Paddle8 Is Filing for Bankruptcy—and It Owes Tens of Thousands of Dollars to Justin Bieber, Jay Z’s Foundation, and Others

The online auction house Paddle8 has filed for Chapter 11
bankruptcy protection in New York just one week after a
nonprofit founded by the late filmmaker Jonas Mekas filed a lawsuit
against the company for allegedly misappropriating funds from a
charity auction.

On March 10, Artnet News reported that the nonprofit
New American Cinema Group had filed a lawsuit against Paddle8,
alleging that the auction house was withholding funds from a
benefit sale it hosted back in November.

In a statement provided to Artnet News last week, Paddle8 said
it expected “to resolve all of these situations quickly and
amicably.”

But the bankruptcy proceedings have thrown a wrench into the
process.

“We are deeply concerned by Paddle8’s bankruptcy filing,
particularly given that the director of Paddle8’s board, Peter
Rich, specifically acknowledged Paddle8’s payment obligations to
the nonprofit charity in writing less than a week ago, and assured
us that Paddle8 had ‘made arrangements to settle your client’s
monies due immediately,” Paul Cossu, an attorney for the New
American Cinema Group, tells Artnet News.

“It now appears that this was nothing but a bad-faith stalling
tactic to buy Paddle8 time to wire money that should be going to
charities to its lawyers.”

In the email from Rich, which Cossu shared with Artnet
News, Rich says that “after the sudden departure of the
company president and other personnel turnover we have been
challenged with our very important responsibilities.”

Rich adds: “We apologize for any inconviences [sic] your client
may have suffered.”

Paddle8 declined to comment on the bankruptcy filing.

The November sale on behalf of the New American Cinema
Group included works donated by artists such as John Ahearn, Kiki
Smith, Tom Otterness, Jim Jarmusch, and Walter Robinson.

According to the complaint, collectors had also started calling
the nonprofit to inquire about the whereabouts of works they
purchased at the auction. Since then, the New American Cinema Group
has released many of the works, even though it says it is still
awaiting payment from Paddle8.

Among the creditors listed in Paddle8’s bankruptcy petition
are pop star Justin Bieber and his wife Haley, who recently
curated the recent “The
Biebers x LIFT LA x Inner City Arts” auction. Paddle8 says it
owes just over $73,000 to the couple.

Jay Z’s Shawn Carter
Foundation is also listed as a creditor, and is owed just
over $65,000, presumably for a charity auction held last
November.

The Rema Hort Mann Foundation, the
nonprofit founded by top New York City-based collectors Susan and
Michael Hort in 1995 to honor their late daughter, also appears to
be owed just over $100,000. The Hort Foundation did not immediately
respond to a request for comment.

The post Paddle8 Is Filing for Bankruptcy—and It Owes Tens
of Thousands of Dollars to Justin Bieber, Jay Z’s Foundation, and
Others appeared first on artnet News.