotheby’s Australia only a year after he abruptly switched his First East auction holding company from Bonhams Australia to Sotheby’s Australia by acquiring the license to use Sotheby’s name as the firm exited the Australian market:

Goodman told AFR last week that the mix of high debt, greater than anticipated costs, a bad year for the art auction market, and far tougher banking conditions had underpinned his decision to bring forward his three- to four-year exit strategy in favor of Geoffrey Smith — and get out of Sotheby’s now. “In view of the current market and the performance of the top end, First East’s debt levels were too high,” Goodman said. “And this gave me some discomfort. And the reason for this is the Sotheby’s acquisition was done mostly with debt rather than equity.”

Goodman also says that the strains with Bonhams (still a 9.2 per cent shareholder in the Goodman-controlled First East) complicated the situation.

“I didn’t recapitalise because there were obstacles in the First East shareholders agreement, particularly in relation to Bonhams stake,” he says.

In other words, Goodman got jammed up in the bottom of the auction market cycle with a cranky minority shareholder and–we’re guessing here–some equally fed up equity partners who all helped him decide it was a good time to retire.

(With thanks to TK for the tip)