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March 23, 2018

Near Meltdown for $33M Fabergé Egg

What a difference a few minutes of research can make.

If you haven’t heard by now, collectors around the globe are talking about the discovery of the third Imperial Russian Fabergé egg, identified last week by Kieran McCarthy of London’s Wartski jewelers. The Fabergé community is extremely excited about the find, as the egg has been missing for more than 80 years.

I’m intrigued by the discovery as well, but for a different reason than most: I wonder why it took so long to identify it.

The egg sat on a kitchen shelf in a Midwestern U.S. home for more than 10 years. The egg’s owner was a scrap metal dealer who had purchased it at a flea market in 2002. He bought the egg in order to have it melted down for the value of the gold it contained. Dealing in scrap gold has become a popular pastime in post-recession America. Drive through any city and one can see signs nailed to telephone poles: “We buy scrap gold! Highest prices paid!” Even cable TV’s National Geographic channel has jumped on the bandwagon, with its series titled “Meltdown,” which was introduced last summer. The series tells tales of urban treasure hunters who “search for precious metals in unlikely places hoping to turn junk into gold.” According to National Geographic, revenues in the scrap gold business approach $1 billion annually.

But the scrap dealer had miscalculated; he overpaid for the egg, he was told. He plopped down $13,000 for it, and everyone he spoke to told him that it wasn’t worth that much. He refused to sell the item at a loss. Instead, he displayed the egg on a kitchen shelf until he decided what to do with it.

For 10 years, whenever the Midwestern scrap dealer (he has not been identified) looked at the egg sitting on his kitchen shelf, all he saw was scrap gold. His tunnel vision prevented him from researching the item he possessed. Was he intrigued by the Cabochon blue sapphires and rose diamonds that encrusted the tripod base, or the lions-paw feet wrapped in gold garlands that supported the tripod? Did he have a hint of curiosity about the Vacheron Constantin watch within the egg, supported by gold hands decorated with sapphires and rose-cut diamonds? Apparently not.

I imagine that eventually the egg became a sore spot for the scrap dealer. He had invested $13,000 in it, and he was in need of money. After 10 years, I suppose some money seemed better than no money, so he determined to sell it. First, he decided, some research was in order. He removed the egg from the shelf and opened it. The inscription on the watch read “Vacheron Constantin,” so he turned to his computer and Googled “Vacheron Constantin egg.”

What happened next is well documented in the past weeks’ media reports: The scrap dealer contacted Wartskis, Mr. McCarthy identified the egg, and a sale was brokered. The sale price is undisclosed, but estimates put the value at $33 million in U.S. dollars.

I shudder to think how close the egg came to being melted down. There were only 50 of these eggs ever made, all for the Russian Imperial family. This particular egg was given by Alexander III to his wife, Empress Maria Feodorovna, at Easter in 1887. The egg was last seen in public in March 1902 at an exhibition in St Petersburg. During the Bolshevik Revolution (1917), all of the Czar’s properties were confiscated, inventoried, and stored. A 1922 inventory lists the Vacheron Constantin egg but that’s the last official government record of it. All original Fabergé eggs were inscribed with identification numbers, and the official government record notes the number.

In 1922, Joseph Stalin sought to liquidate the Imperial collections for his “treasures to tractors” program, selling the inventoried art and collectibles to wealthy Westerners. It is not known who bought the Constantin egg, but its next appearance was on March 7, 1964, when Parke-Bernet Gallery of New York (a division of Sotheby’s) auctioned it for $2,450. At the time, it was not identified as the Vacheron Constantin egg; instead, the catalog description noted that it was a “Gold Watch in Egg-Form Case.” Auction buyers remain anonymous, so the buyer was identified only as a “female buyer from the Deep South.”

After a few minutes of searching, the owner of the egg found an article in The Telegraph (UK) titled “Is this £20 million nest-egg on your mantelpiece?” The article was accompanied by an old black-and-white photo of the egg that was sitting in front of him.

The “female buyer” died in the early 2000s, and her estate was liquidated. Shortly thereafter, the egg was found by our scrap dealer at a Midwestern flea market.

Sometime between 1922 and 1964, the eggs’ provenance was lost. Certainly, the Westerner who bought the egg from the Russians knew what he had, but when the egg showed up in New York for auction no one—not even Sotheby’s appraisers—knew what it was. It’s not known if the “female buyer from the Deep South” knew what she had, either; she left no appraisal records or special instructions in her will. Clearly, the auctioneer or estate sale operator who liquidated her estate didn’t know the eggs provenance; neither did the flea market operator who sold the egg to the scrap gold dealer.

The discovery of the Vacheron Constantin Fabergé egg betrays a long line of missed opportunities, and creates more questions than it answers. What happened to the original Russian provenance? Who owned the egg until 1964? Why didn’t Parke-Bernet-Sotheby’s appraisers recognize the egg? Didn’t anyone think to remark that a jewel-encrusted golden egg containing a handmade antique watch might be a Fabergé?

I suppose I can forgive the folks at Parke-Bernet. If their auction was the first time the egg had been seen in public for 42 years, it’s doubtful that had any way to trace its’ provenance, and Fabergé copies abound. The Cold War was on, after all, and Russia probably wasn’t returning phone calls from decadent Western capitalists.

But shame on the estate liquidator and/or executor who sold the egg after the death of the “female buyer from the Deep South.” Yes, Google was only a few years old at the time and The Telegraph had not yet published their article on the egg, but qualified appraisers were listed in the phone book. Did no one think to call an appraiser?

The story of the Constantin Fabergé egg should be a wake-up-call to all executors and estate liquidators. Resources abound for identifying and valuing collectibles—WorthPoint foremost among them. To collectors, the message is: keep the provenance of your collection with your collection. If you are missing provenance, have your items appraised and keep the appraisal with your collection. Note in your will the contents of your collections, and where the provenance and/or appraisals can be found. Your heirs will appreciate your efforts.

There are still seven of the original 50 Fabergé Imperial eggs missing. You may not have one of them, but chances are excellent that you have items in your home right now that are more valuable than you realize. The ability to recognize the hidden value of your personal property is as close as your computer. Remember what a few minutes of research made in the story of the Constantin egg.

The Third Imperial Easter Egg will be exhibited at Wartski, 14 Grafton Street, London, W1S 4DE, from April 14-17 between 11a.m. and 5 p.m. This will be the first time it has been seen in public for 112 years.

Previously published by WorthPoint.com

Originally posted 2014-03-23 15:30:00.

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About Wayne Jordan

Wayne Jordan is a Virginia-licensed Auctioneer (#3481), as well as an AIA and CAGA Certified Personal Property Appraiser. Learn more at http://www.resaleretailing.com/wayne-jordan-auctioneer-appraiser/

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