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March 5, 2010 - Ansel Adams’ son sues museum for prints
COURTHOUSE NEWS SERVICE - The son of photographer Ansel Adams is suing The Fresno Metropolitan Museum, which closed in January 2010 due to financial troubles, in Superior Court for the State of California to recover six original Adams prints that he donated to the museum in 1983. Dr. Adams seeks to enjoin the museum from selling these works at auction to help pay off the museum’s $4 million worth of debt as well as a declaratory judgment stating that his donation was a restricted gift that the Directors cannot dispose of at their discretion.
[ARIS Commentary: The Adams case highlights the title risks plaguing museums involved in bankruptcy proceedings or other distressed situations, in particular, claims between the institution or its general creditors and its donors, who previously gifted art to the museum and now object to their art being liquidated.]
February 22, 2010 - Tussle over $1.4 million Warhol painting
COURTHOUSE NEWS SERVICE - Stephen Lachapelle has sued Nancy Bishop in California Superior Court in Los Angeles County for declaratory judgment of ownership of the Warhol painting entitled “Portrait of Linda Cossey with Camera,” which sold at Christie’s London February 11, 2010 sale for $1,374,750. Mr. Lachapelle claims that in 1990 he loaned Ms. Bishop $25,000 based on a handshake to purchase the painting, but Ms. Bishop never repaid the money. Ms. Bishop alleges that she is the rightful owner. Until Mr. Lachapelle and Ms. Bishop settle their ownership dispute with a written agreement or court order, the successful bidder’s title to the painting is in flux and Christie’s will retain the sales proceeds.
[ARIS Commentary: Buyers should be aware of the risk of creditor and bank liens potentially infringing art sold at auction or in private transactions. It is challenging for laypersons without access to confidential information about the provenance history of an artwork to discover whether upstream owners have used their art as loan collateral and whether sellers obtained possession of their art from default by a borrower.]
February 21, 2010 - Artwork caught in custody battle
HOUSTON CHRONICLE - Joanne Herring, known for her alliance with Representative Charlie Wilson in supporting anti-communist forces in Afghanistan, is suing in Texas civil court in Harris County Geoffrey Rice to recover an 18th century Scottish painting entitled “Portrait of a Man” that she reported stolen from her home in 1986. Mr. Rice, who consigned the work to Sotheby’s for sale, alleges that he purchased the painting in 1983 from Hart Galleries (see ARIS News, April 28, 2009) but has no documentary evidence or bill of sale. Sotheby’s has pulled the painting – worth an estimated $15,000 to $20,000 – from auction and will continue to hold it pending resolution of the ownership dispute.
[ARIS Commentary: Litigation expenses often far exceed the financial value of art subject to ownership disputes. In the Herring case, both parties will likely spend more than $20,000 (that is the high estimate for the work) on attorney fees in a trial set for 2011. Art title disputes can be fierce battles especially when both parties are good-faith purchasers with emotional or sentimental attachments to the art.]
See also ““Charlie Wilson’s art war,” New York Post, February 22, 2010.
February 11, 2010 - Judge in Italy orders return of Getty Bronze
LOS ANGELES TIMES - A judge in Italy has ordered the J. Paul Getty Trust and Getty Museum in Malibu, California to return to Italy a bronze statue known as the Victorious Youth dated 300 B.C. to 100 B.C. This decision is the latest ruling in a long litigation battle between the museum and Italy. The Getty indicated it will appeal the decision on the basis that it has had legal title to the statue for more than 30 years, beginning shortly after the statue was discovered in international waters.
February 10, 2010 - Sotheby’s sues Chinese buyers for nonpayment of art won at sale
BLOOMBERG - Sotheby’s is suing in the Judiciary of the Hong Kong Special Administrative Region of the People’s Republic of China several Chinese individuals, who successfully bid for antiquities and paintings and then later refused to pay the auction house. This cultural-political protest practice garnered headlines in February 2009 when a bidder refused to pay for two animal fountainheads at Christie’s Paris auction of Yves Saint Laurent’s art collection (see ARIS News, March 3, 2009).
February 9, 2010 - Collector sues gallery over Basquiat helmet
ARTINFO - An art collector is suing Katzuhito Yoshii and Yoshii Gallery in New York State Supreme Court in New York County for selling a Jean-Michel Basquiat sculpture for $300,000 without the authority to do so. The plaintiff alleges that he did not consign the work for sale but rather loaned it to the gallery as a favor. The plaintiff is suing Mr. Yoshii for breach of bailee duties, conversion, fraud and $500,000, the estimated total value of the sculpture.
[ARIS Commentary: Collectors should be aware of inherent title risks and potentially unfavorable bankruptcy and UCC laws when consigning or transferring physical possession of their art to galleries and dealers.]January 29, 2010 - The Art World’s Gordon Gekko
THE WALL STREET JOURNAL - Asher Edelman, the notorious former Wall Street banker, art collector and owner of New York-based art gallery, Edelman Arts, Inc., (see ARIS News, December 3, 2009 discussing Mr. Edelman’s seizure of art at another gallery’s booth with assistance of the U.S. Marshals at Art Basel Miami Beach 2009), has created an art financing company, Art Assured Ltd. Mr. Edelman, who allegedly raised $12 million from investors for his new business, intends to join boutique lenders and banks accepting art as loan collateral (see ARIS News, October 22, 2009, July 30, 2009) as well as the small niche of financiers offering private guarantees for artworks consigned to public auction.
[ARIS Commentary: With the rise of third-party financiers like Mr. Edelman increasingly providing private, undisclosed guarantees for art worth thousands to millions of dollars, sellers will likely become more comfortable consigning artworks to auction and there will likely be more lots per sale although there will also likely be less transparency in auction sales concerning sellers' identity and their ownership interests in consigned works.]
January 12, 2010 - Artists miffed over Rothschild Foundation’s missing grant money
THE NEW YORK TIMES - The Judith Rothschild Foundation – created by the will of the trust’s namesake artist to give grants to contemporary artists’ estates and art organizations – has defaulted on numerous 2009 grants worth over $100,000. Numerous grantees, who filed complaints with the State of New York Office of the Attorney General, have alleged that the sole trustee of the foundation illegally purchased thousands of drawings by emerging artists with foundation money contrary to the terms of the artist’s will.
[ARIS Commentary: The Judith Rothschild Foundation case is a prime example of the title risk of lack of authority to purchase art and challenges related to limited oversight of charitable organizations in the trust and estate context. The April 2009 to January 2010 exhibition at the Museum of Modern of Art entitled “Compass in Hand: Selections from the Judith Rothschild Foundation Contemporary Drawings Collection,” publicly displayed for the first time part of the foundation’s multi-million dollar art collection donated to the museum and exposed the foundation to the grantees’ potential claims. The New York Attorney General will likely investigate whether the trustee was authorized to acquire and gift the exhibited drawings as well as acquire other art in the foundation’s collection and whether the museum acquired clear legal title to works gifted by the foundation.]
See also “The Vanishing Benefactor,” The Wall Street Journal, January 14, 2010.
January 7, 2010 - Tavern in the red: Famed eatery forced to sell the silver
THE WALL STREET JOURNAL - Tavern On The Green, the landmark restaurant in New York City’s Central Park, which filed for bankruptcy in the United States District Court for the Southern District of New York after losing its operating license and with $8 million in debt, will be selling at public auction all of the restaurant’s silver, china, décor and lighting. New York City has claimed that around a dozen items slated for the sale including wood paneling and signage cannot be sold because they are part of the structure of the building and owned by the City. The bankruptcy court is expected to determine the owner of these disputed objects.
January 6, 2010 - Art thieves grab $1.15 million Degas as heists spread
BLOOMBERG - A pastel drawing by Degas worth €800,000 was stolen from the Musée Cantini in Marseille, France. The Degas work was on loan from the Musée D’Orsay in Paris for a traveling exhibition. There is growing concern over art theft in France given theft of this Degas picture, theft of 30 works worth over €1 million from the villa of a private collector in southern France, theft of a Picasso sketchbook from the Picasso Museum in Paris as well as prosecution of stolen art ring operating at Hôtel Drouot in Paris (ARIS News, December 7, 2009). Authorities are investigating whether there are any connections among the multiple high-profile art thefts in France. (See also “Art thefts rock France for second time in a week,“ The Financial Times, January 3, 2010.)
December 26, 2009 - Yale: Suit over Van Gogh work imperils other art
THE NEW YORK TIMES - In Motion to Dismiss papers filed in the United States District Court of Connecticut in litigation between Yale University and Pierre Konowaloff over ownership of “The Night Café” (see ARIS News, June 3, 2009, May 30, 2009, March 24, 2009), Yale argues that if the court finds that the university lacks clear legal title to the Van Gogh work because it was nationalized by the Russian government in 1918, then the court will cloud title to billions of dollars worth of art in the international market and adversely affect United States foreign relations with Russia. Yale also claims that the statute of limitations period has passed. The claimant asserts that the case should be decided on its facts without regard to diplomacy with Russia, which is not a party to the lawsuit.
December 9, 2009 - Family feud imperils a prized Spanish art collection
TIME - A key issue in the multimillion-dollar inheritance dispute between Borja Thyssen and his mother Carmen Cervera is ownership of over one thousand important artworks currently housed at the Thyssen-Bornemisza Museum pursuant to a loan agreement which is set to expire in 2011. (See also ARIS News, September 9, 2009 “Spain cannot shake suit over Nazi looted art” discussing WWII restitution claim for Pissarro painting in the collection of the Thyssen-Bornemisza Museum.) Mr. Thyssen claims he is co-heir of the entire collection and full owner of two works including a Goya painting and estimated to be worth a combined €7 million that were gifted by his father. The fate of the Thyssen art collection is unknown, that is, whether a long term loan to the Spanish government will be renegotiated and renewed or the collection will be divided between Mr. Thyssen and Ms. Cervera and possibly sold at auction.
December 7, 2009 - The art of the trade
MAINE ANTIQUE DIGEST - Museums often acquire art through donations (such as promised gifts, long-term loans that turn into gifts, “fractional” or “partial” gifts and charitable remainder trusts) as well as exchanges with museums and dealers or a combined gift and swap transaction.
[ARIS Commentary: Museums and dealers should be aware of possible title risks in acquiring traded art, which is on the rise, and protect themselves by ensuring that the party on the other side of a swap has clear legal title and the right to transfer the title of the exchanged art. For example, art that a museum trades for another work must generally be deaccessioned in accordance with the donor’s bequest, the institution’s collection management policy and any applicable state museum laws. The downstream-buyer of the relinquished work will likely not know that the selling dealer acquired the work through a museum exchange.]
December 7, 2009 - Preliminary charges vs 9 in Paris auction sweep
THE NEW YORK TIMES - An auctioneer and several commission agents associated with the prestigious Paris-based Hôtel Drouot, a large umbrella organization for smaller auction houses selling fine art, antiques and antiquities, are the subject of a police investigation and preliminary charges for their involvement in an alleged stolen art ring. French authorities discovered stolen art, frames and furniture including a previously misidentified Gustave Courbet painting in the homes of the targeted auction house employees, who have allegedly been involved in these art thefts since 2001.
December 5, 2009 - Italian police seize £90m art stash from Parmalat founder
TELEGRAPH - Italian officials seized numerous artworks by Cezanne, Degas, Picasso and Van Gogh worth an estimated $150 million dollars hidden by Calisto Tanzi, the founder of the bankrupt dairy company Parmalat. Prosecutors are investigating whether Mr. Tanzi, who denied owning valuable art assets and has been convicted for market-rigging and other charges, had offered to sell some or all of his collection.
December 3, 2009 - U.S Marshals seize Degas, Miro works at Art Basel Miami
BLOOMBERG - As Art Basel Miami Beach 2009 opened, U.S. Marshals seized over $6 million dollars worth of art including paintings by Degas, Leger, Miro and Klein from the booth of Zurich-based Galerie Gmurzynska. The Marshals executed a private default judgment for over $750,000 dollars that the New York-based gallery Edelman Arts, Inc. (litigating as an assignee of XL Specialty Insurance Corp.) obtained in the United States District Court for the Southern District of New York against Galerie Gmurzynska for purportedly damaging a Robert Ryman painting while it was on consignment. This is the first time that art has been seized at Art Basel Miami Beach, one of the largest, most important modern and contemporary international art fairs.
[ARIS Commentary: The U.S. government’s seizure of art from the booth of a Swiss gallery to satisfy a New York federal court order represents the current trend in the international art market to treat art as a financial asset akin to inventory in other industries. Although the U.S. Marshals Service will most likely try to auction the impounded art and use the proceeds from the sale to satisfy the judgment and legal fees, the seized art may be unsalable due to surrounding ownership disputes. For instance, the seized art may have been consigned to the gallery and thus subject to title claims brought by consignors and the gallery will most likely file suit to recover possession of the impounded art.]
December 2, 2009 - Prince of Liechtenstein threatens major Royal Academy show
THE ART NEWSPAPER - Prince Hans-Adam II of Liechtenstein has stated that unless the UK government promptly grants an export license for an Alonso Coello painting, which the Prince purchased from the collection of Lord Northbrook in London in 2006, he will not lend over 100 artworks for the planned September 2010 exhibition of the “Liechtenstein Collection” at the Royal Academy of Arts. For nearly three years, the Coello painting has been impounded in London while HM Revenue & Customs investigates the Prince’s export license application for the Coello work, one of nine paintings sold from the Northbrook collection. In addition, HM Revenue & Customs must generally allow a UK buyer (in this case the National Gallery has expressed an interest and a desire to conduct fundraising) to match the £2 million pound purchase price the Prince paid for the Coello painting.
[ARIS Commentary: Many European countries including the United Kingdom have broad customs regulations for cultural property, which make it time-consuming and difficult for foreign buyers to export newly purchased art. In this context, foreign buyers may not obtain clear legal title to art exported without a proper license or to art that is subject to an on-going licensing investigation.]
November 24, 2009 - Recovered Warhol 'Heinz 57' crate leads to arrest
BLOOMBERG - James Biear has been charged with criminal possession of a Francis Picabia drawing as well as mail and wire fraud for stealing and selling an Andy Warhol sculpture from the home of his employer, Kenward Elmslie, grandson of publisher Joseph Pulitzer. Mr. Biear represented to two art dealers and the down-stream purchaser, a New York collector who paid $220,000 dollars for the Warhol crate, that the Warhol work was a gift from his uncle and that he had clear legal title and the right to transfer the title to the work.
November 24, 2009 - Expanding personal investment options: Trading and borrowing against fine art
ART DAILY - Given the uncertainty in the financial markets, many investors are diversifying their portfolios by including up to ten percent in art, which today is widely recognized as a viable, traded asset class. Industry experts suggest that currently it is an opportunistic time to buy certain kinds of art across various price points. In addition, owners are increasingly using their art to borrow against, and many lenders are allowing borrowers to maintain possession and display their art collateral in their home or office. To protect themselves, art lenders are requiring appraisers to follow USPAP (Uniform Standards of Professional Appraisal Practice) in appraisals.
[ARIS Commentary: USPAP guidelines provide that encumbrances, ownership interests and the provenance of the personal property may have an economic impact on the value of the art. In order to assure the efficacy of the USPAP appraisal, clear legal title should not routinely be assumed and the use of extraordinary assumption or hypothetical condition in the appraisal can create acceptability issues.]
November 21, 2009 - German auction house pulls painting disputed in Nazi-era restitution claim
STARTRIBUNE - Lempertz, a Dusseldorf-based auction house, withdrew a painting from an upcoming sale in light of a WWII reclamation claim made by the estate of Max Stern (see ARIS News, November 5, 2009, November 22, 2008). The estate is seeking to recover hundreds of paintings that Mr. Stern sold at the same Lempertz auction house in 1937 pursuant to Nazi orders. Since that time, Lempertz has repeatedly sold and attempted to resell artwork owned by Mr. Stern.
November 16, 2009 - Validity of verbal deals under dispute
THE ART NEWSPAPER - Moscow-based art dealer Gary Tatintsian has sued Luhring Augustine Gallery, co-owned by Roland J. Augustine, past President of the Art Dealers Association of America, in the Supreme Court of the State of New York for breach of contract and unjust enrichment. Mr. Tatintsian, who over several years acquired $10 million dollars worth of art from Luhring Augustine Gallery, alleges that the gallery failed to supply certain artworks in accordance with the parties’ amended verbal agreement. Luhring Augustine Gallery has filed a motion to dismiss disclaiming the validity of an amended agreement.
[ARIS Commentary: This litigation between sophisticated art market insiders, that is an international, Russian art dealer and respected, contemporary New York gallery, highlights the challenges in the old-world art industry model in which parties traditionally relied upon handshakes and oral agreements in art transactions ranging from thousands of dollars to multi-million dollar deals. Buyers should be aware that when acquiring, consigning or selling art without a written agreement the statute of frauds doctrine, which provides that certain kinds of contracts must be memorialized in a signed writing, may invalidate verbal purchase agreements if and when contested in court.]
November 13, 2009 - UK museums can return looted art
BBC - The Holocaust (Stolen Art) Restitution Act allows museums in England and Scotland to return artworks stolen during WWII to claimants and their heirs in accordance with recommendations of the Spoliation Advisory Panel. Before this law was enacted, British institutions had to make ex-gratia payments to claimant families based on the valuation of the looted artifact in the national museum’s collection.
November 10, 2009 - Henkel heir, mistress settle suit on $48 million in two Hirsts
BLOOMBERG - Udo Fritz-Hermann Brandhorst, heir to the Henkel AG & Co. fortune and a major art collector, and his former New York-based art dealer mistress, Venetia Kapernekas, agreed to an out-of-court settlement resolving their ownership dispute of various artworks as well as custody of their daughter. In February 2009, Mr. Brandhorst blocked Ms. Kapernekas’ sale of two Warhol paintings she consigned to Sotheby’s in London -- one which Mr. Brandhorst gifted to Ms. Kapernekas and one which he gifted to their daughter. Ms. Kapernekas claimed an ownership interest in two Hirst works worth an estimated $48 million dollars on the basis that Mr. Brandhorst acquired the works as investments for her benefit.
November 10, 2009 - Ancient texts heading back to Vienna
COURTHOUSE NEWS SERVICE - A bible and commentary dated 1516-1517 that was stolen during the November 1938 pogroms in Vienna, Austria was pulled from a June 2009 auction at Kestenbaum & Co. in New York and is being restituted by the Swiss consignor to the Jewish Community of Vienna. U.S. Immigrations and Customs Enforcement discovered the provenance of the books and that the books were stolen property that had been smuggled into the USA.
November 5, 2009 - Providence couple embroiled in search for Nazi art
MUSEUM SECURITY NETWORK - Agents from the Art and Antiquities branch of U.S. Immigration and Customs Enforcement (ICE) searched Mr. and Mrs. Bissonnette’s home and seized pursuant to a warrant evidence related to the sale or transfer of art illegally imported into the country. Last year, the First Circuit Court of Appeals affirmed the Rhode Island District Court’s decision that Mrs. Bissonnette must return a Winterhalter painting that she inherited from her stepfather to the estate of Max Stern, a German Jewish art dealer, who sold off his inventory including the Winterhalter painting pursuant to Nazi orders during WWII (see ARIS News, November 22, 2008). During settlement negotiations with the Stern estate, Mrs. Bissonnette shipped the painting to Germany. The painting has since been returned to the Stern estate and is now on loan to the Montreal Museum of Fine Art. ICE officials have not commented on the nature of the investigation.
October 27, 2009 - Auction house Ritchies forced into bankruptcy
THE GLOBE AND MAIL - Ritchies, a Canadian-based auction house, has been forced into bankruptcy. For several months, Ritchies has been in financial distress and has failed to pay consignors for their artworks sold in May 2009 (see ARIS News, July 22, 2009).
October 22, 2009 - Nazi looted paintings discovered at Southern Methodist University, future home of the George W. Bush Presidential Library
FORBES - Two paintings by Spanish master Bartolome Esteban Murillo that were stolen by the Nazis in 1941 from the Rothschilds home in Paris were discovered in the collection of Southern Methodist University’s Meadows Museum. It is unclear whether the paintings, which are valued at around $10 million dollars, were properly restituted after WWII before being donated to the museum. The museum has agreed to list the updated provenance of the pictures on its website in accordance with Nazi-era research and disclosure guidelines promulgated by the American Association of Museums and the Association of Art Museum Directors.
October 22, 2009 - Creditors seize Dutch museum’s art collection
ARTINFO - ABN AMRO has seized $48 million dollars worth of art from the collection of the Scheringa Museum to satisfy the museum’s namesake founder Dirk Scheringa’s outstanding debts. Mr. Scheringa, an avid art collector and owner of DSB Bank, which filed for bankruptcy in the Dutch courts, pledged his art collection to secure financing. It is unknown whether ABN AMRO will try to sell any of Mr. Scheringa’s art. In April 2009, it was widely reported that ABN AMRO had similarly seized valuable art used as loan collateral by Dutch businessman Louis Reijtenbagh (see ARIS News, April 27, 2009, April 22, 2009, April 17, 2009, and April 3, 2009).
October 8, 2009 - Breaking: Astor trial concludes; Anthony Marshall convicted of theft
THE WALL STREET JOURNAL - Anthony Marshall, the son of the late New York philanthropist Brooke Astor, was convicted of stealing millions from his mother’s $200 million dollar fortune including several of his mother’s artworks as she suffered from Alzheimer’s disease. Mr. Marshall’s attorney was also convicted of five charges including fraud, conspiracy and forgery.
[ARIS Commentary: The Astor case magnifies on a large financial scale the common challenges facing family estates that include art collections. For instance, family members often dispute among themselves which family member owns and has the authority to sell artworks in the estate especially when the decedent’s last will and testament is amended by an elderly person having questionable mental capacity.]
October 7, 2009 - Dispute over Schiele painting heads to trial
COURTHOUSE NEWS SERVICE - The United States District Court for the Southern District of New York held that there is a factual issue for trial in the WWII art restitution case involving Egon Schiele’s painting entitled the “Portrait of Wally.” The U.S. government seized the picture over ten years ago when it was on loan from the Leopold Museum in Vienna to the Modern Museum of Art in New York. At issue is whether the painting was stolen by the Nazis in 1939 from the Jewish owner Lea Bondi. The painting is currently being stored in a warehouse in Queens, New York.
October 5, 2009 - US Department of State investigates Museo del Prado
THE ART NEWSPAPER - The U.S. Department of State is investigating whether the Museo Nacional del Prado in Madrid, Spain violated a federal law that prohibits trafficking of artworks nationalized by the Cuban government and owned by U.S. citizens. Under U.S. law, trafficking is broadly defined and includes possession. The museum exhibited two paintings by Spanish artists that were owed by the Florida-based Fanjul family before they fled Cuba and the Castro regime expropriated their vast art collection (see ARIS News, February 25, 2009).
September 14, 2009 - The art of the lawsuit
CRAINS CHICAGO BUSINESS - For over twenty years, numerous clients have sued Chicago-based art historian and dealer Richard Love of R.H. Love Galleries for mishandling their funds and assets including failing to deliver sold paintings, making false representations about art investments and refusing to pay consignors for sold artworks. The most recent lawsuits against Mr. Love were filed in state court in Illinois and involve up to $3 million dollars.
September 13, 2009 - The dealer; the $10m and the missing art treasures
THE OBSERVER - Former leading U.K. antiquities dealer Robin Symes is being sued by his late partner Christo Michailidis's family for allegedly selling without authority a multi-million pound collection of Eileen Gray art deco furniture and other objects. Mr. Symes was convicted and served jail time in 2005 for illegally selling a £3 million pound Egyptian statue.
September 12, 2009 - Stolen art by Warhol is sought in California
THE NEW YORK TIMES - Ten paintings by Andy Warhol from the artist’s “Athlete Series” were stolen from the home of Richard Weisman, a California businessman and art collector. Experts predict that the stolen pictures, which Mr. Weisman tried unsuccessfully to sell in 2007, will be difficult for the thieves to sell because of the iconic nature of the portraits and the insular market for Warhol works.
September 9, 2009 - Spain cannot shake suit over Nazi looted art
THE COURTHOUSE NEWS SERVICE - The United States Court of Appeals for the Ninth Circuit held that the government of Spain cannot claim sovereign immunity in defense of a WWII restitution claim for a painting by Camille Pissarro, which it acquired in 1993 as part of the $327 million dollar acquisition of the art collection of Baron Thyssen-Bornemisza. The appellate panel found that the lower court must determine whether the plaintiff must first seek redress in Spain or Germany before litigating in the United States.
August 26, 2009 - Glaser heirs reject UK spoliation ruling
THE ART NEWSPAPER - The heirs of Curt Glaser are seeking to appeal the U.K. Spoliation Advisory Panel’s recommendation to the Courtauld Gallery not to restitute eight drawings. This is the first time that a party proceeding before the Panel has rejected the Panel’s findings. Given the Glaser heirs’ pending WWII-related art claim, it will be risky for the museum to lend or exhibit these drawings in another jurisdiction.
August 24, 2009 - Aboriginal busts withdrawn from auction
ARTINFO - Sotheby’s withdrew from auction in Melbourne, Australia two Aboriginal busts with a combined pre-sale estimate of over $500,000 U.S. dollars in light of protests by Aboriginal leaders. The leaders urged Sotheby’s and the consignors not to profit from the sale of Aboriginal works and to return the sculptures to the indigenous community
August 19, 2009 - Appeals court overturns Holocaust looted-art law, but Norton Simon suit continues
THE LOS ANGELES TIMES - The United States Court of Appeals for the Ninth Circuit ruled that a California law allowing claimants to sue museums and galleries until 2010 for recovery of Nazi-looted art is unconstitutional. The plaintiff (the heirs of Jacques Goudstikker) may still pursue their restitution case if they can prove that they filed their case within California’s general three-year statute of limitations, that is, within three years after discovering that the Lucas Cranach the Elder painting at issue – valued at $24 million dollars – was in the collection of the Norton Simon Museum.
[ARIS Commentary: California’s special Holocaust statute of limitations, which is one of the state’s four Holocaust-related laws the court struck down on constitutional grounds, highlights the tension between federal laws setting foreign policy for WWII reparations and state laws regulating museum practices and the art market. As a result of this tension, parties can incur substantial legal expense and years of litigation over threshold legal and jurisdictional issues in WWII-related art title disputes.]
August 11, 2009 - Instant art on the auction block
THE WALL STREET JOURNAL - Polaroid Corporation is seeking permission from the U.S. Bankruptcy Court for the District of Minnesota to liquidate the company’s photography collection through Sotheby’s in private and public sales. After filing for Chapter 11 bankruptcy protection in December 2008, the company sold the majority of its assets but excluded from the sale its thousands of iconic photographs, which have not yet been appraised.
August 8, 2009 - A Brancusi masterpiece, mired in a custody fight
THE NEW YORK TIMES - Two brothers, two high-profile art collectors and Romania are involved in litigation in New York, Oslo and Paris over a 1913 Brancusi sculpture worth an estimated $40 million dollars assuming clear legal title. Since 1976 when the work was exhibited at the National Museum of Art of Romania, the government of Romania has claimed title to the statue as a national treasure. Brothers Alexandru and Alvaro Botez, whose grandparents acquired the work in 1914 from the artist, allegedly agreed to sell the work in 2005 to Norwegian businessman Mr. Sveaas and then in 2007 to Studio Capital, a Belize company owned by Mexican financier Mr. Martinez. The current location of the sculpture is unknown.
August 5, 2009 - Leibovitz may have better luck in bankruptcy court
BLOOMBERG - In light of photographer Annie Leibovitz's financial challenges, which include a pending $24 million dollar breach of contract lawsuit brought by an art lender and a federal tax lien of over $1 million dollars (see ARIS News, July 30, 2009, February 24, 2009), legal experts suggest that Ms. Leibovitz should file for bankruptcy to preserve her assets and to satisfy her creditors' liens.
July 30, 2009 - Lender sues Annie Leibovitz
THE NEW YORK TIMES - Art Capital Group, Inc., a specialized art finance company, has sued photographer Annie Leibovitz in Supreme Court of the State of New York for breach of a $24 million dollar loan agreement (see ARIS News, February 24, 2009). According to the lender, pursuant to the parties’ agreement in exchange for the credit line the lender obtained the right to sell Ms. Leibovitz’s right, title and interest to all of her photographs as well as her two homes. The lender is seeking a declaratory judgment to compel Ms. Leibovitz to provide access to her homes to appraise and value her assets.
July 22, 2009 - Auction-house partnership going, going, gone
CANWEST NEWS SERVICE - Sotheby’s has terminated its seven-year auctioning partnership with Canada-based Ritchies due to a number of instances of Ritchies not timely paying its consignors following a Sotheby’s-Ritchies joint sale in May. With the association scheduled to renew on August 1, 2009, Sotheby’s commented that “failing to promptly pay consignors after a sale is a ‘cardinal sin’ in the auction business . . . and Sotheby’s [will not] renew this agreement.” Sotheby’s has assured payment to the consignors who have not yet been paid.
[ARIS Commentary: The Ritchies incident highlights the continuing economic pressures in the art market. The incidence of consignors not being paid and the title exposures to the buying and selling market had been most evident to date in the private sector. See ARIS News and Commentary May 7, 2009 (discussing then-latest lawsuit stemming from the bankruptcy of Lawrence Salander and the Salander-O’Reilly Galleries brought by defrauded consignor John McEnroe and others against downstream buyers); see also ARIS News and Commentary November 20, 2008 (“Jail sentence for Memphis antique gallery owner who cheated consignors”) and ARIS News July 15, 2009 (updating new charges in the Salander-O’Reilly Galleries matter).]July 15, 2009 - Art dealer Salander faces new charges as former deputy arrested
BLOOMBERG - The New York County District Attorney’s Office filed additional charges against Lawrence Salander and the now defunct Salander-O’Reilly Galleries as well as new charges against Leigh Morse, the gallery’s former director, for her role in defrauding investors, consignors and artists (see ARIS News, May 7, 2009, March 27, 2009, March 15, 2009, February 10, 2009, November 19, 2007, November 6, 2007 and November 5, 2007). The criminal indictments name twenty-eight victims including the artist estates of Gaston Lachaise, Elie Nadelman and Robert de Niro Sr. in what has been called the largest art fraud case in New York City’s history. District Attorney Robert Morgenthau noted that “the moral of this case is, be careful who you consign your artwork to.”
July 15, 2009 - Court removes an obstacle for Fisk University in struggle over Stieglitz art sale
THE NEW YORK TIMES - The Court of Appeals of Tennessee held that the Georgia O’Keefe Museum lacks standing to prevent Fisk University from selling artworks donated by Ms. O’Keefe. Over fifty years ago, Ms. O’Keefe donated the ninety-seven-piece Alfred Stieglitz Collection plus four of her own paintings to the university, stipulating various conditions including that the works could not be sold and must be displayed together. The museum alleged that because the proposed sale violated Ms. O’Keefe’s gift conditions, ownership of the collection should revert to the museum as the successor in interest to the O’Keefe estate.
[ARIS Commentary: If the Georgia O’Keefe Museum decides not to appeal, the lower Tennessee state court must decide on remand whether to permit Fisk University to sell a 50% stake in the O’Keefe-Stieglitz art collection for $30 million to the Crystal Bridges Museum. The on-going litigation involving Fisk University demonstrates the multitude of practical and legal challenges in enforcing donors’ restrictions on gifted artworks as well as the deaccessioning dilemma facing institutions that lack liquidity but own valuable art assets.]July 10, 2009 - Red faces in Paris as ‘destroyed’ Cartier-Bresson snaps resurface
THE INDEPENDENT - The widow of French photographer Henri Cartier-Bresson is warning sellers and buyers that several prints donated to the French government that were supposed to have been destroyed in 1991 have reappeared on the art market. The prints were part of a collection of over five-hundred images damaged by a flood while being stored by the Centre National des Arts Contemporain. Rather than being destroyed by the museum according to the photographer’s instructions, some or all of these prints may have been stolen or recovered from the trash.
July 8, 2009 - Nazi-era claim rejected in court
ARTINFO - The United States District Court for the Eastern District of Louisiana granted summary judgment for Sarah Blodgett Dunbar, ruling that she was the owner of an Oskar Kokoschka painting that she inherited in 1973 from her mother, who purchased the work in 1946 from the art dealer Otto Kallir. The heir of Oskar Reichel sought restitution of the painting claiming that the Nazis confiscated it in 1939 when the painting was consigned to Mr. Kallir (see ARIS News, May 30, 2009, January 24, 2008). Following Louisiana’s Civil Code provisions, the court held that even if the work had been stolen or sold under duress during WWII, Ms. Dunbar acquired clear legal title because of her open and continuous possession of the painting for more than ten years.
[ARIS Commentary: Louisiana is unique among U.S. jurisdictions in its adoption of a civil code containing a prescriptive ownership period similar to European jurisdictions such as France, Germany and Switzerland in which a party may acquire clear legal title to stolen art if the party has maintained unchallenged possession of the work for a certain period of time (even if the transferor did not have clear legal title). The general rule in other United States jurisdictions is that a thief cannot obtain clear legal title to stolen art and for this reason good faith purchasers and other downstream parties cannot obtain clear legal title to the work regardless of how long these parties have possessed the artwork.]
July 7, 2009 - Judge denies Jackson’s mother
THE WALL STREET JOURNAL - A California state court judge named a lawyer and record executive listed in Mr. Jackson’s will as temporary special administrators of the estate until an August hearing, when the court is expected to appoint permanent executors and rule on the validity of the will. Mr. Jackson’s estate consists of millions of dollars in assets and debts (see ARIS News, June 28, 2009).
[ARIS Commentary: It may be challenging for executors to the Jackson estate to manage their fiduciary duty and sell the art and other property in the Jackson estate to pay off creditor debts. Executors will most likely have to sign a full warranty of clear legal title to offered assets (even though they may lack knowledge, information and documentation about potential liens encumbering Mr. Jackson’s property). If any objects are sold with an unknown title defect such as a creditor lien, then the sales transaction may be unwound at any time in the future – even after the estate is settled – based on rescission of a public auction or an indemnity claim brought by a buyer in a private sale, creating uncertainty and lack of finality to the estate proceedings.]
See also “Jackson worth $100M more than he owed?”
The Seattle Times, July 6, 2009.
July 1, 2009 - Merkin art to be sold as hedge in Madoff case
THE WALL STREET JOURNAL - J. Ezra Merkin, a hedge fund manager charged with concealing over $2 billion dollars worth of client investments with Bernard Madoff, has negotiated the sale of several Rothko paintings and Giacometti sculptures for $310 million to an unidentified buyer (see ARIS News, April 14, 2009, January 8, 2009). Mr. Merkin highly leveraged his art collection; PaceWildenstein art gallery, which represents the Rothko family, has a $42 million lien on several of Mr. Merkin’s Rothko paintings and HSBC Bank USA, N.A. has a $19.3 million lien on several of Mr. Merkin’s other artworks. New York Attorney General Andrew Cuomo approved this sale of Mr. Merkin’s art assets, which are already the subject of a freezing order, provided that after paying liens, commissions, taxes and other fees the remaining $192 million sales proceeds are held in escrow for potential restitution of defrauded investors.
See also “Merkin selling art frozen in lawsuit for $310 million,”
Bloomberg, June 30, 2009.
June 29, 2009 - Czech institute to help recover Jewish property
REUTERS - Nearly fifty countries and non-governmental organizations participating in the Prague Holocaust Era Assets Conference have agreed to improve efforts to return artwork and other property looted by the Nazis and to form a permanent standing committee based in Terezin, Czech Republic to monitor WWII restitution claims.
See also “Holocaust conference urges more efforts on looted art,”
Bloomberg, June 29, 2009.
June 28, 2009 - Michael Jackson’s estate: The fallout will be monumental
USA TODAY - Legal experts expect it to take years to settle the estate of Michael Jackson given the complicated task of assessing the value of Mr. Jackson’s estate which includes various expensive artworks, and the amount of outstanding debts owed to creditors as well as an estimated $80 million in estate taxes owed to the state and federal government.
[ARIS Commentary: Given the complexities surrounding the Michael Jackson estate, it may be difficult to determine whether legal title to the estate’s assets are affected by loan pledges, gift promises to beneficiaries or other creditor rights. In addition, property in the estate may become subject to bankruptcy protection. It will be particularly challenging to value Mr. Jackson’s art and memorabilia assets since unlike all other asset classes in which uncertain title adversely affects property value, art appraisers have traditionally assumed (without inquiry) that the artworks they are valuing have clear legal title. The Michael Jackson estate may well have a proper basis to seek lower values of the art assets for estate tax purposes based on the difficult-to-determine risks of liens and encumbrances; however, this may also impact the estate’s ability to sell these assets at fair market value.]
See also “Large tax bill looms for Jackson estate,”
MSNBC, July 10, 2009.
June 25, 2009 - Art insurance: Clean as a Rockwell
MARTINDALE - Collectors and investors of art are advised to consider acquiring title insurance for their potentially "defective art." Title insurance protects parties from losing their art due to title claims and spending money on legal fees to defend their art ownership. Parties are increasingly seeking to mitigate the art title risk given the facts that nearly all art has some gap or question in the provenance or chain of title, U.S. jurisprudence does not always favor good faith purchasers, and art market is non-transparent and unregulated, characteristics which can produce a variety of different kinds of title risks.
June 24, 2009 - £1.5m Pissarro painting looted by Nazis withdrawn from auction
TELEGRAPH - Christie's withdrew a Pissarro painting from auction due to a family dispute between two heirs of Samuel Fischer, the original Jewish owner of the painting. The Nazis looted the painting during WWII, and a Swiss court restituted it to Mr. Fischer's granddaughter in 2007; however, Mr. Fischer's great-grandson alleges competing ownership rights to the painting. The heirs failed to agree how to split the proceeds from the sale before the scheduled auction.
[ARIS Commentary: The Fischer case highlights the expanding nature of title risks tied to historical theft such as family disputes after restitution or other settlements and the challenges when art is pulled from auction including negative publicity, non-refundable marketing expenses, potential decrease in value of art and varying but significant collateral effects such as the destruction of a reverse IRC Section 1031 art exchange when the relinquished property is to be auctioned at or near the end of the exchange period.]
June 23, 2009 - Art restitution conference in Prague
THE NEW YORK TIMES - An internationally-attended conference on Holocaust-era assets will be held in Prague, Czech Republic, this week, the purpose of which is to assess efforts to recover looted artwork since the 1998 Washington Conference on Holocaust Era Assets was held and to define new ways to improve provenance research and restitution efforts around the world.
See also “Heirs race to find Nazi-looted art before time runs out,”
The Washington Post, June 22, 2009.
[ARIS Commentary: The Prague conference is likely to renew public interest in and continue to spur WWII-related art ownership claims.]
June 18, 2009 - Debbie Reynolds’ Hollywood museum enters Chapter 11
THE WALL STREET JOURNAL - Debbie Reynolds’ Hollywood Motion Picture Museum, a non-profit corporation owning the largest private collection of Hollywood memorabilia worth an estimated $60 million, has filed for bankruptcy in United States Bankruptcy Court for the Central District of California. The museum leveraged the collection to secure a $1 million loan and is seeking bankruptcy protection to prevent the lender from selling off memorabilia in the collection to satisfy the outstanding debt.
See also “Hollywood memorabilia caught in Olathe man’s legal mess,”
The
Kansas City Star, June 24, 2009.
June 17, 2009 - Mixed fortunes for Judaica in wake of Madoff
THE ART NEWSPAPER - J. Greenstein & Co., Inc.’s Judaica auction sale, which had twice as many lots as usual, included many objects consigned by Jewish victims of Bernard Madoff’s financial Ponzi scheme who are seeking to raise capital (see ARIS News April 20, 2009, April 14, 2009, January 8, 2009). Judaica objects have inherent title risks because such ceremonial items often have no provenance history, are not traceable, are frequently faked or forged, and were looted during WWII from synagogues in Europe. After WWII, many Judaica objects were mistakenly given to new congregations and pillaged congregations are now seeking restitution of their ceremonial objects.
June 14, 2009 - Signed, sealed, delivery: Stamp sold for $375K
INDYSTAR - The estate of J. David Baker sold an 1869 Lincoln stamp for $375,000 after the United States District Court for the Southern District of Indiana held that it was the rightful owner of the stamp, which was stolen from Mr. Baker’s home in 1967. An insurance company and an individual, who allegedly bought the stamp twenty years ago at a flea market, also asserted title to the stamp.
June 11, 2009 - 24 charged in crackdown on Native American artifact looting
LOS ANGELES TIMES - After a two-year investigation, federal and state law enforcement officials have arrested and charged twenty-four people with stealing and trafficking ancient Native American artifacts from federal public and tribal lands located in the Four Corners area in violation of the Archaeological Resources Protection Act (ARPA) and the Native American Graves Protection and Repatriation Act (NAGPRA). This case represents the largest Native American artifact theft case in United States history involving excavators, dealers and collectors and over 200 objects such as pottery, masks and jewelry worth over $300,000.
See also “Arrests made in operation targeting network selling stolen
Native American artifacts,”
Federal Bureau of Investigation, June 10, 2009.
June 9, 2009 - 2 paintings found in Toronto Goodwill bin could fetch $50,000 each
CBC NEWS - Waddington’s auction house in Canada plans to sell two paintings by the 19th century European painter Federico del Campo that were dropped off at a Goodwill facility. Goodwill does not know who donated the works and whether the donor was aware of their attribution or value. The paintings will be sold with no information or documentation about their ownership history.
June 4, 2009 - Ukraine suffered “colossal” looting during World War II
THE ART NEWSPAPER - New research suggests that the Ukraine suffered tremendous, previously unrecorded losses of cultural property during WWII. According to experts, most of the missing artworks are important pieces, many of which may be the subject of restitution claims in the future.
June 4, 2009 - Huge bequest by literary agent
THE ART NEWSPAPER - Over two thousand drawings and other art objects from the estate of Joseph McCrindle were gifted to more than thirty museums in the United States and Europe. The total collection is estimated to be worth approximately $20 million.
[ARIS Commentary: It may be challenging for executors and recipient museums to document the chain of title for art objects in the McCrindle collection given the fact that Mr. McCrindle acquired most of the works in the 1960s and 1970s before the advent of heightened art transactional and due diligence standards. Similarly, in accordance with current Internal Revenue Service auditing trends (see ARIS News, March 2, 2008), the charitable gift tax deduction and appraisal of the McCrindle art collection will likely be scrutinized by the Art Advisory Panel of the Commissioner of Internal Revenue because the works have not been in the public domain for several decades and were acquired before the art industry began to focus on art title risks.]
June 4, 2009 - Attorney in contempt for helping client sell Picasso
COURTHOUSE NEWS SERVICE - The United States Court of Appeals for the Fifth Circuit has upheld a civil contempt order against an attorney who advised his client to sell a Picasso painting, which was subject to a freeze order in a fraud case brought by the Securities and Exchange Commission. The appellate court confirmed that the work was covered by the freeze order because the work was in the defendant’s possession in his home even though the defendant’s mother owned the painting. The painting was sold for over $400,000 to raise cash for the defendant’s living expenses and litigation costs. On remand, the United States District Court for the Northern District of Texas will likely order the painting to be delivered to the receiver, but it is unclear whether the buyer, United Financial Markets, Inc., will receive a refund of the purchase price.
[ARIS Commentary: Attorneys, advisors, and other stakeholders should be aware of the potential for personal liability when selling or advising clients to sell art that may be encumbered by liens such as bankruptcy seizures or freeze orders. Similarly, parties should proceed with caution before signing absolute warranties of clear legal title to consigned works when they lack sufficient personal knowledge and documentation to make such representations accurately or where there is uncertainty in the legal determination bearing on clear title to the offered work.]
June 3, 2009 - Yale sued over Van Gogh painting seized by Soviets
THE WALL STREET JOURNAL - The great-grandson of a Russian industrialist has countersued Yale University in United States District Court of Connecticut to recover Van Gogh’s “The Night Café” (see ARIS News, May 30, 2009, March 24, 2009). The parties disagree over whether seizure of the painting in 1918 amounted to theft and if clear legal title to the painting passed to any subsequent owners including the university.
[ARIS Commentary: Historical theft claims, especially those involving state confiscation of property without compensation, present complicated title risks for downstream owners and buyers because of different interpretations of factual circumstances and unsettled doctrines under United States and international law such as due diligence obligations when acquiring art and whether public exposure of the art impacts when a statute of limitations period begins.]
May 30, 2009 - Massachusetts judge rules in favor of Museum of Fine Arts, Boston regarding Kokoschka work
ART DAILY - The United States District Court of Massachusetts has ruled in a declaratory judgment action brought by the Museum of Fine Arts that the museum is the rightful owner of an Oskar Kokoschka painting, which the heir of the Austrian Jewish owner Oskar Reichel alleged was sold under duress during WWII (see ARIS News, January 24, 2008). The court held that the heir’s restitution claim was barred by a three-year statute of limitations and that Mr. Reichel’s sale of the painting to the art dealer Otto Kallir in 1939 was a voluntary uncoerced transaction.
See also “MFA wins legal claim to valuable painting,”
The Boston Globe, May 30, 2009.
[ARIS Commentary: The Museum of Fine Arts case reflects a growing trend by museums and other non-profit institutions to seek to quiet title to art in their collections by filing declaratory judgment actions, efforts which reduce the risks associated with owning art with uncertain legal title, but require the institutions to expend often limited financial resources on litigation costs that they cannot recover even when successful in the court proceedings. See, e.g., Toledo Museum of Art v. Ullin, 477 F. Supp. 2d 802 (N.D. Ohio 2006); The Detroit Institute of Arts v. Ullin, No. 06-10333, 2007 WL 1016996 (E.D. Mich. Mar. 31, 2007); ARIS News and Commentary March 24, 2009 (discussing lawsuit brought by Yale University to retain ownership of Van Gogh painting).]
May 27, 2009 - Antiques Roadshow painting sale halted after claim it was stolen
NORTHAMPTON CHRONICLE & ECHO - Sotheby’s pulled from a New York auction a Winslow Homer portrait in light of ownership claims that the painting was stolen more than twenty years ago from the Blake family estate in Ireland. Before the sale, Sotheby’s conducted extensive due diligence on the picture, which had been featured on the popular television program Antiques Roadshow, including checks to ensure it was not stolen and contacting members of the Blake family.
[ARIS Commentary: Despite extensive public exposure of a work and due diligence research by an international auction house, unanticipated title risks may still encumber art and as a result the work may be unmarketable until the claim is settled and stakeholders may become entangled in lengthy, expensive litigation.]
May 22, 2009 - Changing the art on the White House walls
THE WALL STREET JOURNAL - President and Mrs. Obama are in the process of redecorating the private residence, offices and public rooms in the White House with modern art created by African-American, Asian, Hispanic and female artists on loan from federal museums as well as private galleries and individual collectors.
[ARIS Commentary: Individuals and galleries loaning their art for public display at the White House for the prestige of being connected to the Obama administration and to increase the market value of a particular artwork should be aware of potential title risks associated with public exposure and exhibiting their art at a high-profile location.]
May 22, 2009 - National Gallery settles suit over Soutine painting
THE WASHINGTON POST - The National Gallery of Art in Washington, D.C., and the estate of Lorette Jolles Shefner have reached an ownership agreement regarding the 2004 sale of a Soutine painting. In its complaint filed in the United States District Court for the Southern District of New York, the estate alleged that two Soutine experts fraudulently induced Mrs. Shefner to sell them her painting for well below fair market value, who in turn immediately resold the work for double the price to the National Gallery of Art, and that the museum conducted little to no due diligence on the ownership history of the work or how the experts acquired the painting. Pursuant to the settlement, the estate will retain title to the painting, the museum will recover the purchase price and the painting will remain on loan at the museum for seven years.
See also “Soutine suit settled over bargain ‘beef,’”
Artinfo, June 1, 2009.
[ARIS Commentary: The Shefner case reflects the continued heightening of due diligence obligations of downstream buyers to investigate clear legal title to artworks outside of the WWII historical theft context. The Soutine painting is the first work that the National Gallery of Art has deaccessioned from its permanent collection on the basis of a non-WWII related title claim. Under the changing industry standards, good faith buyers are charged with having certainty that the seller did not acquire the work under fraudulent circumstances, an issue which is heightened in the current market where buyers are attempting to secure works at below market values, and face the risk of rescission of the transaction, loss of the object as well as loss of the gain in value over time.]
May 21, 2009 - Esmerian property removed from American Folk Art Museum
MAINE ANTIQUE DIGEST - Sotheby’s took possession of several artworks that the renowned jeweler Ralph Esmerian loaned and promised to gift to the American Folk Art Museum. Mr. Esmerian is heavily indebted to the auction house for purchasing art on credit (see ARIS News, May 1, 2008). Sotheby’s has seized approximately $20 million worth of Mr. Esmerian’s art and is involved in litigation with Halsey Minor over the May 2008 sale of Mr. Esmerian’s “Peaceable Kingdom” painting by Edward Hicks for allegedly failing to disclose its financial interest in the painting (see ARIS News, September 3, 2008).
May 18, 2009 - Mogul’s $3 million paddle battle lands bitter bidders in court
BLOOMBERG - A collector has sued Christie’s in United States District Court for the Southern District of New York seeking a declaratory judgment that he was the successful bidder of a Sam Francis painting, which was part of the May 13, 2009 Post-War and Contemporary Art Evening Sale. The collector alleges that he holds legal title to the painting because the auctioneer orally accepted his $3 million telephone bid and then dropped the hammer and that it was improper for the auctioneer to reopen bidding and accept a higher $3.2 million bid from someone in the room.
May 18, 2009 - 2 disputed Indian wampum belts pulled from auction
THE NEW YORK TIMES - Sotheby’s pulled from auction two ceremonial Indian wampum belts consigned by the estate of a private collector in light of ownership claims raised by the Onondaga Nation. Native American Indian leaders allege that the sacred belts, which record the nation’s laws and customs, are community property of the Onondaga Nation and that for this reason a collector cannot acquire the title to or the authority to sell or transfer such objects. Both belts were deaccessioned before 1970 from the collection of the Museum of the American Indian and exhibited at The Metropolitan Museum of Art in 1983.
[ARIS Commentary: Consignors should ensure that they have clear legal title before offering art for sale privately through a dealer or gallery or at public auction. Liens or encumbrances might infringe on the title to offered artworks unbeknownst to the consignor even when the work has been part of a private collection for decades or exhibited at leading museums.]
May 7, 2009 - John McEnroe sues dealer over a Gorky
COURTHOUSE NEWS SERVICE - John McEnroe and Morton Bender have sued art dealer Joseph Carroll in New York state court for conversion, unjust enrichment and restitution in connection with a Gorky painting in which Mr. McEnroe and Mr. Bender each allegedly own a 50% interest through their dealings with Lawrence Salander (see ARIS News, March 27, 2009, March 15, 2009, February 10, 2009, November 19, 2007, November 6, 2007, November 5, 2007). The complaint alleges that Mr. Carroll acquired the painting in sham transactions with Mr. Salander and thus Mr. Carroll did not acquire legal title to it even as a buyer in good faith under the New York Uniform Commercial Code (UCC).
[ARIS Commentary: The latest lawsuit stemming from the bankruptcy of Lawrence Salander and the Salander-O’Reilly Galleries and now brought by both Mr. McEnroe and Mr. Bender illustrates a larger, developing trend in art law jurisprudence in which consignors and collectors who have been outright defrauded or whose consignment agreements have been breached in other ways are suing downstream buyers (or seeking indemnity from property and casualty insurers under all-risk homeowner’s policies under theft or conversion doctrines) for loss of their artwork based on the theory that the UCC provides little to no protection to buyers who should have been aware of improprieties surrounding the art transaction. As different courts begin to struggle with the limits of voidable title doctrines under the UCC, some courts have carved out “red-flag” exceptions to the traditional UCC protections afforded good faith purchasers for example when the sales price was obviously below market value, the negotiations or procedure of the sale were outside industry norm or controversial, or if no or inadequate steps were taken to verify the ownership history. See Zurich American Insurance Co. v. Felipe Grimberg Fine Art, No. 08-1300, 2009 U.S. App. LEXIS 9937 (2d. Cir. May 7, 2009); Brown v. Mitchell-Innes & Nash, Inc., No. 06-7871, 2009 U.S. Dist. LEXIS 35081, at *7-8 (S.D.N.Y. Apr. 24, 2009).]
May 6, 2009 - Dealer returns painting lost in Nazi-era forced sale
BLOOMBERG - Richard Feigen, a leading New York art dealer, has returned an Italian baroque painting from his personal collection to the heirs of Max Stern, a Jewish art dealer who was persecuted during WWII (see discussion of other art restitutions to Stern heirs, ARIS News, April 21, 2009, November 20, 2008). Mr. Feigen purchased the picture in 2000 from Lempertz auction house in Cologne, Germany, the same auction house that liquidated Mr. Stern’s gallery in 1937.
May 4, 2009 - Fremont settles suit over Ansel Adams prints
THE WALL STREET JOURNAL - Fremont General Corporation, a former mortgage lender, has agreed to allow the California Insurance Commissioner to keep $4.1 million in sales proceeds from a 2008 auction of Ansel Adams prints allegedly owned by Fremont Indemnity Company, an insurer which the State of California took control over in 2003. Several months after the auction, Fremont General Corporation filed for bankruptcy protection. The Commissioner argues that Fremont General Corporation did not have title to or the right to sell the Adams works because it improperly acquired possession of the collection from its insolvent subsidiary.
April 28, 2009 - Hart Galleries owners sentenced to 14 years
HOUSTON CHRONICLE - Mr. and Mrs. Hart, the owners of an art and antique gallery in Houston, Texas, pleaded guilty to stealing more than $4 million from their clients. After filing for bankruptcy in 2003, criminal charges were brought against the Harts for failing to pay consignors for their sold objects.
April 27, 2009 - ABN Amro secures Reijtenbagh art collection
NRC HANDELSBLAD - ABN AMRO secured one of the most valuable paintings by Rembrandt in Mr. Reijtenbagh’s art collection, which was used as partial collateral to secure a €52 million loan with ABN AMRO as well as more than $340 million in loans from Credit Suisse and JPMorgan Chase & Co., who both sued Mr. Reijtenbagh in New York state court (see ARIS News, April 22, 2009, April 17, 2009, April 3, 2009). Although ABN AMRO agreed to seek repayment of the rest of Mr. Reijtenbagh’s debt through his non-art assets, Credit Suisse and JPMorgan Chase & Co. continue to seek reimbursement for Mr. Reijtenbagh’s outstanding loans from missing artworks.
[ARIS Commentary: The Reijtenbagh case illustrates how large, global banks are vulnerable to art title risks (from historical and contemporary theft to traditional liens and encumbrances) when borrowers use their art as security for loan transactions. Bank auditors and loan risk managers should be cognizant of the fiduciary duty to recognize exposure to art title risks. ARIS expects to see increasingly stringent risk management requirements surrounding the global art title risk within financial institutions and from outside auditors both when banks use art as loan collateral and set reserves for these loans and when banks value their own corporate art collections for balance sheet purposes.]
April 26, 2009 - Gideon Welles’ heirs battle over Lincoln artifacts
HARTFORD COURANT - The Welles, Brainard and Smith branches of the family of Gideon Welles, Secretary of the Navy under President Lincoln during the Civil War, are suing each other in Connecticut state court over ownership of historical documents and artifacts discovered in an attic in 2004. In addition, two boxes containing valuable Welles papers were stolen in 2006 and are still missing. The United States National Archives and Records Administration has indicated that the U.S. government will claim title to the official government letters from President Lincoln to Secretary Welles if the stolen papers are found.
April 25, 2009 - More artworks sell in private in slowdown
THE NEW YORK TIMES - Many collectors are choosing to sell their art in private sales to maintain their anonymity (and keep confidential what may be their financial need), to prevent the uncertainty surrounding auction sales and to meet liquidity needs more quickly.
[ARIS Commentary: There has been a systemic shift in the art marketplace with more art being sold in private sales and less art being sold in public auction sales. This change – driven by distressed sellers, who have seen the value of their real estate, stock and other investment holdings collapse – has augmented the lack of transparency in the art market and correspondingly increased buyers’ title risk exposure.]
April 22, 2009 - De Young selling tribal art as family squabbles
SAN FRANCISCO CHRONICLE - As part of the on-going Annenberg family dispute that is the subject of
several court cases in California, Florida and New York (see ARIS News, October
6, 2008), the city of San Francisco and the de Young Museum of Fine Arts have
agreed to sell 76 works from the Jolika Collection of Papua New Guinea art,
which was gifted to the museum by Mr. and Mrs. John Friede, one of the Annenberg
heirs. Proceeds from the sale are earmarked to settle
a portion of the inheritance dispute. Mr. Friede’s half-brother, Thomas Jaffe, however,
opposes the sale of the 76 works as well as the sale of a $10 million Bonnard
painting jointly owned by the heirs.
See also “San Francisco fights to protect Jolika collection,”
Artinfo, April 22, 2009.
April 22, 2009 - Dutch bank challenges JPMorgan, Rijksmuseum over masterpiece
MSN NEWS - ABN AMRO has sued businessman Louis Reijtenbagh in a district court in
Amsterdam to secure Mr. Reijtenbagh’s art collection, which was used as loan
collateral. Mr. Reijtenbagh has allegedly double-pledged his art collection to
both ABN AMRO and JPMorgan Chase & Co. (the latter of which has sued him in the
United States District Court for the Southern District of New York) and has sold
a Dutch Old Master painting to the Rijksmuseum, which had been used as loan
collateral (see ARIS News, April 17, 2009, April 3, 2009).
See also “ABN AMRO joins race for Reijtenbagh art-source,”
Reuters, April 23, 2009.
April 21, 2009 - U.S. seizes Old Master lost in Nazi-era forced sale
BLOOMBERG - United States Immigration and Customs Enforcement seized a 17th century Dutch portrait from a New York gallery and returned it to the estate of Max Stern, a Jewish art dealer persecuted by the Nazis. The seizure marks the first time that law enforcement authorities have seized a WWII Nazi-Era work based on a forced auction sale and follows the ruling in the United States Court of Appeals for the First Circuit (see ARIS News, November 20, 2008) that WWII Nazi-Era forced sales constitute an illegal taking. Although registered in the Art Loss Register database, the work was not identified as stolen. It is unclear whether the London dealer, who sold the work to the New York gallery, will be reimbursed by the prior seller.
April 20, 2009 - Two judges on Madoff case may spur assets battle, lawyer says
BLOOMBERG - The federal judges presiding over Bernard Madoff’s criminal and bankruptcy cases may have divergent approaches to handling Mr. Madoff’s assets including his art collection (see ARIS News, April 14, 2009, January 8, 2009, January 2, 2009). The United States District judge presiding over the criminal case has temporarily frozen more than $100 million of Madoff’s assets. The United States Bankruptcy Court judge has appointed a trustee to manage the collection and distribution of Madoff’s assets to Ponzi scheme victims.
April 20, 2009 - Christie’s sets up corporate sales division
ARTINFO - Christie’s has created a division to assist corporations facing mergers, bankruptcies and insolvency with selling their art collections. The auction house expects sales of corporate art to accelerate in the coming year due to the financial downturn.
[ARIS Commentary: Christie’s new division focused on the sale of insolvent corporations’ art collections and the legal wrangling over dispersal of the Madoff art assets exemplifies the increasing incidence and significance of distressed sellers introducing art into the marketplace. The Madoff criminal and bankruptcy cases also highlight a potential conflict between treating title to artwork purchased with criminally misappropriated client funds as void and bankruptcy court-authorized sale of debtors’ art assets to satisfy creditor claims. In addition to this potential conflict, title defects may predate the debtor’s purchase of artworks and impair clear title despite a bankruptcy court-approved liquidation sale of the work.]
April 17, 2009 - JPMorgan Chase claims rights to Rijksmuseum-owned painting
ARTINFO - JPMorgan Chase & Co. has asserted a financial interest in a 17th century painting by the Dutch master Berckheyde, which was used as loan collateral by defaulting-borrower, Dutch businessman Louis Reijtenbagh (see ARIS News, April 3, 2009). The Rijksmuseum acquired the painting from Mr. Reijtenbagh in September 2008 in what it alleges was a legal sales transaction for full value. The picture is currently on loan to the National Gallery in Washington, D.C.
[ARIS Commentary: The Rijksmuseum’s acquisition of the Berckheyde painting aptly shows how the lack of transparency in the art market adversely affects even world-class cultural institutions. The museum most likely had no knowledge when it purchased the work that Mr. Reijtenbagh, a well-respected financier, had pledged the work as collateral and that it was encumbered by JPMorgan Chase & Co.’s creditor lien. Since the painting is currently on loan to a museum in the United States, if the bank files suit in a United States federal or state court, it will likely ask that the work be seized and the museum prevented from taking the work back to the Netherlands until the ownership dispute is resolved.]
April 16, 2009 - Art dealer claims he was swindled
COURTHOUSE NEWS SERVICE - A Beverly Hills art dealer has sued the seller of a stolen Granville Redmond painting for fraud in United States District Court for the Central District of California. Before buying the work, the dealer attempted to verify that the painting was not stolen by checking with law enforcement authorities and stolen art databases and hired a private investigator. Los Angeles police subsequently seized the picture from the down-stream purchaser.
See also “Stolen painting leads to lawsuit,”
Maine Antique Digest, June 16, 2009.
[ARIS Commentary: The lack of transparency in the art market affects not only individual collectors but also commercial dealers and galleries who buy and sell art as inventory and who, as transaction principals, regularly do not have access to complete or accurate information about prior owners and the provenance history of works given the nature of the art industry. Contemporary art theft (one of many global art title risks) is a $6-billion-a-year industry on the rise, with a significant number of art thefts going unreported to law enforcement authorities and stolen art databases.]
April 14, 2009 - Rothko collector charged in Madoff scandal
ARTINFO - The New York Attorney General has charged Ezra Merkin, an investor and art collector, with fraud for concealing investment of $2.4 billion of his clients’ money with Bernard Madoff. Since 2003 Mr. Merkin has assembled an important collection of Mark Rothko works valued today at $91 million (see ARIS News, January 8, 2009).
See also “Madoff middleman Ezra Merkin charged with fraud for secretly
steering $2.4 billion in investor assets into Madoff’s Ponzi scheme,”
State of New York, Office of the Attorney General, April 6, 2009.
[ARIS Commentary: Fraud charges brought against Mr. Merkin are another example of a financial scam involving a collector with art holdings (in this case valuable, well-known Rothko paintings) encumbered by creditor liens and subject to potential government liens or seizure. Future buyers of Rothko works seeking to take advantage of lower prices from distressed sales and the dip in the art market should be aware of title risks related to Rothko works.]
April 13, 2009 - MOMA sued over German works
THE NEW YORK TIMES - The Museum of Modern Art (MOMA) is being sued by the heirs of the German expressionist artist George Grosz in New York federal district court for restitution of three Grosz works. The complaint alleges that MOMA knew or should have known that the histories of the works trace back to several “sham transactions” involving the estate of the artist’s Jewish art dealer as well as Dutch and German art dealers who laundered art stolen during WWII. MOMA has not presently commented on the pending litigation.
See also “George Grosz’s heirs sue MOMA on paintings,”
Courthouse News Service, April 13, 2009.
April 9, 2009 - Colorado investment manager accused in Ponzi case
USA TODAY - The Securities and Exchange Commission has charged Shawn Merriman, a Colorado investment fund manager, with defrauding clients of $20 million in a Ponzi scheme. Mr. Merriman allegedly used investor funds to purchase nearly 200 artworks by Old Masters such as Rembrandt and Rubens as well as similar collectibles including a vintage automobile and sports memorabilia. Government officials have seized Mr. Merriman’s art collection and $7 million of his assets.
See also “Local money manager faces Ponzi-scheme allegations,”
Denver Post, April 9, 2009.
[ARIS Commentary: The Merriman Ponzi scheme, although on a smaller scale than the Madoff Ponzi scheme (see ARIS News, January 8, 2009), is equally devastating to victimized investors and one of the many financial frauds to come to light in recent months having an impact on the art market. Fraudsters such as Mr. Merriman and Mr. Madoff often used misappropriated client funds to acquire valuable artworks and in turn have created complicated liens and encumbrances on millions of dollars worth of artworks that have since entered or that will eventually enter the art market.]
April 3, 2009 - JPMorgan sues Dutch investor Reijtenbagh over loan
REUTERS - JPMorgan Chase & Co. sued the wealthy Dutch Reijtenbagh family in New York state court seeking a temporary restraining order to enforce its rights to valuable artworks by artists such as Monet, Picasso and Rembrandt used as collateral on a $50 million loan. The bank claims that Reijtenbagh breached the loan agreement by transferring artworks without authorization from the defendant’s apartment in New York to outside of the United States.
[ARIS Commentary: Given the current financial environment, it is increasingly common for individual collectors and corporate or nonprofit entities to use their art as collateral and security to obtain loans (see ARIS News, February 24, 2009). As borrowers – like the Reijtenbagh family in the JPMorgan Chase & Co. case – who have possession of their art used as loan collateral default on their commitments and transfer or sell their art in breach of loan agreements, ARIS predicts there will be an influx of art with undisclosed creditor liens in the market and down-stream, good faith buyers will increasingly and unwittingly acquire artworks encumbered by bank claims.]
March 27, 2009 - Art dealer is charged with stealing $88 million
THE NEW YORK TIMES - Former top New York art dealer Lawrence Salander was arrested and indicted for stealing up to $100 million from collectors, artists and investors. Mr. Salander’s alleged fraudulent behavior includes selling the same art (to which he lacked title) multiple times and double-pledging art as loan collateral, failing to reimburse consignors for sold art, and defrauding art investors, with the implicated artworks spanning from Renaissance Old Masters to 20th Century American works. Mr. Salander and his defunct gallery have been protected by bankruptcy proceedings since November 2007.
See also “New York County District Attorney’s Office, News Release,”
March 26, 2009.
[ARIS Commentary: The Salander-O’Reilly Galleries matter highlights that $88 million to $100 million worth of inventory in the art market, which ties back to Mr. Salander’s and the Salander-O’Reilly Galleries’ activity over a fifteen year period, presents risks of title claims. The financial and reputation-related risks to good faith buyers who purchase works unknowingly tied to Salander-O’Reilly Galleries is heightened when one recognizes the long-standing art industry practice of sellers, through their art advisors, dealers and other agents, withholding their identity from buyers and the cumulative effect of this practice on clear legal title to subsequent buyers.]
March 27, 2009 - A tug of war over Robert Motherwell
THE NEW YORK TIMES - Competing lawsuits were filed in the Supreme Court of the State of New York and the U.S. District Court for the Southern District of New York between the Dedalus Foundation, which protects the legacy of the artist Robert Motherwell, and Joan Banach, former Foundation curator, collection manager and board member. The Foundation alleges that Ms. Banach stole at least 10 works (some of which she sold without authority and some of which she still has in her possession) and is seeking return of the Motherwell works as well as $5 million in compensation plus punitive damages. Ms. Banach alleges that the Foundation unjustly terminated her because she challenged the Foundation President’s judgment about the authenticity of works attributed to Motherwell and is seeking reinstatement of her Foundation position as well as an undetermined amount of monetary damages.
March 24, 2009 - Yale sues to retain ownership of Van Gogh painting
THE NEW YORK TIMES - Yale University has filed a declaratory judgment action in U.S. District Court in Connecticut to quiet title to Van Gogh’s “The Night Café” and to block the heir of the Russian industrialist Ivan Morozov from reclaiming the artwork. The painting was seized during the Communist Revolution and later sold by the Soviet government before being donated to the University by an alumnus almost fifty years ago.
See also “Russian aristocrat’s heir reclaims Van Gogh painting ‘looted’ by
Lenin,”
Telegraph, May 28, 2009.
[ARIS Commentary: The Yale University lawsuit reflects a number of recent trends in art title cases and increasing burdens on museums and other non-profit
institutions, who when discovering artworks in their collections with title defects are seeking more control over the dispute through filing preemptive legal actions to remove clouds over ownership (see ARIS News, February 28, 2008, January 24, 2008, December 7, 2007). In recent years, historical repatriation claims have grown beyond the WWII context to include title claims based on other historical events such as WWI, the Russian Revolution, the Cuban Revolution (see ARIS News, February 25, 2009) and the
Chinese Opium Wars (see ARIS News, March 3, 2009). These cases reflect a growing
global attitudinal shift and increase in title risk exposure for art around the world, are adding to the fiscal pressures on museums and other non-profit entities, and require complex risk-management decisions to be undertaken by management and trustees since the next generation of historical restitution
claims include unsettled international law issues involving reciprocity of state actions and the application of different government’s laws on property, forum non conveniens, choice of law and statutes of limitations.]
March 24, 2009 - New York court orders return of $600,000 book stolen in WWII
BLOOMBERG - The U.S. Southern District Court of New York has ordered a collector to return a 16th century book worth an estimated $600,000 to the German Stuttgart Staatsgalerie. The book, which was taken by a U.S. army captain from Germany during the end of WWII, was purchased for $3,800 in good faith eight years ago from an art dealer in St. Louis, Missouri.
March 24, 2009 - Museum sued for return of rare stone tablet
COURTHOUSE NEWS SERVICE - Edward Low is suing the Ohio Historical Society Museum in Ohio state court for conversion of a rare stone plate, which he found in the ground in West Virginia in 1942. The museum has had physical possession of the tablet since 1971. At issue is whether the plate was gifted to the museum or loaned for research and public display purposes.
[ARIS Commentary: In light of the current debate over the practice of deaccessioning artworks from museum collections (as evidenced by the controversies surrounding the National Academy Museum and the Rose Art Museum (see ARIS News, January 27, 2009)), as well as the long-term fiscal challenges facing museums, the issue of lender and donor restrictions has become increasingly important for non-profit institutions. Museums should be cognizant of title risks and potential claims connected to artworks donated and loaned, especially where there is no documentation of the gift or loan, the gifting documentation is vague or contains burdensome provisions, the loan agreement is for an indefinite period or the artwork is “abandoned” or the subject of “stale loans” where donors and lenders cannot be indentified or located.]
March 19, 2009 - Theft claim halts sale of Zoffany portrait from Versace’s Como villa
THE TIMES - A Johann Zoffany painting in the collection of the late fashion designer Gianni Versace was allegedly stolen 30 years ago unbeknownst to Mr. Versace. Heirs of Major George Maule, who is depicted in the portrait, identified the work from an article publicizing the Sotheby’s London auction. The picture, which had been in Versace’s collection since around 1994, was recently attributed to Zoffany and was not listed in any stolen art databases.
March 15, 2009 - Who owns Arshile Gorky pirate painting?
COURTHOUSE NEWS SERVICE - Morton Bender has filed suit in New York federal court to reclaim his 50% ownership stake in a Gorky painting, as well as monetary damages for conversion and unjust enrichment. Mr. Bender alleges that without his knowledge or consent Joseph Carroll entered into sham sales transactions with Mr. Salander, who owned the other 50% in the work. Edelman Arts, who currently has possession of the Gorky painting, displayed it for sale at the March 2009 Armory Show in New York. It is not known how and when Edelman Arts acquired the painting.
[ARIS Commentary: ARIS predicts that in the coming months and years there will be more litigation against innocent down-stream buyers, who unknowingly acquire artwork with financially-related liens and encumbrances (see ARIS News, February 10, 2009). Edelman Arts, who may or may not have known about Mr. Bender’s alleged 50% interest in the work, intended to sell the Gorky work at the Armory Show.]
March 13, 2009 - Mary Boone sues collector
ARTINFO - Mary Boone Gallery is suing an Ohio collector in New York state court for failing to pay for a work by Will Cotton. The collector allegedly agreed to purchase the work for the discounted price of $32,000 but later tried to cancel the transaction.
[ARIS Commentary: It is not uncommon for buyers to renege on payment of their art purchases after the sale. This occurrence has increased as the financial global downturn has impacted even the wealthiest art buyers. For instance, Sotheby’s sued Halsey Minor for non-payment of three paintings worth $16.8 million (see ARIS News, September 3, 2008). It is, however, unusual for private art dealers and galleries to sue their clients for failing to pay for purchased artworks. Litigation is generally considered a last resort if extended payment terms, exchanges or discounts are not viable options. When buyers default in their payment of artwork, title to the work becomes clouded and uncertain unless and until resolution can be achieved through litigation, settlement negotiations or some other means.]
March 3, 2009 - Bidder refuses to pay, stating protest of looting
THE WALL STREET JOURNAL - The winning bidder of two animal fountainheads allegedly looted from China in
1860 has refused to pay for the works as a form of political protest. The
statues sold for €31.4 million at Christie’s Paris auction of designer Yves
Saint Laurent’s art collection. The Tribunal de Grande Instance in Paris denied
a Chinese foundation’s request to stop the sale in light of its repatriation
claim and ordered the group to compensate the defendants for their legal fees.
Christie’s, who engaged in discussions with the Chinese for many months but
stated that the legal ownership of the fountainheads was clearly confirmed, has
not indicated whether it will sue the bidder for payment, return the works to
the consignor, or offer the works to another buyer most likely at a discounted
price.
[ARIS Commentary: As one art dealer noted, the Chinese animal head case
brings to the forefront the notion that has been brewing for some time in the
art market, that is that people are more sensitive to issues of provenance and
that if a work lacks pedigree, it cannot be sold and there will be problems.
Despite the French court ruling allowing the sale to proceed and the protest bid
made by the Chinese patriot, China has vowed to continue to seek the return of
the sculptures through all necessary channels including litigation and
diplomatic relations. This case presents continuing, difficult political, moral
and legal questions under international and various state laws. It will likely
involve protracted litigation and expensive defense costs irrespective of the
validity of arguments countering China’s title claim to the sculptures, i.e.,
that any applicable international cultural property conventions do not apply
retroactively or that the statute of limitations has passed over 100 years after
the looting.]
See also “China-art sales may drop as bidder refuses to pay,”
Bloomberg, March 3, 2009.
March 2, 2009 - Gagosian Gallery and Chris Burden hit legal obstacle in launch of glittery show
LOS ANGELES TIMES - The Gagosian Gallery entered into an agreement with Stanford Coins & Bullion, a company owned by the alleged fraudster Allen Stanford, to purchase $3 million worth of gold bars through Dillon Gage Group, a rare coin dealer. The gold blocks were to be shown in an upcoming exhibit at Gagosian Gallery’s Beverly Hills showroom; however, as a result of a temporary restraining order freezing Mr. Stanford’s assets obtained by the Securities and Exchange Commission (SEC) in U.S. District Court for the Northern District of Texas, Dillon Gage Group has not sent the Gagosian Gallery the gold bars or refunded the $3 million purchase price.
February 25, 2009 - Fanjul family statement on U.S. Department of State investigation against Bruno Scaioli
THE EARTH TIMES - The U.S. State Department is investigating whether Bruno Scaioli, an Italian-Argentinean art dealer, has violated Cuban sanctions legislation, which bars individuals from trafficking in property confiscated by the Castro regime. The Fanjul family, whose art was seized by the Cuban government after they fled the country in 1961, believes that Mr. Scaioli has at least one of their paintings.
[ARIS Commentary: ARIS predicts that in the coming months and years there will be an increase in historical theft claims related to artworks seized by the Fidel Castro regime after 1959 and sold by the Cuban government on the international art market to raise state funds.]
February 25, 2009 - Huillier indicted and arrested in Scottsdale
MAINE ANTIQUE DIGEST - Robert Huillier, an antique appraiser based in Scottsdale, Arizona, has been indicted and arrested on fraud and theft felony charges for allegedly defrauding approximately 70 individuals out of $2.5 million in cash and property. Victims have reported that Mr. Huillier failed to return consigned property, pay proceeds from the sale of consigned property and reimburse funds invested in antiques and other estate property.
February 24, 2009 - That Old Master? It’s at the pawnshop
THE NEW YORK TIMES - Owners of valuable artworks are increasingly leveraging their art as collateral to secure cash. A number of lenders specializing in high-end art loans have seen their business grow by approximately 40% in the last six months. Loans against art are typically based on a proportion of the art’s valuation with interest rates ranging from 6% to 16%. If the owner defaults on the loan, the lender typically asserts the right to sell the art and collect the proceeds, which can often result in title claims and litigation.
[ARIS Commentary: With more collectors, galleries and artists facing financial challenges and using their art as collateral to obtain much needed cash, buyers should be aware of the risk of inadvertently purchasing art encumbered by creditor liens. Not all lenders maintain physical control and possession of art used as collateral for loans. Moreover, lenders and owners often dispute the term arrangements in their loan agreement. Despite apparent title risks to buyers, owners and lenders, experts predict that there is a real and growing need for art loans in the market.]
February 10, 2009 - Stuart Davis’ son wants Dad’s paintings back
COURTHOUSE NEWS SERVICE - The son of American modernist painter Stuart Davis has sued Joseph P. Carroll, the buyer of 16 of his father’s paintings, in New York Southern District Court for conversion, replevin and unjust enrichment, and is seeking $3 million in damages and return of 8 of the pictures. Mr. Davis alleges that Mr. Carroll knowingly illegally acquired Davis paintings that were on consignment with Salander-O’Reilly Galleries at prices far below fair market value around the time that the gallery was near financial collapse. Mr. Carroll may have already resold the Davis paintings at issue in the lawsuit.
[ARIS Commentary: This is the first widely reported case stemming from the Salander-O’Reilly Galleries bankruptcy in which a consignor is seeking redress from a down-stream buyer after not being paid by the gallery for the purported sale of consigned works.]
February 10, 2009 - Collector says dealer snookered her for a Julian Schnabel painting
COURTHOUSE NEWS SERVICE - A private collector is suing art dealer Mary Dinaburg in New York Southern District Court for fraud, negligent misrepresentation and unjust enrichment, and is seeking compensatory and punitive damages. The collector alleges that Ms. Dinaburg sold her a John Wesley painting for $118,000 and then converted it by reselling it the next day without her approval. Although the collector contends that the resale of the Wesley work was illegal, she accepted from Ms. Dinaburg a $200,000 credit. The collector contends that Ms. Dinaburg induced her to purchase for $290,000 (using the credit plus a cash advance) a Julian Schnabel painting, which is only worth around $100,000.
January 27, 2009 - Brandeis to close art museum, sell Warhol as endowment slips
BLOOMBERG - In light of the financial crisis and economic recession, Brandeis University is closing its Rose Art Museum and selling over 6,000 works in its collection. Most of the collection was donated and consists of contemporary American works by artists such as Jasper Johns and Andy Warhol. The university is taking this unusual step as part of larger cost-cutting initiatives to preserve its educational mission.
January 22, 2009 - Art worth millions confiscated from Australian dealer
ARTINFO - For several months, investors and consignors have unsuccessfully sought to recover money for their sold artworks from Sydney art dealer Ronald Cole. As a result, Australian police raided and seized over 400 paintings worth millions of dollars from Mr. Cole's gallery and private properties. Like many other art dealers, Mr. Cole noted that he is suffering from financial problems in a difficult market.
January 15, 2009 - Auctioneer arrested, felony charges filed at state level
MAINE ANTIQUE DIGEST - Over 80 former clients have filed complaints against auctioneer Timothy W. Conroy for failing to return unsold consigned works and failing to pay sales proceeds. The Attorney General for the State of New York has instituted criminal proceedings against Mr. Conroy for felony grand larceny and breach of a stipulation to pay debts owed to consignors now estimated at over $400,000. Convictions for charges against Mr. Conroy pending in the courts in both Onondaga and Cayuga Counties carry up to seven years in state prison and authorize local authorities to shut down Mr. Conroy's auction business.
See also "Consignors say Conroy owes them money,"
Antique Week, December 12, 2008.
January 8, 2009 - Wary art dealers, collectors swap galleries for cheap storage
BLOOMBERG - Individual collectors, galleries, dealers, museums and other businesses with art holdings are downsizing and cutting costs by storing their art in specially designed warehouse facilities, which charge rent according to square footage. Several art and antiques storage companies have recently expanded and are benefitting from the recession.
[ARIS Commentary: Parties storing their art in warehouse facilities should be aware that art handlers and storage companies may obtain a lien and seize their art pursuant to UCC or state law (after following statutory notice requirements) to satisfy outstanding fees. Warehouse liens will become more prevalent as individuals and entities who had previously sought to reduce expenses by storing their art become insolvent and unable to pay their bills. Buyers should be cognizant of potential title claims brought by parties whose artwork was previously stored, seized pursuant to warehouse liens and sold by storage companies.]
January 8, 2009 - Merkin's art advisor bought expensive Rothkos, lost millions
BLOOMBERG - Numerous collectors have approached Ezra Merkin seeking to buy his $150 million Rothko collection. Mr. Merkin is a New York financier who lost over $1 billion of his and his investor’s funds in the Madoff Ponzi scheme. Several of Mr. Merkin’s former clients have sued him for fraud in New York state and federal court and obtained an order barring him and his funds from withdrawing, liquidating or dissolving assets.
See also "N.Y. judge restrains Merkin from shutting down funds in Madoff lawsuit," USA Today, January 7, 2009.
[ARIS Commentary: Art transactions involving sellers (such as Mr. Merkin) facing liquidity problems and high-stake financial litigation present serious title risks. Such parties may not have the right to sell their artwork or other tangible personal property given the interests and liens of creditors and other aggrieved parties.]
January 2, 2009 - Art imitates crunch, with few exceptions
THE WALL STREET JOURNAL - The economic downturn that dramatically took hold in the fourth quarter of 2008 has impacted the art market broadly – from private dealers to the auction houses as well as the museum community facing fiscal challenges. However, choice works are still realizing record prices. Notably, ownership due diligence is significantly increasing in art transactions. In October 2008, the auction market disclosed for the first time in the sales catalogue that a title insurance policy was paid for by the seller accompanying a work sold at auction in order to mitigate risk for the seller and buyer and to facilitate a higher valuation of the offered work.
January 2, 2009 - Bernie Madoff’s gift to the art market
ART MARKET MONITOR - Despite initial predictions for 2009 as lacking in a bankable supply of quality art sales, high-end works will likely come to market as a result of sellers needing liquidity to settle their estate, divorce or debts. Many well-respected collectors were victims of the Madoff $50 billion Ponzi scheme, and their only liquid asset is art. The bankruptcy of Dreier LLP will also bring to market Mr. Dreier’s and the firm’s estimated $30 to $40 million art collection.
December 10, 2008 - Sotheby’s pulls Belafonte’s Martin Luther King papers from NY auction
HAMILTON SPECTATOR - Three important papers related to Martin Luther King, Jr., consigned by the performer Harry Belafonte, including a handwritten draft of Dr. King’s 1967 anti-Vietnam speech estimated to be worth $750,000 to $1.3 million, were pulled from auction. The King estate alleges that Mr. Belafonte improperly acquired a collection of Dr. King’s papers; Mr. Belafonte argues that Dr. King and others legally gifted him these items.
December 10, 2008 - Dreier update: client funds missing, details on Dreier’s art collection
LAW - Marc Dreier, sole equity partner of the law firm Dreier LLP, may attempt to sell artwork from his personal and the firm’s collection to settle debts arising out of several civil and criminal cases. The collapse of Dreier LLP is expected to involve claims of loan defaults and former clients seeking a return of their escrow funds. The U.S. Attorney’s Office has already filed criminal charges against Mr. Dreier in tandem with charges brought by the Securities and Exchange Commission (SEC) for allegedly defrauding several hedge funds of over $100 million. The SEC has filed a temporary restraining order in the U.S. District Court for the Southern District of New York to freeze Mr. Dreier’s and Dreier LLP’s assets including all of the valuable artworks located at the firm’s headquarters in New York City.
December 8, 2008 - $235,500 demanded for Nazi-looted art
COURTHOUSE NEWS SERVICE - The 1991 buyer of a French cubist painting is suing Christie’s in U.S. District Court for the Southern District of New York for selling the painting, which was allegedly stolen during World War II from the Parisian art dealer Paul Rosenberg. The Rosenberg family has demanded return of the painting and Sotheby’s has refused to sell it. The buyer is seeking to recover the present value of the painting or the $235,000 purchase price plus interest.
November 27, 2008 - In Mexico, an ownership fight sends an art collection into hiding
THE NEW YORK TIMES - Natasha Gelman’s collection of Mexican art, including famous works by Frida Kahlo and Diego Rivera, is the subject of a title dispute in a Mexican court among Robert Littman (an American curator to whom Mrs. Gelman bequeathed by will all of her artwork), Jerry Jung (Mrs. Gelman's cousin who is challenging Mr. Littman’s handling and control of the collection) and Francisco Fuentes Olvera (one of Mr. Jung’s lawyers who purchased under Mexican law the succession rights to Mrs. Gelman’s estate from her half-brother). Last spring, Mr. Littman removed the Gelman collection from the Cuernavaca Museum to an undisclosed location. The parties continue to dispute inheritance and trust and estate issues under Mexican law and whether the lower court judge’s decision wrongly ignored applicable law. Simultaneously, a Mexico City prosecutor has filed criminal charges against Mr. Littman.
November 20, 2008 - Jail sentence for Memphis antique gallery owner who cheated consignors
AUCTION CENTRAL NEWS - The owner of a Memphis gallery, Crump-Padgett Antique Gallery, which filed for bankruptcy in June 2004 in U.S. Bankruptcy Court, has been sentenced to jail for not paying hundreds of clients (both collectors and dealers) for the sale of their consigned jewelry, antiques and other objects, as well as evading state sales taxes. Ms. Padgett owes creditors approximately $1.4 million but is only liable to restitute a fraction of that amount because liquidation of the gallery’s inventory did not satisfy all of the debts owed, and following Tennessee law, the state criminal court judge set restitution based on the defendant’s ability to repay.
[ARIS Commentary: With the weakening art market, it is inevitable that countless dealers and galleries will eventually seek bankruptcy protection. Consignors are increasingly at risk of having a total or partial monetary loss of their property. Cases so far have involved dealers and galleries who, once thought to be financially solid, sell consignors’ artworks before filing for bankruptcy and do not pay the consignors, leaving consignors to pursue remedies for theft and as unsecured creditors in bankruptcy proceedings. Often bankruptcy liquidation sales of galleries’ inventory – which according to bankruptcy law includes consignors’ artworks – fail to raise sufficient funds to fully repay creditors. In addition to placing the consigning owners at financial risk, purchasers who buy previously consigned works (sold by defunct or bankrupt dealers and galleries) are likely to face claims that the work is stolen property whose clear title cannot pass to the innocent buyer following the precedent of Frigon v. Pacific Indemnity Co., No. 05-6214, 2007 U.S. Dist. LEXIS 17813, (D. N.D. Ill. Mar. 14, 2007).]
November 20, 2008 - Court rules painting was ‘stolen’ by Nazis
THE PROVIDENCE JOURNAL - The First Circuit Court of Appeals has affirmed Rhode Island Chief District Court Judge Lisi’s decision to return a Winterhalter painting to the estate of Max Stern, a persecuted German Jewish art dealer. This case is historic because it is the first time a U.S. court has recognized that a forced sale is equivalent to a theft. It will be relied upon as legal precedent by future WWII claimants, as well as the Stern estate to pursue restitution of hundreds of other missing artworks.
November 20, 2008 - The fine art of surviving the crash in auction prices
THE WALL STREET JOURNAL - Over the past few weeks, prices of contemporary, modern and Impressionist artworks decreased by approximately 30%. In addition, the disparity in prices between average and exceptional works has greatly widened. The recent decline in the art market has caused auctioneers and dealers to institute changes to their business models, including making cutbacks to their organizations, seeking to sell only targeted, high-end artworks and putting the risk of sale back onto collectors by not offering guarantees.
[ARIS Commentary: Despite the burst of the art-market bubble, some commentators have suggested that the volume of art sales points to the strength of the art market as opposed to any weakness. There are opportunities for buyers to obtain reasonably priced art at auction or through galleries and dealer. As certain collectors, who have bought a particular artist in bulk or leveraged their collections take financial hits, exceptional artworks will also come to the market, many of which may not have been traded for decades. Buyers will thus have the opportunity to purchase reasonably priced, great artworks and structure sales transactions according to their own terms, including purchasing title insurance to ensure that they acquire clear legal title.]
November 14, 2008 - Suit proceeds against Christie’s auction house over fake Basquiat
LAW - A Supreme Court of the State of New York has allowed Mr. Guido Orsi – who purchased a fake Basquiat work for $185,000 from Tony Shafrazi Gallery, Inc. – to sue Christie’s under theories of fraud and fraudulent inducement. Mr. Orsi alleges that Christie’s listed the work in its February 1990 catalogue as an authentic Basquiat picture with the provenance “acquired directly from the artist” even though the Authentication Committee of the Estate of Jean-Michel Basquiat raised concerns about the authenticity of the work before the sale and had asked Christie’s to withdraw it. If Mr. Orsi prevails, the court indicated that the plaintiff could seek remedies under UCC §2-721 including damages for loss of profits, which could amount to $2 million (the current value of an authentic Basquiat painting), as well as punitive damages.
[ARIS Commentary: This case raises important issues about the relationship among authenticity, provenance and legal title to art. As some commentators suggest, see
The Art Law Blogspot - Fraud on the (art) market?, the case will have far-reaching legal implications because of the liabilities which auction houses and potentially other parties will have for giving private warranties of provenance and opinions of authenticity upon which subsequent purchasers in the chain of title may rely. Although there are legal differences between insuring title versus insuring authenticity, the fact patterns supporting legal title and authenticity are usually interrelated. A third-party guarantee of legal title through title insurance is the only true means to avoid the type of long-term title (provenance) related exposures this case highlights.]
November 13, 2008 - Lehman to sell $8 million of art to pay creditors
BLOOMBERG - Lehman Brothers Holdings, Inc., which filed for bankruptcy last month, plans to sell $8 million of its art warehoused in New York and Paris. As a means to stop art-handlers from seizing the art under New York and French law in order to satisfy overdue bills, Lehman has asked the U.S. Bankruptcy Court to allow Lehman to pay the $20,000 of unpaid handling and storage costs. Barclays PLC, which has acquired Lehman's North American division, holds a right-of-first-refusal lien on all of the artworks held in Lehman's former Manhattan headquarters.
November 10, 2008 - Artworks show up in Beverly Hills pawnshops
ARTINFO - High-end pawnshops in California have seen a surge in their business, including artworks signed by leading artists such as Picasso, Rauschenberg and Warhol. As in the real estate mortgage market, the pawn lending market has experienced decreased redemptions of loans and increased customer defaults.
November 4, 2008 - Auction season opens with little enthusiasm
THE NEW YORK TIMES - As anticipated by dealers, collectors and art advisors, the art market is showing signs of turmoil amid the global financial crisis. The important fall auction season began with mixed results. A handful of works sold above pre-sale estimates including Malevich's "Suprematist Composition," which sold for the record-price of $60 million under a pre-auction irrevocable bid. The majority of works sold far below their estimates, which were set this summer. Many other works failed to sell entirely.
[ARIS Commentary: Initial fall auction results suggest that select works will continue to sell at high prices but that buyers are more tentative in their decision-making process. The market also shows concrete signs that liquidity exigencies are taking hold on the sale-side of the auction market, especially for less than top-tier works, as sellers have become nervous about lukewarm responses to pre-sale estimates. ARIS has seen an influx of artworks in the market that have been used to bridge liquidity needs and are encumbered by a variety of traditional liens, as well as an increasing frequency of these works moving through the private sector, compounding title exposures to buyers.]
October 30, 2008 - Minneapolis Institute restitutes Leger painting
ARTINFO - After a decade of researching the WWII provenance of a Fernand Leger painting in its collection, the Minneapolis Institute of Arts has returned the work to the French heirs of the original owner, Alphonse Kann. The painting (worth an estimated $2.8 million) was bequeathed to the museum in 1961 by a patron who purchased it in the early 1950s from a then-leading gallery in New York. The restitution decision follows the museum's receipt of a claim for the painting in 1997.
October 6, 2008 - A collection of tribal art is embroiled in a modern family feud
THE NEW YORK TIMES - A New York court has ruled that Sotheby's may take possession of 54 works in the Jolika Collection that John Friede used as collateral to secure a $25 million loan from Sotheby’s. The New York court also placed a restraining order on 99 other works in the collection. The 4,000-piece Jolika collection worth $90 million is the subject of on-going litigation in Florida between John Friede and his two brothers and in California between John Friede and the de Young Museum of Fine Arts in San Francisco to whom John Friede allegedly gifted the entire collection.
October 1, 2008 - Wrangling over resales
ARTINFO - The use and enforcement of resale clauses in the contemporary art market are rapidly increasing. A relatively little known practice until recently, these clauses are incorporated into gallery or artist bills of sale for primary market transactions. The clause requires the buyer to offer the work back to the dealer or artist (some clauses are limited to a specific period after the primary market sale such as five or ten years) and prohibits the buyer from reselling the work in the secondary market unless the dealer or artist has first declined to exercise its right of first refusal. Dealers, artists, collectors and advisors hotly debate the merit of such agreements from a market-control standpoint.
[ARIS Commentary: The withdrawal of "Flower Ball Blood (3-D) V," 2007, by Takashi Murakami from auction at Christie’s London in June 2008 highlights the trend of using resale clauses and the risks which this trend poses to secondary market buyers (or possessors by other means of ownership such as by gift or descent) who, due to the non-transparent nature of the art market and existing transaction standards, will not know whether a resale clause is tied to the work and whether it has been honored. The Murakami case remains in litigation in a Tokyo District Court.]
September 23, 2008 - De Young Art Collection embroiled in family feud
ARTINFO - The 4,000-piece Jolika Collection is the subject of a title dispute between brothers (John and Robert Friede and Thomas Jaffe) and the M.H. de Young Memorial Museum. Courts in Florida and California have issued contradictory orders as to which brother owns the works and when the works can be sold. The museum alleges that it owns and acquired title to the entire collection through gifts from John Friede. Mr. Friede, however, who allegedly used the art as collateral for $30 million liens to his brothers, has said that he cannot sell or transfer any of the artwork until the IRS has assessed inheritance taxes owed.
September 22, 2008 - International stand-off over tribal art sale in Paris
ANTIQUES TRADE GAZETTE - The Mexican Embassy obtained a court order halting the auction in Paris of 85 lots of Pre-Colombian objects worth an estimated €5 million. The Mexican government alleges that the works were illegally exported from its territory. The auctioneer accused Mexico of acting in bad faith because almost all of the works came from well-known private collections with fully documented provenances.
September 21, 2008 - Beaverbrook saga goes back to court
THE GLOBE AND MAIL - The heirs of Lord Beaverbrook and the Beaverbrook U.K. Foundation are appealing a judge’s decision granting title to 85 of 133 artworks in Lord Beaverbrook’s hundred-million-dollar collection to the Beaverbrook Art Gallery. The title dispute focuses on whether the artwork was gifted or has been on loan to the gallery since the 1950s and 1960s. Litigation in the case has been on-going since 2006, and the parties have incurred over $5 million in legal costs.
September 15, 2008 - Who owns the artworks of Martin Ramirez?
MAINE ANTIQUE DIGEST - The estate of the artist Martin Ramirez (1895-1963) has filed suit in New York to recover 17 Ramirez works, which a therapist acquired 45 years ago while Ramirez was an adult patient in a California psychiatric hospital. The estate alleges pursuant to California law that no one, including specifically prohibited hospital personnel, could have acquired legal title to Ramirez works while he was involuntarily committed because he lacked the capacity to consent to gift or otherwise transfer his artwork. The therapist, who attempted to sell the works at auction in New York, has filed suit in California seeking a declaratory judgment to quiet title.
September 3, 2008 - Sotheby's sues CNET founder for $16.8 million in fees
BLOOMBERG - Sotheby's is suing Halsey Minor, the founder of CNET Networks Inc., for failing to pay $16.8 million for three paintings, including Edward Hick's "Peaceable Kingdom." Mr. Minor plans to file a counterclaim alleging that Sotheby’s failure to disclose its financial interest in the Hicks work affected the price. Ralph Esmerian had pledged it to Sotheby’s and Merrill Lynch as loan collateral, plus also promised to donate it to the American Folk Art Museum.
September 2, 2008 - Lorello pleads guilty
MAINE ANTIQUE DIGEST - A former state employee plead guilty to stealing thousands of historical documents and artifacts from the New York State Library and Archives. Following an investigation by the Attorney General, Mr. Lorello was ordered to pay restitution to buyers who unknowingly purchased stolen items from him on eBay or at collector’s shows and have returned the stolen items to the state.
August 26, 2008 - Lawsuit over disputed Warhol will go forward
THE NEW YORK SUN - A New York state court rejected John Chamberlain's request to dismiss a lawsuit filed by the former Warhol assistant, Gerard Malanga. The litigation raised questions about the legal title and authenticity of the painting known as “315 Johns.” The court found that the statute of limitations did not bar Mr. Malanga from seeking to recover the painting and/or punitive damages for the alleged $5 million dollar purchase price.
August 25, 2008 - A case of conflicting principles that's as good as gold
THE VANCOUVER SUN - A Canadian court divided title to five rare gold coins between the heir of the purchaser and the heir of the owner (who reported the coins stolen ten years ago) based on evidence of proof of ownership. The parties agreed to ignore the British Columbia law, which provides that good title passes when goods are sold in the open market, because all other Canadian provinces follow the legal principle that one cannot pass better title than one possesses.
August 19, 2008 - Ex-lawyer found guilty in stolen art trial
THE BOSTON GLOBE - A former Massachusetts lawyer was convicted of knowingly possessing six stolen paintings. Mr. Mardirosian stored his client’s stolen paintings in Switzerland for twenty years before agreeing to return (via intermediaries and a shell company) a Cezanne work in exchange for title to the remaining works. The parties dispute whether Mr. Mardirosian legally acquired title to the works in lieu of a finder’s fee or through illegal extortion.
August 18, 2008 - New Jersey makes claim for a Jefferson letter; collector sues for its return
MAINE ANTIQUE DIGEST - Last spring, a letter by Thomas Jefferson was pulled from auction after the Attorney General of New Jersey claimed it was a public record belonging to the state. Former President Jefferson’s letter dated 1807 was addressed to the New Jersey legislature. The consignor sued the auction house to release the letter but the auction house has refused to do so until the parties reach an agreement or a court issues a non-appealable order
August 8, 2008 - North board admits talks about painting's future are at impasse
THE SUN CHRONICLE - A small town in Massachusetts and the local school board disagree on who owns and whether to sell a Russian painting donated over fifty years ago. The donor's family has threatened to sue if the work (worth an estimated $1 million) is sold, even if the proceeds are used to fund school art programs. Officials acknowledge that the painting will not be sold anytime soon given the on-going dispute.
August 4, 2008 - Chief Nazi-loot researcher sees art claims mounting in Germany
BLOOMBERG - The lead German researcher (managing the German government’s agency tasked with helping museums address looted art claims) stated that he expects the pace of restitution claims not to slow down but rather to continue at the same pace over the next 10 years. During the Nazi regime, an estimated 650,000 works of art were plundered and displaced from their original owners.
July 22, 2008 - Estate is owner of stolen paintings
MUSEUM SECURITY NETWORK - A federal judge has ruled that three paintings by Courbet, Hamilton and Hassam stolen more than 30 years ago will be returned to the estate of the heirs of the original owner. The paintings were stolen by gunned robbers from Mrs. Persky’s Rhode Island home in 1976. The successor to the insurance company, which paid the insured for the theft claim, asserted title to the paintings. Other parties involved in the dispute included the estate of the heirs to Ms. Persky’s estate, the alleged good faith purchaser, as well as the lender who had possession of the works for 10 years.
July 16, 2008 - Authorities seize Ferreira collection Lichtenstein
ARTINFO - Federal agents seized a Lichtenstein work from a Los Angeles private collector, who purchased the work in 2007 for $1.3 million from a gallery who had the work on consignment from another local gallery. The painting is one of 30 works owned by Edemar Cid Ferreira (who recently went bankrupt in connection with the collapse of Banco Santos) and according to Brazilian officials is believed to have been illegally exported in a money-laundering scheme. The 2007 purchaser is suing the two galleries for breach of contract for the defective title and encumbrances on the work.
July 10, 2008 - Senate panel close to deal on donations of artwork
THE NEW YORK TIMES - The Senate Finance Committee has proposed amendments to try to loosen restrictions imposed in 2006 on "partial gifts." Partial gifts allow collectors to claim tax deductions for donated increments of artwork promised to be fully gifted over time. Proposed amendments include provisions: Making all partial gifts subject to binding contracts to prevent heirs from reneging on gifts after donor's death, giving collectors 20 years as opposed to 10 years to donate full ownership, permitting subsequent deductions on increased valuations rather than capping valuations at the first partial gift, and requiring the IRS Art Advisory Panel to approve appraisals.
July 5, 2008 - Art theft! Lawsuits! Spielberg!
LAS VEGAS SUN - Norman Rockwell’s "Russian Schoolroom," which was stolen in 1973 from Mr. Solomon, while it was on display at a Missouri gallery; purchased in 1988 at a New Orleans auction by Ms. Cutler; and then sold in 1989 to Mr. Spielberg, represents the inherent problems associated with private indemnities in art transactions. Mr. Solomon only listed the stolen work with the FBI. The New Orleans and Missouri auction houses are no longer in existence, both went bankrupt. Ms. Cutler claims to be a good faith purchaser. Costs in the legal case, involving title to the painting, have already exceeded the work’s current $700,000 value and the case is expected to continue.
July 4, 2008 - Private collectors hit by Nazi art claims
DUTCH NEWS - The NRC Handelsblad Dutch newspaper recently reported that private collectors, not just museums, are increasingly being targeted by claimants alleging that their family’s art was stolen during World War II. Most such collectors bought their art in good faith through regular channels. Since a work cannot be sold once it has been identified as “stolen,” collectors are being forced to return the work, reach a settlement, or litigate.
June 26, 2008 - Suit claims a Warhol is not, well, a Warhol
THE NEW YORK TIMES - Former Warhol assistant, Gerard Malanga, is seeking title to a painting previously thought to have been created by Warhol. Mr. Malanga claims that he and two friends created the work depicting Chamberlain in 1971. He also claims that he lost track of the work’s storage location and was shocked to learn from Mr. Chamberlain that he had sold the work for $5 million dollars in 2004.
June 26, 2008 - Betrayal, theft and a family feud in the art world
MUSEUM SECURITY NETWORK - Chicago police arrested the daughter-in-law of the late op-artist, Viktor Vasarely, for removing hundreds of Vasarely works from a gallery’s storage facility. Ms. Taburno-Vasarely insists the works belong to her and that she was protecting the works from the gallery owner, who was trying to sell them without her authority. Since 1995, the Vasarely heirs and foundation have been involved in litigation in France over title to the bulk of the artists’ works.
June 14, 2008 - A wake up call for the antiquities market
INTERNATIONAL HERALD TRIBUNE - The Association of Art Museum Directors’ June 2008 report has already impacted the art market. The guidelines encourage museums to only acquire an antiquity if they have solid proof the object was outside the source country by 1970 or was legally exported thereafter. In recent auctions, sales of antiquities with well-documented early provenances have grossly exceeded pre-sale estimates. Prices for such works are expected to continue to rise in the next three to five years.
June 8, 2008 - Why the rise of the private museum is rewriting the rule of the market
THE ART NEWSPAPER - Private collectors are increasingly buying art to build their own private museums. This new trend is changing the dynamics of art transactions. Dealers are now giving special access, discounts, and attention to those opening up independent exhibition spaces. Dealers noted, however, that they are mindful of conducting due diligence on private museum buyers, who might say anything to gain access to material or sell works from their collection in the future.
May 30, 2008 - Art deals more often involve art of litigation
LAW.COM - Lawyers are spending more time litigating disputes involving works of art. They attribute this trend to the increased prices for works, art deals spanning international borders and the growing number of new, well-funded collectors. The informal traditions of art transactions involving little more than a handshake are now deemed inadequate protection given the financials and litigious environment of today's art market.
May 22, 2008 - Search continues for Picasso etchings reported stolen from Gallery Biba
PALM BEACH DAILY NEWS - Thieves burglarized and robbed two well-known Picasso etchings from Gallery Biba in Palm Beach, Florida. The two stolen works, "Le Repas Frugal" and "Jacqueline Lisant," are worth an estimated total value of around $450,000. Police are investigating whether the thieves were familiar with the gallery’s layout and inventory.
May 22, 2008 - 19th century painting found in raid
CAPE COD TIMES - Police seized a 19th century painting by Robert Farren from a residential home in Cape Cod, Massachusetts. The homeowner, who is a building inspector, was promptly arrested and charged with two counts of receiving stolen property. Investigators discovered the painting during a raid to recover stolen coins and jewelry, but they believe the painting was part of the same heist. Officials are now attempting to identify the owner of the painting.
May 19, 2008 - Experts fall out over Van Gogh's 'last painting'
GUARDIAN NEWS - An alleged Van Gogh painting stored in a bank vault in Athens, Greece is the subject of an authenticity and title dispute. The picture, which might have been one of the artist’s last paintings, was looted by the Nazis from a French Jewish family and “liberated” by a Greek resistance fighter in 1944. Under Greek law, the work most likely belongs to the current possessor and not heirs of the original Jewish owners.
May 18, 2008 - Switzerland returns plundered Constable painting to Jewish family
EUROPEAN JEWISH PRESS - An art gallery in Geneva, Switzerland, is returning a 19th century painting by John Constable to the heirs of the Jaffe family. The picture entitled "Dedham from Langham" was confiscated from the Jewish collectors, John and Anna Jaffe, in Nice, France and sold at auction in 1943. It was donated by a private collector in the 1980s and has been exhibited at the gallery ever since.
May 1, 2008 - Esmerian kin claim antique jewelry collection isn't his to sell
BLOOMBERG - New York jeweler Ralph Esmerian’s sister and her four children are suing Mr. Esmerian claiming that the special jewelry collection that he pledged as loan collateral to Merrill Lynch is property of the family's trust. One of the most important pieces in the collection allegedly owned by the trust is a diamond brooch once owned by Napoleon III and recently purchased by the Louvre for $10.7 million.
April 24, 2008 - Malevich heirs reach amicable settlement with Amsterdam
ARTINFO - After years of litigation involving a long-standing dispute over whether the 1958 dealer had authority to sell the Russian avant-garde artist Malevich’s collection, the city of Amsterdam and the heirs of the artist have reached a settlement. The heirs will take title to five of the most important works and the rest will remain in the city’s collection.
April 21, 2008 - Put a diamond under stress, and you might crack
INTERNATIONAL HERALD TRIBUNE - Christie’s auction of Ralph Esmerian’s collection of rare jewels, which Merrill Lynch accepted as collateral for $177 million in loans, has been canceled. Mr. Esmerian disputed Merrill Lynch’s low valuation of the jewelry and has filed for bankruptcy, in the wake of breaking his promised gift of Edward’s Hick’s “Peaceable Kingdom” to the American Folk Art Museum to satisfy debts owed to Sotheby’s.
April 14, 2008 - Is street turmoil coloring art market?
THE WALL STREET JOURNAL - Art dealers remain cautious about the strength of the art market. Signs that it might be softening include the fact that Sotheby’s accounts receivables doubled in 2007, allowing buyers more time to pay for their purchases, and it along with Christie’s are still paying high guarantees to secure masterpieces and supply for their big sales.
April 9, 2008 - Should you invest in art?
VILLAGE SOUP - Art is an investment class, which has seen tremendous growth in recent years. However, there are numerous risks associated with holding art as an asset, including its subjective pricing, lack of short term liquidity, as well as complicated legal and tax issues related to estate planning and charitable gifting.
April 5, 2008 - Museum arranges to return stolen art to Italy
THE GRAND RAPIDS PRESS - The Grand Rapids Art Museum in Michigan is repatriating two Italian 14th century panels. The museum acquired the pair in 1947 from a reputable New York art dealer. An article published in 1978 first put the museum on notice that the panels were stolen in 1902 from a 16 panel altarpiece in a church in Abruzzo, Italy.
April 3, 2008 - At odds over art
THE NEW YORK SUN - The philanthropist Eli Broad’s decision to leave his art collection to a private foundation instead of the Los Angeles Museum of Art reflects the tension between museums and wealthy donors over whether donated works should be on public view and whether a donor’s collection should be kept together. Mr. Broad’s announcement illustrates the new trend in creating private family foundations that operate as lending libraries to museums and other educational institutions.
April 2, 2008 - France to cut red tape, provide free loans to revive art market
BLOOMBERG - The French Cultural Minister introduced reforms to increase France’s position in the global art market, which fell to fourth place behind China. She hopes her plan allowing guaranteed minimum prices and interest free art loans will also benefit private and corporate collectors.
April 2, 2008 - Art museums struggle with provenance issues
THE CHRISTIAN SCIENCE MONITOR - Across the country, art museums are struggling with how to handle the continuing problem of acquiring objects or receiving gifted objects, which may have been looted or smuggled and/or have gaps in their provenance history, especially in light of several recent high profile legal actions against museums.
April 1, 2008 - London dealer forced to return Souzas
THE ART NEWSPAPER - An English court ordered a London dealer to return two paintings worth £350,000, which had been missing since the 1990s. The judge found that the dealer failed to meet the burden of proof to establish that he was a good faith purchaser because he did not keep detailed or accurate records about the sales transaction.
March 26, 2008 - Scotland Yard seizes £10m old masters
GUARDIAN NEWS - Scotland Yard seized two works by an 18th century Italian artist worth £10 million, which were illegally exported from Italy without the necessary licenses for important paintings. The Crespi family sold the pictures in 2005 to an Italian dealer, who later sold them to an English dealer, who allegedly sold them to a US buyer.
March 21, 2008 - Mortgage crisis hits cultural institutions
LOS ANGELES TIMES - Several major cultural institutions in California, including the Los Angeles County Museum of Art whose losses are approaching $2 million, have mounting financial problems due to the sub-prime mortgage crisis and resulting soaring interest rates on construction bonds. In most cases, interest rates have more than doubled since 2007.
March 21, 2008 - Painting looted by Nazis is recovered by family of murdered Polish owner
TIMES ONLINE - A 17th century Dutch painting was pulled from a Christie's auction after it was discovered by the Polish Embassy in London that it was stolen from an antique dealer, who was murdered in the Warsaw ghetto. The heirs of the original owner and the consignor negotiated a settlement agreement and the painting is to be sold at Christie's next month.
March 20, 2008 - Art forgery operation broken up by FBI and Spanish police
GUARDIAN NEWS - Seven individuals, including art dealers from Italy, Spain and the United States, have been charged with creating and selling fake prints purportedly by Picasso, Miró, Dalí and Chagall. The international art forgery ring made around $5 million dollars in the sale of thousands of fake works, with fake certificates of authenticity, on eBay and in galleries, including some in Florida and Illinois, to thousands of collectors around the world.
March 19, 2008 - Russia votes to return looted stained glass to Germany
ARTINFO - The Russian lower house voted to return six 14th-century stained-glass windows that were taken from a German church by Russian forces during World War II. The upper legislative house and the president must still approve the bill. For decades, Russia and Germany have argued over what to do with artworks illegally looted during World War II.
March 17, 2008 - Monet, Rodin among masterpieces stolen near Paris, AFP says
BLOOMBERG - Five masked thieves robbed a French art dealer at gunpoint in his home in Le Pecq, west of Paris, France. The thieves took approximately 30 paintings by masters, such as Monet, Cezanne, Corot and Sisley and a sculpture by Rodin. According to police, it is the second time this dealer was robbed.
March 7, 2008 - Museum wants stolen Pissarro returned
ABC NEWS - The Faure Museum in Aix-les-Bains, France has asked a New York woman to return Pissarro’s ”The Fish Market,” which was stolen from its collection in 1981. The current possessor insists that because she bought it in good faith for $8,500 from a US dealer, she should be compensated for returning it.
March 6, 2008 - U.K. art report says 60% of February sale lots missed estimate
BLOOMBERG - ArtTactic, a U.K. research company, reported that 60% of lots from the February 2008 London contemporary art auctions failed to reach their minimum estimates, and ten lots accounted for 70% of total sales at Christie’s and Sotheby’s, which signals a slowing demand in the middle of the market.
March 4, 2008 - 'Peaceable Kingdom' painting by Edward Hicks leaves American Folk Art Museum
ANTIQUES AND THE ARTS - As a result of a lawsuit, Edward Hick’s painting "Peaceable Kingdom" will be sold by Sotheby’s in a private sale to satisfy the folk art collector Ralph Esmerian’s debts. Mr. Esmerian double pledged it as loan collateral to Merrill Lynch and Christie’s and promised to donate it to the American Folk Art Museum.
March 2, 2008 - Inflated art appraisals cost U.S. government untold millions
LOS ANGELES TIMES - IRS audits of museum donations and donors’ tax deductions revealed that the government lost $183 million from inflated appraisals in the last two decades. Experts believe that this represents a fraction of the problem with overvalued appraisals, whose frequency and inflated amounts have grown in recent years.
February 28, 2008 - Untouched by Nazi hands, but still...
THE WALL STREET JOURNAL - Two cases brought by leading museums in New York and Massachusetts may require the federal courts to address whether a "forced sale" involving some type of Nazi coercion is akin to a theft invalidating a current owner's title to their paintings. There is presently no legal definition of a forced sale, and at least two district courts in Ohio and Rhode Island have reached different conclusions about involuntary sales.
February 25, 2008 - Show it or sell it: Museums are urged to put unseen artefacts on the market
THE TIMES - A new policy for England’s museums and galleries will encourage the de-accessioning of artwork. Rather than keep works which are peripheral to a museum’s core collection, The Museums Association says that museums should sell un-exhibited works in their collections. Donors may dislike this policy change because many gifts were made assuming that they would not be sold.
February 23, 2008 - Ruling to come on art collection
THE NEW YORK TIMES - The fate of the Fisk University’s 101 piece art collection will be decided within 30 days. The court recently struck down the University’s $30 million dollar deal with the Crystal Bridges Museum of American Art to sell a 50% stake in the collection as going against the donor Georgia O’Keefe’s wishes. The court must now decide whether the University has forfeited its right to the collection and if so whether to return it to the artist’s estate.
February 22, 2008 - Stolen art turns up in Bristol
EAST BAY RI - Three long lost stolen paintings discovered in the home of a Bristol attorney have sparked a complicated dispute between the attorney, a Barrington art dealer, an insurance company, and the heir to the stolen paintings. The paintings were used as collateral for the attorney’s loan to his art dealer brother, who reportedly was unaware that the pictures were stolen in 1976.
February 11, 2008 - Art worth $163.2M stolen from Zurich museum
USA TODAY - Three masked men stole four oil paintings by Cezanne, Degas, Monet, and Van Gogh worth about $163 million from the E.G. Buehrle Collection in Zurich, Switzerland. There is a $90,000 reward offered for information leading to the return of these works stolen in Europe's second biggest art robbery ever.
February 8, 2008 - A Warhol surfaces and is headed for court
THE NEW YORK TIMES - A SoHo gallery is suing a Brooklyn man, who claims he purchased a Warhol painting at a flea market, to recover the picture, which was stolen from the gallery in 1998. Both parties have claimed title to the Warhol painting and intend to take their dispute to court.
February 7, 2008 - Russians reveal hoard of 46,000 art treasures stolen by Nazis
BLOOMBERG - The Russian government has published on a new website details about 46,000 art works that the Nazis looted from Russian museums during World War II. This information will help scholars, the art market, and law enforcement agencies locate Russia’s missing treasures, which are subject to title disputes.
February 4, 2008 - Tax scheme is blamed for damage to artifacts
THE NEW YORK TIMES - In addition to destroying archeology sites and illegally importing looted artifacts into the United States, the federal investigation of several California museums is focused on potential tax fraud violations. The IRS is investigating whether smugglers and dealers sold artifacts to their clients and then helped them arrange for inflated appraisals and for the items to be donated to museums for inflated tax deductions.
January 29, 2008 - The Russians are right to be nervous
THE TIMES - Russia agreed to participate in an exhibit now on display at the Royal Academy in London because the UK enacted immunity from seizure legislation. But the law may not serve its intended purpose of protecting Russia from claims for property appropriated during the Revolution. English courts are empowered to strike the law if it is deemed incompatible with property rights granted by the Human Rights Act and international law.
January 29, 2008 - Nazi victim's heirs lose patience with Sweden on art
BLOOMBERG - In Sweden’s first restitution case, the heirs of a Jewish businessman are seeking to recover a Nolde painting from Stockholm’s Moderna Museet. In July 2007, the Swedish government told the museum to resolve the claim in accordance with the Washington Conference Principles. To date, the parties have still not reached a settlement.
January 29, 2008 - A history buff uncovers thefts of american history treasures
THE NEW YORK TIMES - Since 2002, a New York state librarian has stolen hundreds of artifacts from the state’s collection and sold them at trade shows and on eBay, which does not guarantee the legality of items advertised or the ability of sellers to sell them.
January 24, 2008 - Fed agents raid California museums for looted artifacts
FOX NEWS - Federal agents raided four California museums searching for looted antiquities that were illegally imported from Southeast Asian and Native American sites. Authorities believe that Robert Olson and the owners of Silk Roads Gallery arranged for the donation of smuggled objects and inflated gift tax deductions for their clients.
January 24, 2008 - MFA sues to bolster claim to disputed 1913 painting
THE BOSTON GLOBE - The Museum of Fine Arts in Boston filed a declaratory judgment asking the court to name it owner of Oskar Kokoschka's 1913 painting "Two Nudes (Lovers)". The museum disputes Claudia Seger-Thomschitz's claim that her uncle, Oskar Reichel, sold the painting under duress in Vienna in 1938.
January 23, 2008 - Art raid swoops on Samsung camp
SHANGHAI DAILY - South Korean officials are investigating whether tens of thousands of paintings stored at Samsung warehouses were purchased using an illegal company slush fund.
January 18, 2008 - Collector returns art Italy says was looted
THE NEW YORK TIMES - After 18 months of heated negotiations, New York philanthropist Shelby White is the first private collector to agree to return to Italy 10 allegedly looted ancient objects, which she purchased in good faith. Italy may still pursue claims for other antiquities in her collection, which were not cataloged for The Metropolitan Museum of Art's 1990 exhibit.
December 19, 2007 - Russia cancels U.K. art show. Cites lack of guarantee
BLOOMBERG - The exhibition, “From Russia”, scheduled to open at London’s Royal Academy of Arts on January 26, 2008, has been cancelled by the Russian government after the British government failed to offer a legal guarantee of immunity from third-party confiscation.
December 7, 2007 - Museums ask New York federal court to reject claim on Picassos
THE NEW YORK SUN - The Museum of Modern Art and the Solomon R. Guggenheim Foundation have both asked a Federal District Court to declare them the owners of two Picasso paintings after lawyers for Julius H. Schoeps requested that the museums return the paintings.
December 6, 2007 - Sotheby's won't sell Salander works
ARTINFO - Sotheby’s, Inc. has filed a notice with the court withdrawing its bid to sell artwork connected to the Salander-O’Reilly Gallery. The withdrawal follows concerns of ownership, voiced by a committee representing the gallery’s unsecured creditors.
November 20, 2007 - Lloyd Webber Foundation wins dismissal of Picasso art lawsuit
BLOOMBERG - A New York Supreme Court Justice ruled that Julius Schoeps cannot sue the Andrew Lloyd Webber Foundation for restitution of a Pablo Picasso painting because Schoeps was not appointed to represent the estate of his great uncle, Berlin banker Paul von Mendelssohn-Bartholdy. Christie's was scheduled to sell the Picasso a year ago when Schoeps sued, claiming that the painting was forcibly sold by his great uncle. Christie’s had valued the painting at $40 million to $60 million at the time it withdrew the painting from auction.
November 19, 2007 - Robert DeNiro says gallery stole father’s paintings
NEW YORK POST - Lawyers for Robert DeNiro are planning to take legal action against Lawrence Salander and Salander-O’Reilly Galleries to recover twelve paintings by Robert DeNiro Sr. These painting were entrusted to Salander-O’Reilly Galleries by Robert DeNiro on consignment. The paintings were allegedly used by Salander-O’Reilly Galleries to settle a $5 million debt with Benucci S.R.L. in June of 2007.
November 6, 2007 - Salander case may change art market
THE NEW YORK SUN - The Salander-O’Reilly case draws mounting attention to the unregulated nature of the art industry and the significant limitations of the Uniform Commercial Code as a way to secure art transactions. Salander-O’Reilly Galleries, LLC, and its owner have filed for bankruptcy protection as a result of creditors having now filed more than fifty-three claims against the gallery and its owner totaling in excess of $43 million.
November 5, 2007 - Salander-O'Reilly Galleries owner files bankruptcy
BLOOMBERG - Lawrence and Julie Salander have filed for personal bankruptcy. Lawrence Salander is an owner of the Salander-O’Reilly Galleries LLC in New York. On November 1, 2007, creditors asked a judge to force the gallery into bankruptcy. Days later, the Salanders’ filed for bankruptcy, claiming over $50 million in personal debt, most of which is owed to other galleries and art institutions. New York prosecutors are also investigating the business operations.
May 19, 2007 - Spielberg faces new battle over Rockwell painting
THE WALL STREET JOURNAL - This past week, art dealers with earlier ties to the work went to court to claim it back. These new developments pit two art dealers -- both of whom claim ownership prior to Mr. Spielberg's acquisition -- against each other. That's throwing the fate of the painting into limbo.
Tuesday, March 9, 2010 
