You are currently browsing the archives for the Business category.

March 20th, 2014

Former Hallmark Institute Owner Pleads Guilty of Fraud, Tax Evasion

George J. Rosa III, the former owner of the Hallmark Institute of Photography, the photography school in Turners Falls, Massachusetts, pled guilty March 11 to charges of bank fraud and tax evasion, according to a report by Springfield, Massachusetts, TV station WWLP.

Rosa stood accused of diverting $2.6 million in school funds for his own personal use, and then covering up the theft by recording the outlays as business expenses on the school’s books. Tax fraud charges arose from tax returns that Rosa filed on the basis of the false financial records.

Federal prosecutors said Rosa used the stolen money to build a house for himself, gamble, and buy “clothing, footwear and accessories,” according to the WWLP report.

Sentencing is scheduled for May 29. Rosa could be sentenced to up to 30 years in prison for bank fraud, and five years for tax fraud. He also faces restitution fines.

Last month, former Hallmark Institute vice president Gregory Olchowski was sentenced to 6 months in federal prison for tax evasion, according to news site MassLive.com. Olchowski was charged with hiding from the IRS $200,000 in money transfers from the “former president” of Hallmark Institute to cover Olchowski’s personal expenses. Although that former president isn’t named in court papers, Olchowski worked at Hallmark when Rosa was president of the school.

Rosa’s financial and legal troubles began several years ago when he borrowed money to fund projects at Hallmark Institute from People’s United Bank  (PUB) in Springfield, Massachusetts. The bank, which was Hallmark’s largest creditor, ended up taking control of the school in 2009 when Rosa began defaulting on the loans. PUB then sold Hallmark Institute to Premier Education Group in Philadelphia.

Premier Education Group kept Rosa on as president of the school until 2012. According to a report from Daily Hampshire Gazette, Ed Martin, the school’s current president, said in a statement on March 12 that Rosa “separated from the company in August of 2012 in light of personal and business issues” that occurred before Premier took over the school.

Rosa filed for personal bankruptcy protection, also in 2009. In early 2010, PUB sued Rosa to prevent the bankruptcy court from discharging Rosa’s $2.2 million debt to the bank. In its lawsuit, the bank alleged that Rosa kept two sets of books at Hallmark Institute to hide assets from the bank and divert money for his personal use.

The bankruptcy court eventually declared Rosa in default of the loans for failure to respond to the bank’s fraud claims against him. The bank’s claims also attracted the attention of federal prosecutors, who ended up filing the criminal charges.

Related:
$3.6 Million in Debt, Photo School President Faces Fraud Charges

Photo School President Fails to Answer Fraud Charges

Bankruptcy Won’t Protect School President from $2.4 Million Debt

The Art Institutes: Legitimate Photo Schools or Accessories to Fraud?

March 17th, 2014

Photographers Could Get Royalties on Auction Sales Under Proposed Federal Bill

Few things are as frustrating to photographers as selling a print for a few thousand dollars–or less–then watching collectors reap huge profits by re-selling those same prints at auction years later for tens of thousands of dollars–or even more.

Two US Senators and a US Congressional representative have introduced a bill to cut visual artists in on that action with a 5 percent royalty on the price of visual works re-sold at auction. If it becomes law, the bill would apply only to works sold by auction houses–not by private individuals or dealers–and only when the auction price of a work exceeds $5,000, according to a report on the Art Law blog of Frankfurt, Kurnit, Klein & Selz (FKK&S), a New York law firm.

The auction royalty would be capped in 2014 at $35,000 for each sale. The cap would be subject to an inflation adjustment every year after that, according to the FKK&S report.  Auction houses would be obligated to collect the so-called auction royalty, and subject to civil claims from artists if they fail to collect and pay the royalty.

The bill, called the American Royalties Too Act (ART Act), was introduced last month in the Senate by Tammy Baldwin (D-WI) and Ed Markey (D-MA), and in the House by Congressman Jerrold Nadler (D-NY).

“American artists are being treated unfairly,” said Nadler in a prepared statement. “The benefits derived from the appreciation in the price of a visual artists’ work typically accrues to collectors, auction houses, and galleries, not to the artist.”

He noted that visual artists in 70 other countries are compensated when their works are re-sold at auction.

Unable to collect royalties from the re-sale of existing prints that have increased significantly in value, US photographers sometimes respond by issuing new limited editions of their prints–in different sizes or using different printing processes from earlier editions.

That practice angers collectors. For instance, William Eggleston created limited-edition digital inkjet pigment prints of some of his most iconic images, and earned $5.9 million by selling them at a Christie’s auction in March, 2012. He was promptly sued by financier Jonathan Sobel, a long-time collector of Eggleston’s vintage dye-transfer prints. Sobel alleged that the new prints devalued Sobel’s dye transfer prints and amounted to a breach of contract on Eggleston’s part.

Sobel eventually lost the legal fight, although he had the sympathy of dealers and gallerists who worry that photographers could harm their reputations and the market for photographic prints if they anger collectors by issuing new editions.

The ART Act, if it becomes law, could help reduce incentive to issue new editions by giving photographers another way to profit from the dramatic rise in the value of their work.

But success of the bill is by no means assured.

Nadler introduced a similar bill in 2011 that died in committee. The US Copyright Office, which was opposed at the time to instituting resale royalties for visual artists, has since changed its position on the matter, according to the FKK&S report. But collectors and auction houses are certain to object to paying royalties to artists. And the ART Act seeks to change a long-entrenched principle of copyright law called the First Sale doctrine, which  allows buyers of copyrighted works to do with them as they please, with no obligation to the artists who made them.

Related:
Collector Sues Eggleston Over New Prints of Limited Edition Works

Q&A: Art Collector Jonathan Sobel Explains His Beef with William Eggleston

What Does Limited Edition Really Mean? (subscription required)

March 13th, 2014

Calumet Photographic to Liquidate, Closes US Stores

calumet-FBCalumet Photographic, the 75-year-old camera supply and rental company, has filed for Chapter 7 bankruptcy, the Chicago Tribune reports.

This morning, Calumet announced on its Facebook page that it had closed all its stores in the US, though its stores in Europe remain in business.  Calls to Calumet stores in New York, Chicago and Los Angeles were not returned, and the company’s website is down.

Calumet’s bankruptcy filing lists 585 creditors, including photo manufacturers such as Canon, Fuji, Manfrotto, Phase One, Hasselblad, Cambo, Mac Group and many others.

PDN will continue to follow this story.

March 10th, 2014

Commercial Drones Are Legal, Federal Court Says

A federal administrative court judge has determined that drones–aka unmanned aerial vehicles, or UAVs–can be used for commercial purposes because the Federal Aviation Administration has no regulations on the books that prohibit such uses.

Vice.com reported that the judge made the ruling last week in a case involving a photographer who had appealed a $10,000 fine for using a drone to shoot a video commercial, allegedly in violation of FAA rules.

The FAA immediately appealed, explaining in a statement that it “is concerned that this decision could impact the safe operation of the national airspace system and the safety of people and property on the ground.”

The FAA had fined photographer Raphael Pirker for unauthorized commercial use of a drone in 2011, after Pirker had used a remotely-controlled aircraft to produce a video commercial for the University of Virginia. Pirker had piloted the aircraft in the vicinity of the university, located in Charlottesville, Virginia.

Pirker, owner of UAV video production company Team Black Sheep, won his appeal of the fine on the grounds that a drone is in the same class of aircraft as model airplanes, which the FAA has never regulated. (The FAA has asked model airplane operators to fly the planes under 400 feet, and to stay away from airports, but those rules are strictly voluntary.)

The administrative court ruling means that photographers can use drones for commercial purposes, at least for now. But with the FAA opposed to unregulated use of drone aircraft in the US, it’s a safe bet that the agency will try to impose new administrative rules–or seek legislation–to restrict the use of drones in the near future.

Related:
Hartford Police Sued for Stopping Camera Drone, Chasing Photog Away

March 6th, 2014

Getty’s Craig Peters on Why Free Images Are Good for Photographers, And for the Photo Industry

Following the announcement by Getty Images that the agency would be allowing non-commercial uses of its images free of charge, we interviewed Craig Peters, Senior Vice President of Business Development, Marketing at Content Images at Getty, to try and find out what the agency hopes to gain from this extraordinary decision.

As we reported today on PDNOnline,  Getty has released a new embed tool to make it easy for non-commercial users to share images from Getty on websites, blogs and social media channels. The new tool enables Getty to collect data on those users and and push ads through the embed viewer. We asked Peters how ad revenue will be shared, what this new business model means for the perceived value of images, and whether Getty is changing its position on enforcing copyrights on images.

(We used the image above for free, using Getty’s Embed tool)

PDN: Getty has various collections, from different sources. What images are excluded from this free usage initiative?
Craig Peters: It’s hard to give you a specific answer. The vast majority of images are in, [unless] we have restrictions from the photographer or copyright owner.

PDN: Are news and celebrity images available as soon as Getty uploads them?
CP: They’re made available as soon as they’re uploaded.

PDN: Why is Getty giving up on the idea of charging everyone–even small non-commercial users– for use of images? (more…)

March 6th, 2014

Getty’s Free Image Program: New Revenue Model, or a Surrender to Copyright Infringement?

Getty Images lit up the Twittersphere today with an announcement that it was making its archive available free of charge for bloggers and other non-commercial users. Some of the big questions are: What is Getty gaining by making images free to the public? How does Getty’s decision affect not only its own contributors, but all photographers? And are there any hidden costs to non-commercial users who take advantage of Getty’s free images?

Getty said in its announcement that it was releasing a new embed tool to make it easy for non-commercial users to share its images on websites, blogs and social media channels.

Getty CEO Jonathan Klein says in the announcement that the “easy, legal sharing…benefits our content contributors and partners.”

One benefit to the company and its partners is that by automatically crediting the images and linking them back to Getty’s website, the embed tool makes it easy to find and license the images for commercial use.

At the same time, the embed tool will also makes it easier for Getty to track non-commercial uses of its images, and the users who take advantage of the company’s offer of free images.

To read what Getty’s terms of service allow it to do with users’ information, and more on the implications of this new business for the perceived value of all images, see our news story, now on PDNOnline.

Related Articles

Getty’s Free Image Program
ASMP To Getty Photographers: Time to Bail

March 4th, 2014

Trunk Archive Acquires North American Licensing Rights for Magnum Photos

Image licensing company Trunk Archive announced today that it has acquired North American licensing rights to the image library of Magnum Photos.

Statements from both Magnum and Trunk focused on the possibilities for Trunk to do a better job generating revenue from the archive than Magnum has.

In a statement, Magnum CEO Giorgio Psacharopulo said the agency is “confident that this partnership will allow Magnum’s iconic imagery to reach a new audience of creative professionals. There exist many hidden gems within the Magnum collection and we anticipate that these will be rediscovered through our association with Trunk Archive.”

Trunk Archive CEO Matthew Moneypenny said his company is “proud to be representing this prestigious collection and very excited to find new licensing opportunities for these exceptional images.”

The news comes just a few days after Trunk announced its acquisition of rep firm Bernstein & Andriulli, and Gallery Stock, its sister company.

Trunk Archive represents more than 250 photographers around the world for secondary image sales. Founded seven years ago by Moneypenny, a former Art + Commerce image licensing agent, it has offices in New York, Los Angeles, Paris, Sidney, Hong Kong, Beijing and Shanghai.

Related: Trunk Archive Buys Bernstein & Andriulli, Gallery Stock
(Re)Sales Opportunities: A variety of creative licensing opportunities exist for photographers interested in capitalizing on their existing imagery. (subscription required)

February 19th, 2014

Trunk Archive Buys Bernstein & Andriulli, Gallery Stock

Image licensing agency Trunk Archive has acquired Bernstein & Andriulli (B&A), the photographers’ rep firm, and its sister company Gallery Stock, Bernstein & Andriulli announced today.

Howard Bernstein said in a prepared statement that Trunk Archive’s image collection and service capabilities “make [Trunk Archive] the perfect partner for future growth and offers many strategic opportunities to our artists.”

B&A represents about 45 photographers. The firm also represents illustrators, directors, hair and makeup artists and stylists. Gallery Stock represents about 120 commercial, fine-art and editorial photographers for secondary sales of their images.

B&A and Gallery Stock will continue to operate under Bernstein’s direction, and retain their brand identities, according to the announcement.

Trunk Archive CEO Matthew Moneypenny said in the statement that the combined companies will give clients “unprecedented access to the world’s most creative and thought-provoking imagery,” but he provided no specifics.

Trunk Archive represents more than 250 photographers around the world for secondary image sales. Founded seven years ago by Moneypenny, a former Art + Commerce image licensing agent, It has offices in New York, Los Angeles, Paris, Sidney, Hong Kong, Beijing and Shanghai.

Related:
(Re)Sales Opportunities (subscription required)

February 17th, 2014

Kodak Alaris Hires New CEO from Motorola Mobility

Kodak Alaris, the personal and document imaging company now owned by the UK Pension Plan (KPP), named Ralf Gerbershagen its new Chief Executive Officer on Friday. Gerbershagen was previously at Motorola Mobility, currently part of Google, where he had held positions as Managing Director Motorola Germany GmbH and VP & General Manager Motorola Mobility Europe and had responsibility for several product portfolios such as Network Infrastructure equipment, Smartphones and Accessories. Gerbershagen’s appointment takes effect April 1, 2014.

Eastman Kodak announced in April 2013 that it was transferring its Personalized Imaging and Document Imaging businesses to its UK Kodak Pension Plan (KPP). The transfer settled the $2.8 billion that KPP claimed against Eastman Kodak during the former film giant’s bankruptcy proceedings. In September, the deal was completed and the company announced its new name, Kodak Alaris.

Kodak Alaris’s Personalized Imaging business includes the manufacture and sale of film products and photographic paper, as well as its business in retail photo kiosks and dry lab systems, and digital souvenir photography services at theme parks, resorts and other destinations.

Gerbershagen will be based in the UK and report to Steven Ross, Interim Chairman of the Board of Kodak Alaris.

Related Articles
Kodak Turns Over Film Division to Its UK Pension Plan

Kodak To Emerge from Bankruptcy in Early September

Kodak Files for Bankruptcy Protection

December 5th, 2013

Barter, Creative Collaboration Pay Off for Photog Mark Mann and Custom Tailor Lord Willy’s

A collaboration between photographer Mark Mann and men's custom tailor Lord Willy's, with art direction and styling by the brand's co-owner, Alex Wilcox. Wilcox (right) is pictured here with a client. It's also his head on the wall.

A collaboration between photographer Mark Mann and men’s custom tailor Lord Willy’s, with art direction and styling by the brand’s co-owner, Alex Wilcox. Wilcox (right) is pictured here with a client. It’s also his head on the wall.

“It’s such a joy to work with an art director who’s also the client,” says Mark Mann, the photographer behind a series of images currently gracing the walls and website of Lord Willy’s, a men’s custom tailor in New York’s Nolita neighborhood. (more…)