U.S. Lawyer Warns That COVID-19 Might Cause a Bankruptcy Wave in the Art World
Nick O'Donnell was quoted in the article, "U.S. Lawyer Warns That COVID-19 Might Cause a Bankruptcy Wave in the Art World," which was published in The Value on March 31, 2020.
The article summarizes and draws directly from Nick's most recent blog posts detailing the anticipated lasting effects of the COVID-19 crisis on the art world. Nick warns that the art world may face a wave of bankruptcies in the upcoming months to years. His piece mentions Paddle8’s recent bankruptcy, using it as an example to provide legal advice for artists, galleries and auction houses.
Nick suggests that those who have consigned art to a dealer or gallery should first account for any works of art that are not in their possession by getting U.C.C.-1 statements on file so that they can retrieve their works when bankruptcy happens. For galleries and auction houses, they should get their records in order to avoid having to explain why funds or consigned works (particularly in New York) were not maintained separately. Overall, he fears that a Paper Chase situation will come about in the art world.