At the core of ewolfs.com’s problems is the threat of eviction from their current location in Cleveland owing to a dispute with the building’s owner, Michael Wolf, who is the company’s founder and former chief executive officer.
One dispute is over the level of rent the company should pay for the building while the other concerns $280,000 spent on renovations. Together they have left ewolfs.com unable to conduct auctions or accept additional consignments and there are reports that consignors from June sales have not been paid.
The first legal shots were fired on May 25, when ewolfs.com filed a lawsuit against Wolf for nearly $280,000 to recover money for renovations made last August to the company’s building. ewolfs.com moved to that location last September, while Wolf was still CEO. ewolfs.com claims that their oversight committee, of which Wolf was one of five members, was unaware of the extensive renovations being made to the building. The company says Wolf did not disclose the renovations to the other members and that the committee did not authorise the expenses.
An attorney for Wolf has denied the allegations, saying that the committee was aware of the expenditures, which were part of ewolfs.com’s business plan.
Following ewolfs.com’s lawsuit, Wolf immediately filed an eviction notice against the company. When the three-day notice expired, he followed it up on June 14 with an eviction lawsuit against ewolfs.com for non-payment of rent. The two parties dispute the rent agreement made between them, with ewolfs.com claiming it agreed to pay $8000 per month for five years and that Wolf raised the rent to $13,125 after his resignation from the company in October. Wolf had founded the online auction company in spring 1999, after having run Wolf Galleries Inc. as a traditional auction gallery for more than 25 years.
Wolf’s attorney claims the higher rent amount was agreed upon by George Bielert, president of ewolfs.com. The two sides also disagree on the amount of rent that has been paid during the past year.
Day-to-day operations are now being handled by William Chrisant, who heads the departments for classical art and literature, books, autographs, maps and documents.
The layoffs at ewolfs.com came immediately after the company’s July Books and Prints auction. Controversy arose after that sale when more than 130 lots of National Geographic magazines were sold, bidders were notified by e-mail of the lots they had won, and then they received an e-mail stating that those lots were being returned to the consignor. Chrisant indicated that the ordeal with the National Geographic magazines had greatly hurt the company. “For us it’s a financial disaster. It’s devastating,” he said.
The ewolfs.com Website was taken offline for a period of time after the July auction. It is currently available again, but not all of the site’s features function. ewolfs fate is still uncertain. A final ruling has not been made yet on the eviction and there is the possibility that an alternative new location could be found.
Brick-and-mortar disputes may spell the end for ewolfs.com
A DISPUTE over rent and refurbishment could spell the end of ewolfs.com, the Ohio-based online auction house, who have shed 20 of their 24 staff and shut down temporarily in the crisis.
