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Fallen Tycoon to Auction Prized Works

Lehman's Fuld and Wife Consign Millions in Postwar Art to Christie's for November Sale (Subscriptino required)

'Study for Agony I" is a jewel-toned drawing made by modern master Arshile Gorky in 1946.

It could also evoke the plight of its owners, Richard Fuld Jr. -- chairman and chief executive of Lehman Brothers Holdings Inc., the bankrupt holding company -- and his wife, Kathy, a well-known collector of modern art.

The Gorky drawing is part of a group of 16 postwar drawings owned by the Fulds that were quietly put up for sale by Christie's last month, according to people familiar with the situation. The sketches were consigned in early August following a competitive bidding process between Christie's and Sotheby's. Christie's wouldn't confirm the identity of the seller but says the total presale estimate of the works is between $15 million and $20 million. The auction house also confirmed the deal included a guarantee, an undisclosed sum promised to the seller whether or not the works sell.

The drawings will be shopped to potential bidders in Moscow and London before being offered Nov. 12 during the fall auctions in New York.

The sale represents a departure for Ms. Fuld, a longtime collector and Museum of Modern Art trustee who has been buying drawings at auction for years but isn't known as a major seller. Art experts say she has a well-trained eye for the undervalued masterwork. In November 2001, Christie's sold a Willem de Kooning drawing for $2 million; she's offering the same work now for $4 million.

The Fulds didn't respond to requests for comment.

Mr. Fuld's net worth has suffered as Lehman's stock price plunged. He'd long encouraged his employees to share in the ownership of the 158-year-old firm, which before its downfall was approximately 25% owned by employees. That included Mr. Fuld himself; in February 2007, when Lehman shares peaked at $86.18, his stake was worth $993.5 million, according to InsiderScore.com. The shares now trade for about 33 cents.

Over the years, Mr. Fuld has sold some of his holdings. Between September 2003 through June 2007 -- around the beginning of the credit crisis -- he pocketed $139.3 million from stock sales, according to InsiderScore.com. Then his sales stopped, only to resume during the past week, after the company's bankruptcy filing, when he sold more than three million shares for an average price of 21 cents apiece, or about $640,000.

These days Mr. Fuld still works every day from his corner office on the 31st floor of Lehman's midtown Manhattan headquarters.

Mr. Fuld and his wife still have a sizable art collection and a primary residence in Greenwich, Conn., featuring an indoor squash court. They also own a $21 million Park Avenue co-op, a home in Vermont and another one in Sun Valley, Idaho. In addition, Mr. Fuld in 2004 paid $13.75 million for an oceanfront house in Jupiter Island, Fla. He has since rebuilt the home.

Mr. Fuld isn't the only Lehman executive out selling assets. Former Lehman President Joe Gregory has his $32.5 million home in New York's Hamptons area up for sale and recently had his home in Manchester, Vt., up for sale. That listing has been withdrawn.

Mr. Gregory also has sold the helicopter that he used to commute to work from his home in Huntington, N.Y., according to a person familiar with the matter. Rumors that Mr. Gregory is in serious financial trouble have dogged him for weeks, but a person familiar with the situation says his finances are fine.

The drawings are mostly abstract and minimalist examples from the midcentury New York School of artists, Christie's says. The priciest work in the group is Willem de Kooning's 1951 drawing of a nude woman, "Woman," a vigorous blue and peach sketch which is estimated to sell for up to $4 million. Other works include Agnes Martin's royal-blue gridlike drawing "Starlight," priced to sell for up to $700,000; and an untitled 1960 abstract from Barnett Newman's signature "zip" series, estimated to sell for up to $2 million.

Today's art market is dominated by newly wealthy buyers from Europe and Asia who prefer to chase trophy paintings. Ms. Fuld has instead taken her place among a small but close-knit group of American drawings collectors who seek out artists' more subtle renderings and sketches. A MoMA spokeswoman says Ms. Fuld has donated or helped acquire 42 artworks, including 25 drawings, for the museum's collection.

Beverly Schreiber Jacoby, a New York art consultant who once ran Christie's Old Master drawings department, says the works consigned by Ms. Fuld are by and large "iconic examples" of the artists' best-known series and haven't been given overly inflated price estimates, which may better their chances of finding buyers. On the other hand, American collectors have typically been the biggest buyers of American drawings, and their purchasing power has eroded in the past year because of the weak dollar and economic woes.

-- Randall Smith contributed to this article.

Write to Susanne Craig at susanne.craig@wsj.com and Kelly Crow at kelly.crow@wsj.com


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