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,
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