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If a gallery goes bankrupt—-as businesses are wont to do in these recessionary times—-creditors can seize it and all of its assets within under current D.C. law. That includes the work the artists have entrusted the gallery to sell. And while that scenario hasn’t yet occurred in the District, one group is working to ensure it never will.
“It’s a loophole that was inadvertently created because no one was paying attention. It benefits no one in particular,” says Rob Bettmann, chair of D.C. Advocates for the Arts. “If we don’t address it before there’s a problem, there’s a big problem.”
Bettmann learned of the loophole through a staffer of Ward 3 Councilmember Mary Cheh, who heard about it from attorney Janet Fries. Even though an incident like this hasn’t yet occurred in D.C., artists and collectors have a reason to be concerned: There are precedents for it in New York and Minnesota; one case even involved Robert De Niro.
Bettmann is circulating a petition that addresses the issue of consignment—-which is the type of contract artists and collectors sign when they give their work to galleries to be sold—-that will give the lending party recourse if the work is seized by creditors.
“This petition is progressive—-it doesn’t just address ownership, and how an artist would deal with [bankruptcy] after the fact,” says Bettmann. “Artists should be able to recoup their court costs if a gallery goes bankrupt and they need to sue the creditors. Unless we have in there that lawyers can recoup court costs, artists will have an impossible time getting lawyers to bring suit…For collectors, it’s important that their investments are protected, as well.”
Bettmann is still working to gather signatures, and he hopes to collect 300 before taking the petition to the D.C. City Council later this week. There, he’ll explain the issue to councilmembers and hope that it doesn’t meet any opposition. Fries, who drafted the petition and created a draft bill, was not available to speak when contacted by City Paper. Bettman is confident that it will pass—-but in a busy legislative season, as the council reviews the budget, he’s not sure how long it will take.
“I’m quite certain that this is so far within the bounds of normal commercial practice that no one would fight another side,” said Bettmann. “As far as I can tell, this is a no-lose for anybody.”
He hopes that the election season won’t delay his legislation, especially if a gallery were to go bankrupt before November.
“In this season, it’s most likely to be delayed because no one wants anyone to have any big win,” he said. “We don’t see this as being political … I’m an artist. But if this is in some way political in some way I’m not understanding, I will know that because in a month nothing will have happened.”