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Art Law

Recent Developments in Art Litigation and Art Finance

Bankruptcy Trustee Probe: Robert Truland’s Purchase of Company Artwork for Fair Price?

Posted in Litigation Issues

The Washington Business Journal recently reported that the bankruptcy trustee for Truland Group Inc., D.C.’s area’s largest electrical contractor, is investigating whether the company’s CEO, Robert W. Truland, paid fair value for the dozens of pieces of artwork that he purchased from the company just four months before it suddenly shut down.  Read full article here.

A number of former employees of the Truland Group reported that Robert Truland was seen removing artwork from the walls of the company’s headquarters, just one day before it filed for bankruptcy.  Robert Truland paid the company $188,275 for the artwork, some of which the company previously bought from the Corcoran and Zenith galleries.

Skate’s Releases Inaugural Masterpieces Market Report for Fall 2014

Posted in Art Finance, Art Valuation

This week Skate’s LLC, often referred to as one of the world’s leading art investment firms, released its inaugural Masterpieces Market Report for the third quarter of 2014.  If you haven’t already noticed from my previous posts on Skate’s publications, I am a frequent reader and admirer of Skate’s various reports, which I personally find to be very informative and well written on the art market.  And this fall’s new issue is no exception as I can’t say enough good things about these timely, well executed reports published by Skate’s.

The inaugural issue opens with a succinctly written “Executive Summary” followed by key sections entitled “Best and Worst Trades with Masterpieces – Q3 2014,” “Global Masterpieces Trade Statistics – Q3 2014,” “Top Lots to Watch – October 2014,” and “Off-Auction Pricing Case Study:  The Curious Case of the Detroit Collection.”  The report includes seven exhibits accompanying the foregoing sections, including an impressively compiled “All Trades in Skate’s Top 10,000 Price Category in Q3 – 2014,” “Top 10 October Lots,” “Anticipated Investment Returns on Major Auction Sales in October,” and “DIA Top Lots vs Auction Market Data as per Skate’s Top 10,000.”

Notably, Skate’s best masterpiece trades for the third quarter of 2014 were for purchases made in the 1990s as long-term investments in 20th century artists.  The purchase of works by Warhol, Basquiat and Dubufett in the 1990s and the sale of same earlier this year turned out very well for art collectors who realized “strong double-digit annualized returns over their 15-23 investment horizons” as analyzed by Skate’s.

Skate’s reports that the Old Masters market continues its decline as it loses appeal among both established and new art collectors.  When compared to the Old Masters, investment returns on the leading contemporary artists (also the “most liquid”) are “striking.”

At the end of the report is an interesting case study on the collection of the Detroit Institute of Arts (“DIA”) and the significant art valuation of the collection in connection with the city of Detroit’s bankruptcy filing last year.  Skate’s offers insight into the valuation of the DIA collections and the financial strategy that may be used by the city of Detroit.

Skate’s will publish its next issue of the Masterpieces Market Report in January 2015 – the report is expected to include complete results from Q4 2014 auction sales along with other valuable information on the art market. 

Esteemed 20th Century Private Art Collection Expected To Fetch In Excess Of $85 Million At Sotheby’s Fall Auctions

Posted in Art Valuation

In a recent announcement by Sotheby’s earlier this week, a significant collection of modern and contemporary art compiled by two of the 20th century’s most renowned collectors is expected to generate in excess of $85 million in sales during Sotheby’s upcoming contemporary and modern art auctions next month.

As recently reported here, some of the prized items in the collection leading next month’s series of contemporary and modern art auctions include Mark Rothko’s 1951 canvas entitled “No. 21 (Red, Brown, Black and Orange),” which is expected to fetch more than $50 million, and works by Salvador Dali, Pablo Picasso, and Andy Warhol, along with other prominent artists from the private art collection of Pierre and Sao Schlumberger.  According to Oliver Barker, deputy chairman of Sotheby’s Europe, the couple’s collection is highly regarded as “one of the most important private collections of our time.”

For those not familiar with the Schlumberger name, Pierre Schlumberger was a French oil industry tycoon whose father and uncle in the 1920s founded Schlumberger Limited, which is the world’s largest oil field services company.

The Schlumberger collection is comprised of some 90 works and is among the many highly anticipated works of the fall auction season.

Sotheby’s further announced last week that it is selling the iconic sculpture “Chariot” by Alberto Giacometti – it has been reported that such work could sell for more than $100 million. 

The highlights of the collection will be on view in Hong Kong and London prior to a special exhibition of the entire collection in New York later this month.  The first offerings of the Schlumberger collection will be featured at Sotheby’s Impressionist and Modern Art auction on November 4, and the other works will be offered at the auction house’s contemporary art auctions through November 12.

For a glimpse into the exquisite Schlumberger collection, view here.

Duke University’s the Nasher Art Museum Receives Generous Donation from Alumnus

Posted in Art Finance

Last week, Nasher Art Museum, the museum of my alma mater, Duke University, received a generous $1 million donation from Dallas entrepreneur and collector, Derek Wilson (Duke, Trinity College ’86; Fuqua School of Business ’90) and his wife Christen, an avid connoisseur of art and fashion in her own right.  I worked at the museum (before being named after Raymond D. Nasher, Duke alumnus, Trinity College ’43, collector and benefactor) when it was an intimate space, nestled in the academic buildings on East campus.  The gallery has grown exponentially since I was there.   Now a true museum, the gallery is centrally located along Campus Drive with room for outdoor sculpture and a parking lot!  When I worked at the museum, the main gallery space was filled with traditional medieval and renaissance works, and contemporary exhibits were reserved only for the downstairs space (which although small in square footage had great vertical height with cathedral ceilings).

My how times have changed.

As I recall from my most recent visit to the Nasher, now the focal point of the collection is the modern/contemporary art.

Wilson and his wife are avid collectors of modern art and have done a lot to support a number of new and up and coming artists.  It is reassuring to see modern day benefactors cultivating new artists just like the Medici family in old Florence.  Collectors should not just rely on an artist’s posthumous fame as a reason to collect their work but should invest in living artists too.  It will be interesting to see what Wilson’s infusion of cash will bring to the museum.  Hopefully some home grown student artists will receive support.

Lucky for the Blue Devils, the million dollar donation to the museum was made by Wilson in tandem with his father, alumnus Gary L. Wilson (Duke, Trinity College ’62), who has also donated $2 million to the University for the building of, among other things, athletic buildings.

Collateral Damage: Mexican Drug-Money Law Impacts Mexican Gallery Owners

Posted in Art Finance

The Washington Post recently reported that a Mexican anti-money-laundering law that went into effect last year has unintentionally “frozen” the art market.

The anti-money-laundering law is aimed at “limiting the use of cash and requiring [certain] businesses to give more information to the government about their customers.”

Gallery owners and auction houses have become “collateral damage” as the new law is impacting their sales and operations.  Potential art buyers fear that their personal information will not be protected by the government or that they may be targeted if officials know that they spend “$1 million on a painting.”

Read the full article here.

Update in Terry Gilliam Infringement Lawsuit: Plaintiff’s Seek Preliminary Injunction

Posted in Litigation Issues

In August, we posted about the federal lawsuit filed by three street artists against film director (and Monty Python actor) Terry Gilliam for allegedly plagiarizing their mural in his latest movie, The Zero Theorem.  Read post here.

On September 22, plaintiffs filed a motion for a preliminary injunction asking the court to bar defendants, including Gilliam, from further distributing images of the mural used in the film pending a trial on the merits of their infringement claim.

According to plaintiffs, images of the mural shown in Gilliam’s film have been used to promote the film and are featured prominently in the film’s official trailer.  If granted, the preliminary injunction could prohibit defendants from using images of the mural in their promotion of the film, and/or delay or halt release of the film until the case goes to trial.

The court is scheduled to hear plaintiff’s motion on October 1.

Below are images from the plaintiff’s mural (“Copyrighted Work”) and the mural used in Gilliam’s film (“Infringing Work”).

Copyrighted Work Infringing Work
                       Copyrighted     Infringing

The Art Loss Register: A Significant Deterrent To Art Theft

Posted in Art Recovery/Theft

For those not already familiar with The Art Loss Register (“ALR”), I thought this would be a helpful albeit brief introduction to the ALR and the key services the London-based company, International Art and Antique Loss Register Limited, offers to art dealers, art fairs, auction houses, insurers, law enforcement agencies, museums, and private individuals.

The ALR is recognized as the “world’s largest private database of lost and stolen art, antiques and collectables.”  The ALR offers various specialized services from item registration to search and recovery services to the art trade, collectors, insurers, and worldwide law enforcement agencies.  According to the ALR website, the company efficiently delivers its services by utilizing state of the art information technology and a worldwide team of specially trained professional art historians having a diverse range of language capabilities as well as specialties in antiquities, modern art, and old masters.

There are two primary aspects to the company’s business—(1) the ALR serves as a significant deterrent to art theft by encouraging the registration of items of valuable possession directly on the database and the expansion of checking searches; and (2) the ALR operates a recovery service for the return of art work to the rightful owner by providing a due diligence service to sellers of art and being the worldwide focus in the case of any suspicion of illegitimate ownership.  More recently, the company has expanded its recovery service to include negotiating compensation to victims of art theft and the legitimizing of current ownership.

With the existence of the ALR, criminals are very well aware of the risks when they try to sell stolen art work.  Impressively, the ALR’s renown in the stolen art field has enabled the business to play a crucial role in the recovery of in excess of $320M worth of stolen works.

 

Corcoran Gallery of Art Will Be Dissolved, Officially

Posted in Litigation Issues

In July, we posted about the Save the Corcoran Coalition, a non-profit corporation seeking to intervene in certain legal proceedings surrounding the future of the Corcoran Gallery of Art. Read post here.

On July 21, the D.C. Superior Court ruled that nine members of the advocacy group be admitted as intervening parties in the proceeding launched by the Corcoran Gallery to revise its 1869 charter.   Read more here.

Despite the efforts of Save the Corcoran, on August 18 the court “upheld the financially failed institution’s plan to be taken over by the National Gallery of Art and George Washington University.”  Read more here.

“Blatant Misappropriation”: Terry Gilliam Sued for Alleged Use of Street Mural in His New Film

Posted in Litigation Issues

On August 12, 2014, a trio of street artists filed a lawsuit in federal court against film director (and Monty Python actor) Terry Gilliam for allegedly plagiarizing their mural in his latest movie, The Zero Theorem.

The mural, or “Copyrighted Artwork,” was painted collaboratively by the artists in 2010, in the zona de graffiti on Fitz Roy Street in Buenos Aires.

Picture A

Gilliam’s film was shot in Romania in 2012; it tells the story of an eccentric computer genius who lives in a burnt-out partially converted chapel.  The chapel exterior features the “infringing mural,” which the plaintiff-artists claim is a “blatant misappropriation” of their work.

Picture B

The artists allegedly registered the mural with the Copyright Office in Argentina in November 2013, approximately one year after Gilliam’s film was shot.

Must-See Exhibition In Southern California This Summer And Fall

Posted in Current Art Exhibits

This past weekend I ventured out to the California Science Center in Exposition Park near downtown Los Angeles.  I took in the much anticipated Pompeii:  The Exhibition (currently running through January 4, 2015) featuring over 150 exquisite artifacts on loan from the Naples National Archaeological Museum in Italy and was not disappointed.  The exhibition offers attendees a unique glimpse into the daily life and tragic end of this ancient Roman society.  Some of the featured objects include ancient Roman coins, wall-sized frescoes, marble and bronze sculptures, gladiator armor, jewelry, and full body replica casts of the volcano’s victims.

Prior to the disastrous eruption of Mount Vesuvius in 79 A.D., Pompeii had 25,000 inhabitants and was considered a very cultured and vibrant city on the Mediterranean with an abundance of architecture, complex infrastructures, and precious works of art.  With the eruption of Mount Vesuvius, the surrounding landscape in Pompeii had changed forever.  On August 24, 79 A.D. within a period of 24 hours, Pompeii was buried entirely under 12 feet of ash and stone.  It was not until the eighteenth century in which this time capsule of a preserved ancient city was discovered under the ash and stone.

Today, large-scale excavation of Pompeii (a quarter of a square mile) has ceased and about one-third of the city remains underground.

If you are in the Los Angeles area this summer or fall, you will not want to miss this fascinating exhibit.  After you visit the exhibition, I highly recommend a visit to the Getty Villa, which is modeled after a first-century Roman country house preserved by the ash of Mount Vesuvius.