How Christie’s Nabbed Liz’s Loot

In the late summer of 1987, actor George Hamilton swung open the door of Elizabeth Taylor’s suite at the Plaza Athenee Hotel in New York to greet two guests. The actress made an entrance down the stairs and offered a buffet supper and Champagne to John Block, then the director of jewelry at Sotheby’s auction house, and his wife, Hilary. Taylor was taking delivery of a diamond brooch she had purchased from the $53 million sale that spring of the Duchess of Windsor’s jewels, one of the few pieces of jewelry the actress ever bought for herself. “She had such taste,” Taylor remarked of her friend, the Duchess. She added: “The only collection that’s going to compete with hers is mine.”

Christie’s auction house will sell the jewels, clothes and art of Elizabeth Taylor in auctions late this year or next, with some of the proceeds likely going to benefit the American Foundation for AIDS Research, which she co-founded in 1985. But the deal has been in the works for nearly a decade, and Taylor’s estate planning overall has been marked by savvy, sophisticated strategies designed to make a glittering, history-making spectacle that will bring a tremendous windfall to her heirs and favored charities.

From preemptively establishing clear title in court to an eight-figure Vincent van Gogh, to structuring her will in a manner that keeps it out of the public record, and cutting an elaborate financial and marketing deal with Christie’s years before her death, people close to these matters said, Ms. Taylor was planning ahead.

Most notably, in the fall of 2006, in an arrangement that resembled a reverse mortgage in extremis, the star–who in her later years asked that Christie’s employees call her “Dame Taylor”–contracted with the auction house to sell her property there after her death in exchange for a private multimillion-dollar line of credit, people close to the matter said. Insiders declined to comment on the extent of the financing, but it was likely in excess of $10 million.

Did the legendary, eight-times-married Academy Award winner really need the cash? While there are published rumors that Ms. Taylor’s estate may be valued at up to $1 billion–“Tabloid reports of the potential value are, as ever, wildly exaggerated,” according to a spokeswoman for the actress–at that time, at least, she may have needed it. Her publicly traded House of Taylor jewelry company (ticker symbol: HOT) was facing difficulties. It was de-listed by Nasdaq and in 2008 filed for Chapter 7 bankruptcy protection.

Christie’s, meanwhile, had had a long history with Ms. Taylor. Along with fifth/sixth husband Richard Burton, buying on her behalf, Taylor was a client of both Sotheby’s and Christie’s, and both companies had hosted galas to benefit amfAR, in part to curry favor with the acting legend. But in 1999, Christie’s had a significant success that paved the way for future business dealings. It auctioned the lush blue gown she wore to the 1969 Academy Awards for $150,000, at that time the second-highest price ever paid for a dress at auction. According to Christie’s, proceeds from the sale of it and 55 other dresses worn by other stars to the Academy Awards generated about $787,000 for amfAR. Later, Christie’s would go on to aid Ms. Taylor in the publication of her 2003 limited-edition book, My Love Affair With Jewelry.

The notable jewels in the Taylor collection, according to a Christie’s 2006 statement, include the 33-carat Krupp diamond ring, the LaPeregrina pearl (a Valentine present from Burton), an antique diamond tiara (a gift from her third husband, the producer Mike Todd), a Taj Mahal heart-shaped yellow diamond necklace (a gift from Burton), that Duchess of Windsor diamond brooch, a 29-carat diamond ring (a gift from Todd), the pear-shaped 69-carat Taylor-Burton diamond and the spectacular Grand Duchess of Russia emeralds, said to be among her favorites.

The jewelry collection was appraised about 15 years ago, according to people close to the matter, at $30 million to $40 million, but is more valuable now, especially in the context of a blockbuster Greta Garbo- or Jacqueline Kennedy Onassis-style marketing campaign. Christie’s likely take of the Taylor trove is undisclosed. Normally, an auction house nets, after expenses, about 14 percent to 20 percent from a sale’s proceeds, with commissions coming from both buyers and sellers. In the April 1996 “Jackie O” sale at Sotheby’s, however, the auction house was guaranteed a higher percentage if the sale went above certain target levels, which it did–in other words, it was rewarded for its ability to hype the merchandise and generate bidding fever.

As for the disposition of the estate, who will get what? Taylor structured her will as a “revocable living trust”–which is generally a private contract between the decedent and trustees (who include, in this case, her son with second husband Michael Wilding, Christopher E. Wilding). Unless her heirs dispute the division of the estate and file a lawsuit questioning the validity of the trust, it will likely remain private.

In an email, Taylor’s attorney, Paul Gordon Hoffman, wrote that as the actress “wished to keep her personal and financial situation private, I cannot confirm or deny” any matters not in the public record.

But Taylor’s estate planning literally seemed to go as far as the Supreme Court. An effort by heirs of a Jewish art collector to recover her 1889 van Gogh landscape went all the way to the highest court in 2007. Taylor’s father, an art dealer, bought the painting, Vue de l’Asile et de la Chapelle de Saint-Rémy, for her in 1963. She offered it at auction decades later, but, with a high reserve and under a cloud as to its legal title, it failed to sell. Relatives of the original owner had claimed it, saying it had been sold only under duress. But the district court dismissed their suit as untimely. And the high court opted not to hear the appeal.

Though Christie’s declined to comment on any specifics of the Taylor auctions, the house is likely to offer that van Gogh along with other somewhat less notable Impressionist and post-Impressionist works from her collection. (Articles on Taylor over the years refer to works by Renoir and Degas, some displayed on the boat she owned with Burton.) As for the prospects for that van Gogh, a person close to the initial, unsuccessful sale of it said Taylor once reported she had had a dream that the painting of a chapel and asylum would fetch $27 million.

Sounds like as good an estimate as any.


  How Christie’s Nabbed Liz’s Loot