American Capital eyes art of the deal

Private equity firm American Capital has agreed to provide $21m to bankrupt New York art gallery Berry-Hill, a loan secured by the gallery’s art inventory and real-estate assets.

Berry-Hill Galleries, a fine-art gallery whose collection includes works by such luminaries as Winslow Homer, Jackson Pollock, John Singer Sargent and Willem de Kooning, has secured a $21 million (€16.4 million) loan from Bethesda, Maryland-based private equity firm American Capital, using its art and Manhattan real-estate holdings as collateral.

Berry-Hill has been based in New York since the 1930s. It declared Chapter 11 bankruptcy in December 2005, largely to help resolve a lawsuit filed the previous August by ACG Credit, a division of New York-based Art Capital Group that specializes in lending money against art assets. ACG alleged that Berry-Hill had attempted to default on its loan of approximately $20 million. The largest creditor named in the bankruptcy filing, according to reports, was the famed Christie’s auction house, with a claim of more than $14 million.

Publicly traded American Capital has invested about $4.7 billion in the last year, with total capital resources of about $8.4 billion. Its portfolio companies include Los Angeles-based beef processor United Food Group and the Pan Am International Flight Academy.