A. Alfred Taubman, the shopping-mall magnate and onetime chairman of
Sotheby’s Holdings Inc. who was convicted of fixing prices with rival
auction house Christie’s International Plc, has died.
He was 91.
Taubman died of a heart attack late Friday at his home in in Bloomfield
Hills, Michigan, his son and Taubman Centers Inc. Chief Executive
Officer Robert S. Taubman said in a statement on the company’s website.
“This company and all that you stand for were among the greatest joys
of his life,” Robert Taubman said. “He was so proud of what this
wonderful company he founded 65 years ago has accomplished.”
Starting with small stores and strip centers, Taubman pioneered the
development of regional malls. His Taubman Co. built and operated more
than 25 U.S. malls, including the Mall at Short Hills in New Jersey and
the Beverly Center in Los Angeles. The malls generate among the highest
sales per square foot -- an average of $809 in 2014, according to the
company.
Taubman Centers, a real estate investment trust, began
trading on the New York Stock Exchange in 1992. An Asia unit, based in
Hong Kong, was formed in 2005.
Forbes Magazine ranked Taubman No.
577 on its 2015 list of the world’s billionaires, with an estimated net
worth of $3.1 billion.
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| A. Alfred Taubman's Palm Beach House |
The self-made billionaire entered the
old-money auction world in 1983 by purchasing Sotheby’s. Some observers
suspected he bought Britain’s oldest auction house in revenge for snubs
directed at him and his wife, Judy, a former Israeli beauty queen more
than 20 years his junior. The Sotheby’s purchase made them the toast of
New York, London and Palm Beach society.
Taubman transformed
Sotheby’s “from an elitist club into an emporium for the new-money
masses, bringing buzz to the auctioning of rugs, paintings and jewelry,”
Shawn Tully wrote in a 2000 article in Fortune magazine. He packed its
board with friends, British aristocrats with little management
experience and aggressive entrepreneurs.
He promoted customer
service and brought in Diana “Dede” Brooks, a former Citibank Inc.
lending officer who had no art or auction experience, to run day-to-day
operations. She made Sotheby’s, long known for understated elegance, a
sales center for celebrity memorabilia and items such as Walt Disney
cartoon celluloids. She added financing and insurance offerings, and
Sotheby’s became the first international auction house to offer bidding
on the Internet.
The U.S. Justice Department began investigating
Sotheby’s and Christie’s in 1997, when the two firms together controlled
more than 90 percent of the world’s $5 billion auction market. Brooks
pleaded guilty to antitrust conspiracy and testified against Taubman,
blaming him for devising the price-fixing deal. She was sentenced to
house arrest.
Taubman argued that Brooks headed up the
commission-rigging plan, which kept sellers from getting reduced
commission fees. In the past, potential customers had played one auction
house against another for the best deal; under the plan, each company
offered identical rates.
In 2001, a jury in Manhattan federal court
found Taubman guilty of collaborating with Christie’s to fix fees,
violating antitrust laws and cheating customers out of roughly $100
million. He resigned as chairman of Sotheby’s and of Bloomfield Hills,
Michigan-based Taubman Centers.
Even with letters from more than 90
notable people, including former Secretary of State Henry Kissinger and
former President Gerald Ford, Taubman was sentenced to a year and day in
a low-security federal medical prison in Minnesota and fined $7.5
million. He was released two months early in May 2003, and spent a month
in a Detroit halfway house.
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| A. Alfred Taubman's Southampton House |
Sotheby’s and Christie’s agreed to pay
$512 million to settle a class-action lawsuit brought by 130,000 U.S.
buyers and sellers. Taubman paid $156 million of Sotheby’s $256 million
share, plus another $30 million to settle a shareholder lawsuit. The
president of Christie’s, Sir Anthony Tennant, escaped prosecution
because the U.K. wouldn’t extradite him, and price-fixing isn’t illegal
in Britain.
Sotheby’s was forced to sell its New York headquarters
and fire staff following the settlement. Surging art sales later pushed
Sotheby’s past Christie’s as the world’s largest auction house.
Taubman always maintained he broke no laws and took an unfair fall.
“I had served time for others, people going about their lives in New
York and London who had initiated, executed and lied about a serious
crime for which they would receive little or no punishment,” he wrote in
a 2007 memoir.
Adolph Alfred Taubman was born on Jan. 31, 1924, in
Pontiac, Michigan, to Jewish German immigrants Phillip and Fannie Esther
Taubman. He went to work aged 9, during the Great Depression, after his
father’s construction business went bankrupt. At 12, Taubman sold shoes
after school.
He was an Army Air Corps mapmaker during World War II
-- a near-fatal accident during flight training persuaded him to give
up on being a pilot -- then attended the University of Michigan from
1945 to 1948.
In 1950, he founded Taubman Co. with a $5,000 loan
from Manufacturers National Bank of Detroit and, as he put it in his
memoir, a “big dream of designing and building extraordinary retail
properties.” He titled the book “Threshold Resistance,” which he defined
as “the force that keeps your customer from opening your door and
coming in over the threshold.”
Taubman bought the A&W
Restaurants chain, which had evolved from the A&W Root Beer Co., in
1982. The franchises steadily increased in the U.S. and overseas;
Taubman sold his stake in the company to Sidney Feltenstein, a former
Dunkin’ Donuts executive, in 1995.
Taubman bought Sotheby’s in 1983
for $37 million when the auction house, founded by Samuel Baker in
London in 1774, was in danger of financial collapse. He took the company
public in 1988, establishing a special class of B shares that ensured
his family’s control of the board.
After Taubman’s 2001 conviction,
his son Robert became chairman of Taubman Centers. Another son, William,
continued as executive vice president.
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| Robert Taubman's House in Bloomfield
Hills, Michigan (Son of Alfred Taubman) |
Simon Property Group Inc.,
the largest U.S. shopping mall owner, tried to buy Taubman Centers for
$4.25 billion, or $20 a share, in 2003. The Taubman family resisted the
buyout.
Taubman donated more than $100 million to medical research,
Detroit-area charities and arts and educational institutions. He gave
more than $35 million to the University of Michigan, endowing the A.
Alfred Taubman College of Architecture and Urban Planning and various
medical facilities. In 2008, he pledged $22 million to the University of
Michigan to support the study of stem cells.
The Taubman Center for
State and Local Government at Harvard University and Brown University’s
public policy and American institutions program are both named for him.
Taubman and his first wife, Reva, divorced in 1977 after a 29-year
marriage. They had a daughter, Gayle, in addition to their two sons.
Taubman’s second marriage was to the former Judith Rounick.
Below we have shown you the different homes owned by Alfred Taubman at the time of his death.
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| A. Alfred Taubman's House in Bloomfield
Hills, Michigan (The home he died in on Friday) |
We send our condolences to the entire family. The BillionaireMailingList.com Team
