As recently reported in this article, earlier this week at Christie’s Postwar and Contemporary Art sale in New York, a 1969 painting by Francis Bacon entitled “Three Studies of Lucian Freud” fetched $142.4 million. This week’s sale of the Bacon painting sets a new world record for most expensive artwork ever sold at auction. Edvard Munch’s “The Scream” set a prior world record when it was sold for nearly $120 million at Sotheby’s in 2012.
As reported in my previous post regarding the Metropolitan Museum of Art, there has been recent litigation over the Met’s ”suggested” $25 admission fee, which many characterize as exorbitant and violative of the 1893 Act which permitted the museum to operate rent free under certain conditions including a primarily free admission policy. In a recent ruling as reported by Bloomber News, Judge Kornreich declared that “[a]ctual access, provided in a way that ‘nudges’ visitors to donate, is not incompatible with the 1893 Act.” Despite this victory for the Met, the case will go forward in connection with the claims that signage regarding the suggested fee is deceptive and misleading.
When I was younger the admission fee to the Met was $12, and I felt like it was more than just a suggested donation amount, but rather a required entry fee. Back then I thought that $12 was exorbitant – $25 seems outrageous. I wonder how many people actually pay the full $25 and how much revenue is generated from these fees.
In 2009 the restitution laws of Austria were amended to include works of art that were sold to the government at a discount due to an export ban on art. In a recent case involving a valuable frieze inspired by Beethoven’s Ninth Symphony that was crafted by Gustav Klimt in 1902, a panel of art and cultural experts may elect to return the prized work to the heirs of Erich Lederer. The Lederer family fled Austria during its Nazi occupation. Following the war, in exchange for the sale of the frieze to the Austrian government at a 50% discount, Erich Lederer was permitted to export other artwork out of the country despite the export ban. Now in 2013, the Lederer heirs have asserted an ownership interest in the frieze arguing that the sale to the Austrian government was the product of extortion. It has been reported that the famous Klimt work was sold to the Austrian government in 1973 for $750,000 approximately half of its value at the time. Klimt is one of Austria’s most famous artists (his best known work being The Kiss). I have always been intrigued by the phantasmagorical quality of Klimt’s work (and it doesn’t hurt being a redhead myself that he showcased redheaded women). Although his artistry is a major tourist attraction, the change in the restitution laws in 2009 demonstrate a recognition that the cultural value of art cannot outweigh a rightful heir’s claim to art, especially work that was plundered by the Nazis during such a dark part of Europe’s history.
As an update to my July 26, 2013 post entitled, “Prominent Manhattan Art Galleries Deceived by New York Art Dealer Accused of Selling Forged Art Works by Acclaimed Artists,” New York art dealer Glafira Rosales pleaded guilty in mid-September to charges of wire fraud, money laundering, and tax evasion, as discussed in this recent article. To date, Ms. Rosales is the only person who has been indicted in connection with the art fraud in which non-authentic paintings were represented as the work of various Modernist masters. The art dealer is said to be cooperating with the federal authorities who expect further arrests.
An extraordinary bequest of eight French masterpieces created by Paul Cézanne from American collector Charles A. Loeser 85 years ago “to the President of the United States of America and his successors in office for the adornment of the White House” had become diverted more than 60 years ago. Such bequest certainly would have been the envy of any art museum throughout the world. As explained in this recent article, the tale of the eight Cézanne paintings is indeed an intriguing one still tangled with some puzzle pieces missing.
Presently, three of the Cézanne paintings are displayed in the National Gallery of Art while the remaining five are installed in the family quarters of the White House. The White House curator’s office has confirmed that the eight Cézanne artworks have never been displayed together as an ensemble, as directed by the Loeser bequest.
As a follow-up to my previous post regarding Detroit, many of you may have heard by now that the city filed for bankruptcy in mid-July. In recent weeks, there is more controversy over Detroit’s bankruptcy filing, which endangers the renowned art collection housed at the Detroit Institute of Arts (DIA). The art world has been in a tizzy since news hit the press that appraisers from Christie’s auction house had descended on the museum to evaluate the collection. Critics complained that Christie’s was a vulture preying on Detroit’s mismanagement. The critics agree with the Michigan Attorney General who as reported earlier issued a letter opinion stating that the collection of art was held in trust for the public and could not be used to payoff creditors. While early reports indicated that Christie’s appeared in Detroit at a creditor’s request, Christies has officially announced that it was asked to appraise a portion of the collection for Kevyn Orr, the city’s emergency manager.
Liquidation of the collection remains controversial as a fire sale of the works could wreak havoc in the art market. Further, local lawmakers in the Detroit metro area have vowed to repeal suburban property taxes which support the DIA if the bankruptcy results in use of the museum’s collection to satisfy the city’s debt. Despite the ongoing controversy, today, the DIA announced that it would not challenge the bankruptcy filing because the museum supports (excluding a plan to liquidate the DIA collection) efforts to rectify the city’s financial woes.
While I agree with the sentiment that the DIA collection should remain in Detroit, I can’t help but be reminded that it was unthinkable for many folks that the Barnes collection could ever be moved from its beautiful home in Lower Merion, Pennsylvania – and that happened.
As a follow-up to the Chris Brown suburban street art saga, according to recent reports the goblins have been removed not because Brown lost his legal battle but because the singer is looking to sell his Hollywood Hills mansion.
You know how fragile art can be, so make sure you’re properly covered for the extent of your art investment. Potential coverage for fine art differs widely based on the customer. Make sure you’re covered for all foreseeable disasters so your collection of masterpieces doesn’t slip between your fingers.
Paint thieves out of the picture
Some museums and private collectors occasionally forego policies that include theft insurance, citing their items as priceless and irreplaceable. The Isabella Stewart Gardner Museum, however, famously learned the hard way that theft insurance includes benefits other than replacement when it was robbed in March 1990.
Two thieves stole a Vermeer, three Rembrandts, a Manet, and a Degas, causing losses of more than $500 million for the museum. The museum didn’t have theft insurance, so it wasn’t immediately able to offer a large reward for the stolen art. More than 23 years later, the FBI finally is making strides to recover the stolen pieces. Had the museum more fully insured its pieces, the story might have been different.
Some insurance providers specialize in fine art and collectibles. Here are some examples of the kinds of clients specialized insurers cover: museums, cultural institutions, exhibitions, universities and colleges, commercial galleries, private dealers, personal and corporate collections, artists, conservators, framers, auction houses, and art consultants. Like you, these companies understand fine art’s fragility and value, and they have an interest in protecting it in the best way possible.
If you are a private collector, there are two main ways you can protect your art. Regardless of which you choose, you should have your collection regularly appraised so that you will be able to substantiate its value in the event of a covered disaster. Options for coverage are:
Scheduling an endorsement: Home insurance policies typically have strict limits on coverage for high-value items such as jewelry and fine art. Scheduling an endorsement is an effective way to increase the limit under your existing home insurance policy. If price is a factor, this is usually the more economical choice. Another advantage is that you’ll continue to work with your existing carrier.
A personal articles floater: If you have an extensive fine art collection, you may want to opt for a separate policy from a company that specializes in fine art or other collectibles. This policy typically comes without a deductible, covers the highest-value collections, and will value the art differently. After a covered event, the carrier will provide the full collectible value of the piece versus its actual cash value. This policy also typically covers items in transit, items stored away from home, and newly acquired items for up to 90 days.
Another plus: These carriers also typically employ art experts to help you best protect your collection from theft and damage from water, smoke, fire, and atmospheric conditions.
Museums, cultural institutions, and universities
If you are the curator or director of a cultural institution, you might want to consider even more specialized coverage options such as mysterious disappearance coverage and loss inventory coverage.
In 1975, the National Endowment for the Arts created an indemnity program to help minimize the cost of insuring U.S. artwork during international exhibitions. This program is an agreement between nonprofit, tax-exempt organizations and governmental units. The U.S. government can provide up to $750 million in coverage for a single collection. Even if your museum or cultural institution qualifies for government indemnity, you may want to purchase an additional policy from an art insurance provider to help you lower deductible costs and extend coverage.
If you own or run a commercial art gallery, you also may want to consider a business policy. This business policy typically includes coverage for commercial liability, business contents, and workers compensation.
Even if you can’t replace priceless art, you can return and restore it. Don’t let your masterpieces slip through your fingertips. Make sure they’re protected with the right kind of insurance. Don’t gamble with your art insurance. This is one instance in which it is very important to color inside the lines.
This article was contributed by Katherine Wood, contributor to the HomeInsurance.com Blog. The HomeInsurance.com blog serves as a resource center for insurance consumers and homebuyers across the country.
This posting is for informational purposes only. Fox Rothschild LLP is not endorsing HomeInsurance.com.
A New York art dealer was recently indicted by a federal grand jury on July 17, 2013 on numerous charges, including the sale of 63 works of forged paintings from 1994 to 2009 that the art dealer knew were forged, and false statements that were made regarding the authenticity and provenance of the paintings, as reported in this article.
At the art dealer’s arraignment last Friday, July 19, 2013, in the United States District Court for the Southern District of New York, Ms. Glafira Rosales plead not guilty to charges of money laundering, wire fraud, the filing of false tax returns and failing to report foreign bank accounts. According to this article, Rosales reportedly accumulated in excess of $33M from selling what she claimed were “unknown pieces” by well-known artists that were in fact forged art.
As set forth in the indictment, from the period 1994 to 2009 Rosales “engaged in a scheme to sell dozens of works of fake art” by acclaimed artists (i.e., Mark Rothko, Jackson Pollock, and Willem de Kooning), which “were never before exhibited and previously unknown”. The accused art dealer represented to the art galleries that the paintings were authentic, when “in truth and in fact, and as Rosales then and there knew the ‘Rosales Works’ were fake and were not by the hand of the artists that Rosales claimed that they were,” as alleged in the indictment.
The indictment further alleges that Rosales was not truthful to the galleries regarding the provenance of the art works and represented that some of the paintings originated from a Swiss client “who did not exist” and a Spanish collector “who never owned any of the Rosales Works”. According to the indictment, Rosales made these statements “with the knowledge and intent that they be repeated to purchasers and potential purchasers,” and such “fraudulent statements were material” to those purchasers.
According further to the indictment, victims of Rosales’ alleged massive art fraud paid out more than $80M collectively for the paintings that they later learned were forged.
If found guilty of the charges and convicted, Rosales could serve 20 years each on the money laundering and wire fraud charges as well as additional years on the tax charges. The federal government is also seeking the forfeiture of all assets traced to the sales of the forged art works.
It is not enough today for museum curators to simply assemble a selection of the works of the great Impressionists, such as Claude Monet, Edgar Degas and Pierre-Auguste Renoir, to attract the attention of over-saturated viewers, as reports this article. In order to obtain loans of coveted artwork from other preeminent museums and persuade those institutions to commit as touring venues as well as garner the interest of art savvy viewers, curators must create exhibitions that are innovative in their approach to the 19th century art movement that is Impressionism.
Curator Gloria Groom has accomplished just that with this summer’s "Impressionism, Fashion and Modernity" exhibit at the Art Institute of Chicago. The exhibition is considered the "biggest and most important Impressionist presentation" to be on display at the museum in two decades. It is believed that no previous show has examined the interrelationships between Impressionism, Fashion, and Modernity, in such an in-depth and large-scale as the Art Institute of Chicago’s exhibition.
This summer’s groundbreaking exhibition is co-organized by two of the world’s other institutions of renowned collections of Impressionism, the Musee d’Orsay in Paris and the Metropolitan Museum of Art in New York. Approximately 300 objects in all, including 75 paintings, 17 dresses, and a selection of fashion accessories, works on paper and related ephemera, comprise the not to miss art exhibit this summer in Chicago, which runs from June 26, 2013 through September 22, 2013.