If The Wildensteins Lose Their Tax Case, Will They Borrow Against Their Art or Sell It?

James Tarmy takes a long look at the Wildenstein family’s assets in response to the French governments tax suit against the family. But what is revealed tells us a great deal about the use of art as an asset.

Shortly after the death of patriarch Daniel Wildenstein, the family put together a trust of $250m worth of art to back a $100m loan, according to Tarmy’s Bloomberg story:

The proposal called for the Wildensteins’ Delta Trust to pledge a mix of pieces by artists from diverse periods. (The works in the trust included, in addition to paintings from Pierre Bonnard and Fragonard, a Picasso sketch of Guy and Alec’s grandmother, Madame Georges Wildenstein, from 1918.) In exchange, Coutts would supply the cash and invest it on behalf of the Delta Trust. The deal wasn’t completed, according to a person familiar with the negotiations.

Just because Coutts didn’t do the deal doesn’t mean the family wasn’t able to lever up. Since Daniel’s death, art values have increased substantially and the family has gathered its assets closet to home, including a re-attributed Caravaggio that was on long-term loan to the Met in New York now conservatively estimated at $100m.

If the case in France goes against the family, their may be a net benefit for the art market. Starved for high quality material, the market could leap at works the Wildensteins might want to sell to satisfy the French claims.

The Ugly Battle Over the Wildenstein Art Empire (Bloomberg)