My WSJ Article, and More on Auction-House Coupons

In case you like your news on paper instead of online, my Tricks of the Auction Trade is on page D5 of today’s Wall Street Journal.
It’s accompanied by a clever but potentially misleading illustration (above), showing the successful buyer of tonight’s Rothko trying to pay for it with the coupons that were issued as part of the $512-million auction-house antitrust settlement. The total face value of coupons issued was $125 million, some $92 million of which is still outstanding.
As I mentioned in my article, the coupons can be redeemed for cash for one year, starting today. After that, they’re worthless.
Determined Rothko bidder, whoever you are, please don’t try the above method of payment tonight at Sotheby’s.
The coupons can still, for one more year, be used to defray sellers’ costs, but they can’t (and never could be) profferred by successful bidders. To get cash, you have to go through the procedure detailed here, and mail the coupons to the certificate administrator: Auction Houses Certificates, c/o Computershare, P.O. Box 8907, Edison, NJ 08818-8907. Computershare can also issue new certificates to claimants who have lost the old ones. The automated help line is: 877-498-8863
Among the cash claimants will be Philip Korologos, one of the partners in law firm of David Boies, the lead counsel who successfully argued for the class-action award. Some 20 per cent of the the lawyers’ $26.5-million fee consisted of coupons. Korologos told me he had waited for the cash, rather than selling his stash earlier, on the open market (for less than face value), because he thought that was more financially advantageous.
But James Tharin, CEO of Chicago Clearing Corporation, which has served as market maker for buying and selling the coupons, suggested another play would have been more remunerative:
We were telling people to sell the certificates and buy the [Sotheby’s] stock.
Speaking of that stock, there’s been a correction in the past week: from $52.40 on May 8 to $48.39 at yesterday’s close.