Memorandum Decision re Order Denying Auctioneer Charge of Buyer Premium

Original Filed									
April 15, 1999

 


 


UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA



In re
No. 98-35318-WDM
Chapter 7
JERRY WANG VAN METER,
Debtor.
______________________/



ORDER DENYING AUCTIONEER’S CHARGE OF BUYER’S PREMIUM

The court has considered the Trustee's Ex Parte Application For Order Permitting Charge Of
Buyer's Premium. In that application the Trustee seeks relief from this court's February 12, 1999
Order that authorized him to employ Butterfield & Butterfield as an auctioneer, but prohibited
Butterfield & Butterfield from charging a buyer's premium at the auction.

Butterfield & Butterfield states, through its general counsel, that it does not negotiate its buyer's
premium. That notwithstanding, the Trustee has not indicated why he is unable to obtain another
auctioneer who will not charge a buyer's premium; alternatively there is no showing why
Butterfield & Butterfield will not adjust downward its charge to the Trustee as seller by the
amount of the buyer's premium. If it were to do so, none of the difficulties described by
Butterfield & Butterfield's counsel would be encountered and the estate would realize the
economic equivalent of a sale at auction without a buyer's premium.

It has long been the practice of this court to prohibit auctioneers hired by trustees from charging
buyer's premiums, and both the Trustee and Butterfield & Butterfield have previously been made
aware of that practice. Unless and until the Trustee demonstrates that it is impossible to sell
property at auction without a buyer's premium, and that no qualified auctioneer will adjust its
basic charges by the economic equivalent thereof, the court does not intend to change its
practices.

In passing the court notes that in recent times auction sales via the Internet, including sales of
artwork, have become quite common. To the court's knowledge, buyer's premiums are not
charged on Internet auction sales. The Trustee (and all panel trustees in this division) should
consider this as an alternative method of selling assets of estates they administer.

Dated: April __, 1999
______________________________
Dennis Montali
United States Bankruptcy Judge


NOTE: File also available in pdf format:

meterOrderdm.pdf