Portugal blocks Berardo art sale

 In Entrepreneur, News

The Portuguese Government has blocked the shipment to the United Kingdom and eventual sale of 16 works of art belonging to art collector Joe Berardo in a bid to pay off his bank creditors.

The collection is part of the goods that several banks in the Portuguese banking sector want sold to pay a €980 million debt from unpaid loans. They claim the works were put up as surety for the loans.
The transportation of the artworks for “future sale” in the United Kingdom was blocked last year by the Ministry of Culture which justified the decision on an accord that prohibits the sale of the artworks in question until 2022.
“While this contract is still in force, the Berardo Collection Association may not sell cultural goods” states the Ministry of Culture.
The Government has also made clear that any intention to export artworks, either temporarily (in the case of an overseas exhibition) or permanently, in the intention of a possible sale, must be applied for beforehand”
The 16 paintings which belong to the Berardo Collection must remain for a period of six years in the Berardo Collection of Contemporary & Modern Art in a contract that was automatically renewed from 1 January 2017.
The current contract signed in 2006 remains in force until 2022. Furthermore, an addendum included in 2016 “gives the State the “option of right to buy” the Berardo Collection “in its entirety” at the time the contract’s next renewal is due.
The art story has dominated the Portuguese press in recent days after the entrepreneur who is considered to be the fifth richest man in Portugal and who called female ministers “babe” and top bankers by the familiar term for you (Tu) reserved for children and very close friends and family, claimed the only patrimony in his name was a garage in Funchal and a WC.
Ten years ago Joe Berardo succeeded in borrowing from Portugal’s banks Caixa Geral de Depósitos, BCP and BES (now Novo Banco) €1Bn to buy shares in BCP and subsequently enter into a power struggle to topple BCP founder Jardim Gonçalves.
The art collector succeeded in denouncing what he called the BCP founder’s alleged “fraudulent offshore schemes” but lost the power struggle.
However, Berardo continues to owe €980 million to various banks which are now preparing to sue him in court to recover the losses.
The man who owns Pablo Picasso’s ‘Tête de Femme,’ Andy Warhol’s ‘Judy Garland’ and Joan Miró’s ‘Figure à la Bougie’ says that the only patrimony he owns is a garage in Funchal.
The mistakes the banks made when lending the millions to Joe Berardo was accepting BCP shares as collateral and spent years rescheduling a loan to Berardo, that should have already been paid within five years, to avoid the loans appearing on their bank balances as losses. When they called in the loans, the only thing Berardo had is the garage in Funchal.
Finally, the banks had accepted 40% of the Berardo Collection in the CCB and later 75% as collateral. However, a loophole prevented the banks from seizing the paintings: Berardo gave the shares of the Berardo Collection Association as guarantee rather than specific artworks, meaning legally it is not clear if the art works actually belong to the association or not.
Joe Berardo made his fortune in mining, hotels, tobacco, stock trading and speculation, animal foods, telecommunications and banking. His estimated wealth 10 years ago was estimated by the magazine Exame to be €1.9Bn of which he now owes €1Bn to various Portuguese banks.