Update 30/07/21...Warning..those of a weak disposition look away now..
The sale of the Italian Books has now concluded for the sum of £180,000. Our agents who arranged the sale are confident that they obtained the best price after months of enquiries with multiple specialist agencies, as detailed below.
The Joint Administrators are acutely aware of the discrepancy between what the value of these books were stated as on the FundingSecure Limited (FundingSecure) Platform and their ultimate selling price and the concern that Investors may have in this regard.
Investor’s should note that the valuations relied upon by FundingSecure when the loan was initially offered to Investors were not addressed to FundingSecure. The valuations also do not specify which books were inspected in preparing the valuations and whether the same titles as were provided for valuations were then subsequently pledged by the Borrower. It is further noted that the valuation which values the books at £5,000,000 states that it is to be used “for Insurance and replacement purposes only…”. It should be noted that one of the experts who reviewed the books has commented that “it would be extremely difficult, expensive and time-consuming – perhaps even impossible – to replace many if not all of the books in the case of a disaster such as flood or fire. Hence the enormous figure” He went on to say, that being said, replacement values usually have some sort of relationship to a realistic auction estimate and gave the example of replacement values being at double, perhaps treble, mid-estimate auction values.
Upon appointment, the position around the Italian Books was reviewed on behalf of the Joint Administrators. The provenance of the Italian Books was researched in preparation for auction and in doing so it was discovered that the Italian Books had been moved from Italy (in November 2016) without an export licence, as such it was not possible to enter the Italian Books into auction. In coming to this conclusion, the Joint Administrator’s agents had contacted a variety of antiquarian book dealers in this country and on the Continent who all shared the same view, that without the relevant paperwork it was not possible to sell the books. This conclusion not only made auction impossible, but made the open marketing of the books extremely difficult.
Rupert Powell, of Forum Auctions (a specialist auction house for Antiquarian Books) inspected the library shortly after the Joint Administrators’ appointment and subsequently advised that he could not see it making much more than about £100,000 at auction. He highlighted a number of shortcomings in the library including the fact that many of the books appeared to be odd volumes or incomplete sets and that the physical condition was very much mixed. Further the majority of the books were on, what he politely termed, “dull” subjects, namely religion and history with very few books on the “better” subjects such as science, travel, philosophy, literature and natural history and that there were very few books for the 16th and 17th centuries, with most of the books being from the 18th and 19th centuries. Mr Powell also suggested that the collection had already been “plundered” and that the items of real value had been retained and not provided as part of the pledge. Mr Powell also expressed great concern over the lack of paperwork and export licence.
In order to try and procure a sale, the Joint Administrator’s agents called upon a variety of investors known to them and also via specialised agencies to see whether they could secure a sale.
Within the period of Administration, the agents for the Joint Administrators have liaised with the following specialised agencies in order to value the Italian Books and to secure a sale:
Antiquariaat FORUM (Holland)
Antiquariaat FORUM was founded in Utrecht in 1970 by Sebastiaan Hesselink, now an internationally recognized expert in the world of rare and antiquarian books, manuscripts & prints. They tried a number of well-known antiquarian book dealers but the lack of paperwork created issues.
- Bado E Mart (Italy)
The Antiques Library Bado e Mart is a company with expertise in Italian Books. It was founded in 1978 and is active in the marketing of Italian books, prints, drawings and manuscripts from the xv to the nineteenth century. Bado e Mart are also valuers and experts in Italian art’s provenance and authenticity.
- Forum Auctions
Forum Auctions is the specialist auction house for Antiquarian Books and Manuscripts, 20th Century Literature, Modern & Contemporary Art and Editions, Old Master Prints and Drawings, Photographs and other Works on Paper. Forum Auctions has been established to address the needs of international collectors in all Works on Paper categories and further benefits from premises in New York and Italy.
- Bonhams Auction
Bonhams is one of the world's largest and most renowned auctioneers of fine art and antiques, motor cars and jewellery.
- Sotherans
Founded in York in 1761, established in London in 1815, Henry Sotheran Limited has a long and distinguished history. For over 250 years they have been offering unsurpassed opportunities to collectors and enthusiasts, from the purchase of the libraries of Laurence Sterne in 1768, and Charles Dickens in 1870; the complete stock and copyright of the ornithologist and publisher John Gould; to the successful bid in 1980 for the final draft manuscript of Gilbert White's Natural History of Selbourne, bought on behalf of the Gilbert White Museum. The great American collector of Shakespeare, H.C. Folger, acquired much of his collection, including the Halliwell-Phillipps library, through Sotheran's, and Sotherans were agents in the purchase of the world-famous Althorp Library from Earl Spencer for the John Rylands Library in 1892.
- Peter Harrington London
Since its establishment, Peter Harrington has specialised in sourcing, selling and buying the finest quality original first editions, signed, rare and antiquarian books, fine bindings and library sets. Peter Harrington first began selling rare books from the Chelsea Antiques Market on London’s King’s Road.
- Cheltenham Rare Books
- Abbey Antiquarian Books
As the Investors are aware, the Borrower subsequently became bankrupt and the Joint Administrators liaised with the Borrower’s Trustee in Bankruptcy (Trustee) regarding the sale of the books. The Trustee had also believed the Italian Books to be worth millions of pounds. They too had been provided with a previous valuation (in video format) confirming the same. Bonhams, on the joint instruction of the Joint Administrators and the Trustee inspected the books and discovered that many of the higher value books (which had been inspected for the purpose of the valuation that they had been provided with) were not present and that further, these books did not appear listed within the books catalogued on the pledge to Fundingsecure. Further investigation in respect of this identified that the video review of the books was actually a review of two collections put together for marketing purposes by Fundingsecure in November/December 2016 in order to try and make the books more attractive to a wider audience. No offers were made for this collaborated collection and accordingly the collections were separated again in December 2016.
Bonhams accordingly valued the library held by FundingSecure at approximately £100,000+.
The Joint Administrator’s agents, in conjunction with each of the above agencies accordingly therefore valued the books at £100,000-200,000.
In March/April 2021, two parties came forward with interest in the books. Bado E Mart had suggested they may have been interested for a purchase price of €200,000 (c£176,000) subject to certain conditions and a third party made an offer to purchase the Italian Books in the sum of £180,000. The offer of £180,000 was made despite the fact that there was no paperwork and despite the fact that the purchaser carries the risk of having to surrender the Italian Books to the Italian authorities in due course.
Given the ongoing monthly storage charges for the Italian Books were £2,500 plus VAT and given that this offer was in line with the specialised indication of value obtained, the offer of £180,000.00 was recommended for acceptance and the sale has now concluded. Historical storage fees which had been paid by FundingSecure direct prior to Administration
The Italian Books were lent under a pledge which does not allow for any shortfall to be recovered from the Borrower. Notwithstanding this, given the Borrower is bankrupt and does not have any assets, there will be no further recovery available against the Borrower in respect of the Italian Books. In addition to the capital shortfall suffered in this matter, it is noted that the Borrower never paid any interest to renew these loans and that Interest which has been paid to Investors in the Italian Books historically, totalling almost £1.8m was paid from FundingSecure’s own funds pre Administration and given the Borrower’s bankruptcy there is no prospect of the recovery of these sums either.
The Joint Administrators are aware that this will be disappointing for the Investors, however there were limited options for alternative sales where the Italian Books were ineligible for auction and where the true value was regrettably significantly less than that presented to Investors.
The final figures will be finalised, and investors will be updated in due course.