A Sydney art gallery that helped art investors rent out their artworks to earn extra income has been placed into administration with debts of more than $1 million.
Smith & Hall, run by director Cameron Hall, was placed in the hands of Sydney insolvency firm Jirsch Sutherland on October 7.
The company, based in the Sydney suburb of Redfern, offered art investors the chance to earn up to 8% per annum by leasing out their artworks to renters, who would pay “as little as the cost of a cup of coffee a day”.
The gallery represented a mix of top contemporary Australian painters, including a number of high profiled indigenous artists.
Administrator Sule Arnautovic of Jirsch Sutherland was unavailable for comment prior to publication, his preliminary report to creditors indicates he has frozen the company’s bank accounts, although the group does not have any cash.
Arnautovic also says the gallery’s last employees were dismissed two weeks ago, and he is still attempting to ascertain the size of employee entitlements still outstanding.
Of course, of more interest to the gallery’s creditors and investors will be what happens to the artwork at the gallery, at the gallery’s storage facility and out on loan to renters.
“It appears that the companies have control over 800 items of art with a resale value of over $4 million” the report to creditors says.
“it seems at first glance that the vast majority of these artworks are not owned by the companies. We are aiming to have all artworks not owned by the companies returned to their owners as soon as possible.”
Arnautovicalso told the Australian Financial Review there are around 500 investors and supply creditors owed money by Smith & Hall.
While debts to these creditors are believed to be between $500,000 and $1 million, Arnautovic told the AFR there is $400,000 owed to a bank and up to $500,000 owed to the Australian Taxation Office.
The business does not appear to be trading – attempts to reach director Cameron Hall via the gallery’s telephone number were transferred straight through to a representative of Jirsch Sutherland.
The first meeting of creditors will be held in Sydney on October 19.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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