Stepping down are president and chief executive officer Diana D Brooks, who has been with the company since 1979 and has served as its president and chief executive since 1994, and the company's chairman and largest shareholder, Detroit real-estate developer Alfred A Taubman.

The two long-time executives are succeeded by Michael Sovern, former president of Columbia University in New York, who becomes chairman, and William Ruprecht, who becomes president. Ruprecht, as managing director of Sotheby's North and South America, had been responsible for much of the day-to-day administration of Sotheby's since 1994.

Sotheby's wouldn't comment on whether the resignations were part of a settlement with the Justice Department but said it had recently met with Government investigators to ``discuss a prompt and appropriate resolution of this investigation, which will allow the company to put this difficult matter behind it.'' The company also warned that the investigation and lawsuits ``could have a material impact on Sotheby's financial condition.'' In a statement, Taubman and Brooks (49) gave no explanation for their actions, but Brooks said her decision was ``in the best interests of the company.'' Brooks declined to comment further. Taubman, 75, also declined to comment.

Taubman has about a 23 per cent controlling interest in the firm, but serves in a non-executive capacity; it is Brooks who is closely associated with the company, often taking a high-profile role as auctioneer, spokeswoman and figurehead that has entwined her with Sotheby's in the minds of many collectors and shareholders.

The Justice Department, which declined to comment on the resignations, has been investigating price fixing in the art world since 1997. On January 28 of this year, Sotheby's chief competitor, London-based Christie's International, stunned the art world by disclosing that it had cut a deal with the Justice Department for ``conditional amnesty'' in exchange for information on price fixing in the industry, including information about its own conduct under prior management. One issue in the Government investigation was whether Christie's and Sotheby's had colluded to set prices; twice in the past decade the two firms raised the commissions they charge buyers or sellers within weeks of each other.

In the wake of Christie's announcement last month, Sotheby's stock sank and a series of class-action lawsuits seeking damages for collectors and shareholders were filed. Sotheby's stock has fallen 26 per cent since Christie's announcement. In 4 p.m. New York Stock Exchange composite trading on Friday, Sotheby's shares rose 12.5 cents to $17.75.

The changeover of the 256-year-old company throws Sotheby's into at least temporary chaos. The firm didn't have a clear succession strategy or heir apparent and no member of the new management team has longstanding experience in the art world.

Ruprecht, 44, has served as the managing director of Sotheby's in North and South America since 1993, and has run the classic-car and rug departments, but has had little experience with paintings and fine art, the bread and butter of the industry. Robin Woodhead, Sotheby's current chief executive of Sotheby's Europe and Asia, and Deborah Zoullas, an executive vice president of Sotheby's Holdings Inc, have also been added to the board of Sotheby's Holdings Inc. Neither has been with the company for more than two years. Since stepping down as president of Columbia University in 1993, Sovern, 68, has spent much of his time back in the classroom as Columbia Law School's Chancellor Kent professor of law. Sovern also has extensive experience as an arbitrator for disputes between a number of private companies and public agencies.

(The Wall Street Journal)