On the floor of the Eyestorm art gallery lies a big mound ofplastic bags and brown cardboard boxes. It could be an artinstallation - after all, the gallery, one of Britain's brashest,once played host to just such a work by Damien Hirst that wasfamously and mistakenly cleared away because a cleaner thought it wasrubbish.
In fact, the bags and boxes tell a far more compelling story.Eyestorm, until recently the hottest brand in the world of Britart,has gone spectacularly bust with debts of pounds 18.5m.
Among its myriad of creditors are the great and the good of themodern art world. Hirst himself is owed pounds 78,000, most of whichhe is unlikely ever to see again. Also owed thousands are Jeff Koonsand the photographers Helmut Newton and Robert Mapplethorpe.
A friend of two of the high-profile artists on the list ofcreditors told The Independent on Sunday: "It's fair to say thatthey're all pretty annoyed about this. One of the big issues is thatthey have been unable to get their work back from the company. Myunderstanding is that it's being held by the receivers."
Others caught up in its demise are the Magnum picture agency, owedpounds 29,000, and Charles Schwab, one of America's highest-profilespeculators, who sank about pounds 1.3m into the project. DennisHopper, the Hollywood actor, is also understood to be a creditor.
Eyestorm, backed by millions of pounds of venture capital funding,promised to revolutionise the way the general public bought art.Launched in 1999 at the height of the dotcom boom, its mission was tosell modern art to millions over the internet. Traditional galleries,according to the Eyestorm mantra, were stuffy, intimidating placesthat put ordinary people off venturing into the art market.
So Eyestorm launched a snazzy website, opened two galleries - onein New York, the other in London - and attempted to put top artistsinto the homes of the masses. It signed a deal with Damien Hirst toproduce a series of limited-edition prints signed by the artisthimself and selling for pounds 1,000 each. Other artists were alreadyon board, such as David Hockney, Marc Quinn (also a creditor ofEyestorm) and Andy Goldsworthy.
Eyestorm paid pounds 2m for an advertising campaign, and itsparties were some of the best in town. The media was impressed bythis glittering new gallery. The Daily Telegraph called it the"antithesis of the intimidating establishment", while The SundayTimes listed it as one of the best new websites of 2000, adding:"Visitors who look at Eyestorm will not be able to understand whysomeone did not think of it before." The IoS was also approving;readers of this newspaper were offered a first shot at buying Hirstprints.
Alas, Eyestorm did not take the art market by storm. It had atotal of 7,000 paying customers - nothing like enough to pay back theinvestors and offset the huge spending. At its peak it employed 80staff on both sides of the Atlantic, levels unheard of for acommercial art gallery.
The IoS has now discovered that the company went into liquidationin May, owing pounds 18.5m, with a long list of creditors. It's notjust artists who are owed money; so too are picture framers, formeremployees, a public relations agency, customers and, of course, banksand the taxman.
What may be most galling for those owed thousands is the news thatEyestorm has now resurfaced, run by the same directors. Its galleriesmay have shut down but the website continues to do business, and anoffice still operates in New York, as does a warehouse and office ineast London. Four weeks ago, Eyestorm's founders, David Grob and DonSmith, bought the company back from the liquidators, BDO StoyHayward, for a figure understood to be pounds 130,000 with anotherpounds 200,000 to be paid over the next two years. Creditors areunlikely to get any of their money back.
Mr Smith told the IoS: "We are still very friendly with all ourcreditors. We stayed with the business through the liquidationprocess so we could sell it on. We wanted to get the best deal forthe creditors.
"Over a period of time we hope to make good some of those paymentsto the artists. We don't have to do this because this is a newcompany, but in all fairness we will try to honour these debts."
Mr Smith blamed Eyestorm's collapse on 11 September and on thewithdrawal of funding. He denied the firm had, like other dotcoms,been too free with other people's money. Lavish parties, heexplained, were "sponsored by drinks and lifestyle" companies.
Giles Howard, chief executive of Britart.com, a rival to Eyestormwhich still - and more successfully - sells art via the internet,said Eyestorm was a victim of its own success. "One of the thingsthat has allowed us to survive was because we couldn't raise the hugesums they did," said Mr Howard. "If we did we would have spent itlike they did."
One creditor, who did not wish to be named, owed around pounds10,000 for supplying materials to Eyestorm, said he had given up hopeof seeing his money again: "The problem is, in the art world the realmoney comes from selling to the corporate sector - and dotcoms haveenormous difficulty selling business to business. But that didn'tseem to bother Eyestorm. They were burning money every month."
The dotcom bombs
Boo.com
What happened: Online retailer called in the receiver in May 2000after spending pounds 100m. Boo had huge ambitions, but incompetentmanagement, and technical failure brought the company to earth.Fashionmall.com bought trademarks and technology for a bargain $2.
Excite@home
What happened: Providing high-speed internet access to millions inthe US through TV cables, this firm was expected to make millions.February saw one of the biggest dotcom crashes ever: Excite filed forbankruptcy protection in September 2000 citing debts of more thanpounds 700m.
Step.Stone.co.uk
What happened: Online recruiters Step.Stone left its own 136 stafflooking for work after closing its UK operation. In NovemberStep.Stone cut 500 jobs across Europe after spending pounds 20m onmarketing since 2000. It had mustered revenues of only pounds 8m.
Who: Sportal.com
What happened: Reached its peak during the Euro 2000 footballchampionships, for which it had secured exclusive rights, however, itdid not bring enough money in. Still afloat, "powered by"sportinglife.com, having been purchased by UKbetting.com for pounds1.
Charles Begley
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