Tuesday, June 5, 2012
John Draneas does his usual excellent job looking at the legal complexities of the case of the disputed ownership of a 1935 Mercedes-Benz 500K Roadster.
But as a guy who has sidelined in auction catalogue write-ups for a major house from time to time, I have to disagree that "RM, like all major auction companies, puts great effort into researching the cars in their auctions." I'd say it's more like the minimum that will suffice. Who can forget the Auto Union that took down Christie's whole department? It became clear after the fact that it would not have taken much research at all to establish the car's bona fides--or lack thereof.
In fact, when he asks "what if the auction company knew about this claim ahead of the auction? That would make things quite different," I think that's the whole reason right there. I feel that for a variety of reasons, auction companies don't want to hear bad news, not only to protect themselves from that potential exposure; but also because they want to keep those big consignments rolling in. "You wouldn't believe how hard it is to get good consignments today," an action house president told me recently. There are now at least 200 old car auctions in the US and Europe annually and some--like Mecum--require a whole heck of a lot of cars to feed the beast. Your reputation with the consignor is at least as important as your reputation with bidders, and if you do too much digging, you run the risk of scaring them away. In this business, every single consignor is gold.