Header graphic for print

Art Law

Recent Developments in Art Litigation and Art Finance

Toledo Museum Of Art To Return Four Antiquities Purchased From Art Dealer Accused Of Smuggling And Providing False Histories Of Provenance To Purchasers

Posted in Art Museums, Art Recovery/Theft, Litigation Issues

In a recent press release issued on September 22, 2015 by the Toledo Museum of Art (TMA), the museum announced that it will return four antiquities purchased from Subhash Kapoor, a New York City art dealer currently under investigation by the United States Departments of Justice and Homeland Security for illegally importing and selling stolen antiquities and other art objects and for providing false histories of prior ownership (provenance) to purchasers.

Kapoor, a naturalized United States citizen, was the owner of the Manhattan-based Art of the Past gallery for 35 years and sold Asian antiquities to museums and private collectors throughout the world.  Kapoor’s former gallery manager is also under investigation.  In October 2011, Kapoor was arrested in Germany and in July 2012 was extradited to India, where he is currently incarcerated and awaiting trial.

TMA had conducted a thorough investigation into all art objects that it had obtained from Kapoor, Kappor’s gallery manager, and the Art of the Past gallery.  According to the press release, TMA has cooperated fully with the United States officials’ investigation of Kapoor and his gallery manager, and has reached out to the Indian government through diplomatic channels for assistance in determining the provenance of select art objects in TMA’s collection.

As a result of the museum’s internal investigation, TMA determined that the provenance documents of four of the antiquities it had purchased from Kappor, Kapoor’s gallery manager, and the Art of the Past gallery, were falsified or otherwise could not be authenticated.  The four art objects set to be returned to India include as follows:

a stone stele of Varaha Rescuing the Earth (acquired in 2001); a previously announced return of a nearly 1,000-year-old bronze sculpture of the Hindu god Ganesha described as being from south India, Tamil Nadu (acquired in 2006); an 18th-century ornately patterned gold with enamel pandan box, described as being of Mughal origin (acquired in 2008); and Rasikapriya from the Samdehi Ragini, an 18th-century watercolor with gold on paper (acquired in 2010).”

TMA purchased a total of eight objects from Kapoor between 2001 and 2010 – all of which have been previously on public display at the museum.  In 2006 and 2007, TMA received 54 small ceramic objects donated by Kapoor and 64 works on paper donated by Kapoor’s gallery manager – with the exception of one, none of the donated objects have been on public display at the museum.  TMA is set to coordinate the return of the four antiquities and all of the donated objects with United States representatives of the Republic of India.  As for the four other art objects acquired from Kapoor by TMA, the museum has confirmed provenance and such objects will remain in its collection.

For further information about and images of the subject antiquities purchased from Kapoor by the TMA and donated to the TMA, please click here.

Experts Believe 19th-Century Painting Estimated At $800 At Auction Could Be An Authentic Rembrandt

Posted in Art Valuation

I came across an intriguing story reported by Artnet about an artwork described as a 19th-century “Continental School” painting and estimated at around $500 to $800 at auction that soared to a closing bid of $870,000 earlier this week fueling discussion that the competing bidders believed it could be an early Rembrandt.  The artwork eventually was sold to a European phone bidder.

A New Jersey auction house, which refers to itself as “The New Jersey alternative to the New York Auction House”, offered the oil painting entitled “Triple Portrait with Lady Fainting”.  In instances where experts are unable to support an “ironclad” attribution, especially where Old Masters are concerned, less specific or broad descriptions or labels such as “school of,” or “follower of,” or “circle of,” are typically used.

The painting had come to the attention of some Old Master dealers and is believed to be a long lost panel by a young Rembrandt.  In particular, the artwork was thought to be a depiction of Smell, which is part of Rembrandt’s series on the Five Senses.  The series dates back to around 1625 and is considered to be among Rembrandt’s first paintings, possibly completed while the artist was still a young student in Dutch painter Pieter Lastman’s studio.

Remarkably, a similar Old Master coup occurred last year when a successful bidder acquired an “unattributed painting at a Christie’s auction for $5,000, cleaned it up, spent some time and money on authenticating it as a work by John Constable, and then sold it at Sotheby’s” for a staggering $5 million.

Ownership Dispute Between The Getty And The Armenian Apostolic Church Over 13th-Century Manuscript Pages Resolved

Posted in Litigation Issues

As recently reported by ArtNews, the J. Paul Getty Museum and the Western Prelacy of the Armenian Apostolic Church of America have reached a settlement in a dispute over the rightful ownership of eight 13th-century manuscript pages separated from the Zeyt’un Gospels and in the Getty’s collection since 1994.

According to the museum, the medieval Zeyt’un Gospels are the earliest signed work of T’oros Roslin, the most accomplished master of Armenian manuscript illumination in the 1200s.  The Getty originally acquired the manuscript pages for $1 million.

Under the terms of the settlement, the Getty has acknowledged that the rightful owner of the manuscript pages is the Armenian Apostolic Church, and, in exchange, the Prelacy has donated the manuscript pages to the Getty “in order to ensure their preservation and widespread exhibition.”

Newest Private Collection Museum Of Contemporary Art, The Broad, Set To Open In Los Angeles

Posted in Art Museums, Current Art Exhibits

As recently reviewed by the New York Times, one of the most highly anticipated private collection museums of contemporary art in the United States is fast approaching its opening day this weekend.  The new museum is named simply, The Broad, and is housed in a $140 million, striking three-story building with a bone-white colored honeycomb facade designed by the renowned architectural firm Diller, Scofidio + Renfro, in the Bunker Hill neighborhood of downtown Los Angeles.  The Broad holds the contemporary art collection of some 2,000 works owned by Eli and Edythe Broad, two of the leading philanthropists in Los Angeles.

The inaugural display at The Broad is intended to exhibit the Broad’s impressive collection in representative form.  This is made evident by the museum’s founding director and chief curator Joanne Heyler’s installation of some 200 works chronologically on the new building’s skylit third floor, starting with classic pieces by the artists Jasper Johns, Robert Rauschenberg and Cy Twombly.  A small gallery space is devoted to Andy Warhol and a larger one to Roy Lichtenstein, a Broad favorite, as is his successor in formally polished Pop, Jeff Koons.  It has been reported that the Broads have the greatest number of Koons’ works in private hands.

With a reported generous $200-million-plus endowment and additional funds for acquisitions of works, The Broad is well positioned for the future and will be able to do a lot more buying to add to its already sizable, well curated contemporary art collection.

It is notable that the Broads have always viewed their art holdings as a public asset that they make accessible through an active institutional loan program.  In particular, the Broads see their holdings as a lending library, with works regularly departing for other museums and returning.  It is believed that with this “traffic flow, enhanced by the arrival of new acquisitions,” people should be encouraged “to make repeat visits, knowing they are likely to see new things each time.”

Art Stocks: A Volatile Market

Posted in Art Finance

In August 2015, the combined market value of global listed art industry companies fell 21.9%.SASI_vs_SP_09_2005-01_2015

The Skate’s Art Stocks Index is designed to benchmark publicly traded companies that derive most of their revenues and profits from art assets and/or servicing art and collectibles markets around the world.

Only 3 out of 17 stocks included in the Index produced positive returns in August, but all 3 stocks (Artnews S.A., artnet.com AG, and MCH Group) are trading below their closing prices at the end of last year.  Skate’s reported that the worst performers in August were Shutterstock, Etsy, and Demand Media that each had significant negative returns this month.

The Index also demonstrates that all of the recent IPOs from the art industry are trading well below their IPO prices, which suggests art stocks are being impacted by market volatility.  Read more here.


Inaugural Seattle Art Fair A Success With Tech Industry Boost

Posted in Art Valuation, Current Art Exhibits

After this past weekend’s close of the Seattle Art Fair, the Emerald City has been catapulted into the international art scene having been categorized for so long as a regional art center.  Among the more than 11,000 who attended the Seattle Art Fair, Paul Allen, billionaire co-founder of Microsoft and one of Seattle’s major cultural patrons, walked the aisles searching for artwork to add to his sizable private art collection.

As a regular visitor to the Venice Biennale and founder of the inaugural Seattle Art Fair, Allen was inspired to create an “art showcase in his hometown that would import a sophisticated, international art scene.”  The Seattle Art Fair, which ran from July 30 through August 2, 2015, was an opportunity for local artists and gallery owners to show their artwork on a larger stage.  There were 62 galleries from all over the world set up at the fair.

The inaugural fair was a success with some big-ticket sales, including a work by the Chilean artist Iván Navarro that fetched over $100,000 at the Paul Kasmin Gallery.  Works by Oscar Murillo and Christopher Williams likewise fetched five and six figures.

With an economy shaped by tech giants Amazon and Microsoft, the affluent in Seattle are growing wealthier than in any other U.S. city, including New York and San Jose, California, according to a recent study conducted by the Brookings Institution.

But, as the New York Times reports, this “tech-fueled growth does not necessarily add up to support for the arts.”  The tech industry needs to be shown what to appreciate about art.

According to the Seattle Art Fair’s website, the inaugural fair showcases “the vibrant culture and diversity of the Pacific Northwest by building on the region’s existing momentum to create a truly unique, innovative art event that further establishes Seattle as an influential player in the global art landscape.”  Indeed, after the success of this year’s fair, art collectors and enthusiasts alike can be assured that the Seattle Art Fair will most certainly be back next year.

Smuggled $27.4 Million Picasso Masterpiece Seized In Corsica

Posted in Art Recovery/Theft

As recently reported by ArtNews, French customs officials on the island of Corsica have seized a $27.4 million painting by Pablo Picasso entitled Head of a Young Woman (1906) that was banned from leaving Spain.  The prized painting had been declared a cultural treasure by a Spanish court back in May.

Corsican authorities had been tipped off about the attempted smuggling of the Picasso masterpiece en route to Switzerland.  According to the authorities, a search of the boat’s cargo revealed documents confirming that the artwork was of cultural importance and that it was leaving its home country of Spain without any legal permission.

The smuggled Picasso oil painting is from the artist’s “Rose Period” and features light pinks and beiges and is particularly prized because it shows Picasso’s shift into a Cubist style.


Restituted $39 Million Klimt Painting Sold at Sotheby’s London In June Will Be On Display For A Short Time Next Year

Posted in Art Museums, Art Recovery/Theft, Art Valuation

As recently reported by Artnet, there has been quite a bit of speculation surrounding the buyer’s identity of Austrian artist Gustav Klimt’s painting entitled Portrait of Gertrud Loew-Felsövanyi (1902) sold at Sotheby’s London back in June for $39 million.  Recent credible reports confirm that the buyer is British billionaire businessman Joe Lewis, who came into his fortune by way of foreign exchange market (forex) trading in the early 1990s.  Lewis’ art collection is estimated to be worth around $1 billion and includes works by Picasso, Matisse, Lucian Freud, sculptor Henry Moore, and, of course, Klimt.  Lewis is known to have a preference for Austrian modernism.

According to Artnet, the provenance of the Nazi-looted Klimt painting was determined just recently before the Sotheby’s London auction in which the painting was returned to the subject’s granddaughter.  Shortly thereafter, it was decided by the Felsövanyi family along with the Klimt Foundation to consign the artwork to Sotheby’s and share the profits.

The recent sale of the Klimt artwork has reignited a long debate back in Austria as critics of current restitution practices expressed their concern that “restituted masterpieces all too often disappear from public view as they go to private hands.”  Artnet notes that because public institutions are unable to raise the necessary funds to acquire expensive important artworks, these masterpieces often tend to find their way into either freeports or the art collections of the very affluent.

The painting will be on loan to the Neue Galerie in New York for an exhibition scheduled for next year entitled Women of Vienna’s Golden Age 1900-1918, which will run from September 2016 to January 2017.  The Neue Galerie is a museum dedicated to early twentieth-century German and Austrian art and design.

Although the Klimt painting will be on display for a short time in New York later next year, the Austrian media predicts that the chances of it becoming permanently publicly accessible are “slim.”

Global Art Market On Brink Of A Leverage Boom To Drive Further High-End Art Sales

Posted in Art Finance, Art Intelligence

Skate’s Art Market Notes for July highlight that ultra-high net-worth individuals (UHNWIs) are purchasing more art and the trend is likely to continue.  According to high-level estimates of Skate’s (based on its extensive data mining), only about 11% of global UHNWIs with assets in excess of $100 million are currently invested in art.  These figures demonstrate that there is significant growth in the art ownership penetration ratio among global UHNWIs and a significant growth upside potential remains.

Skate’s hints that with the release of its Global Art Lending Report scheduled for next month, the impressive growth of the art lending business over the past few years will be revealed and a “perfect stage” for significant growth in global art lending will be portrayed based on the following factors:

(1) very low share of art assets leveraged today; (2) historically low interest-rate environment; (3) unparalleled growth in high-end art market liquidity; and (4) quickly expanding availability of stand-alone art lenders.”

Skate’s observes that with the above four factors working in synergy together, the art market is on the brink of a “leverage boom” that should drive further high-end art sales, supporting both supply (e.g., forced liquidation of art collateral) and demand (e.g., availability of leverage for key art purchases) sides.  Skate’s points out that the United States, which is the predominant art market globally (see Exhibit 1), offers the world’s preeminent infrastructure for art lending in view of simple and efficient liens registrations for art assets via a Uniform Commercial Code filing procedure that is “increasingly used in the global art trade to secure pledge over art as loans collateral.”

To access Skate’s latest Art Market Notes for July, including the World’s Largest Art Markets by High-End Art Auction Volumes for 2014 (Exhibit 1), click here.

Long Disputed Painting Reclaimed As An Authentic Rembrandt

Posted in Art Conservation/Restoration, Art Museums, Current Art Exhibits

An intriguing story recently appeared in the International New York Times regarding a long disputed painting that was recently found to be an authentic Rembrandt after all.  The controversial painting was cut down the middle and through its center in the 19th century and was likely to be sold as two Rembrandt paintings.  During the next 40 years or so, the painting was pieced back together with an entirely different canvas and covered with paint to hide the previous separation.

In 1898, the director of the Mauritshuis Royal Picture Gallery (“the Mauritshuis”) in The Hague in the Netherlands displayed the painting in the museum in which it was entitled “Saul and David,” one of Rembrandt’s most significant biblical works.  Decades later in 1969, a leading Rembrandt authority discredited the painting, after which the painting hung for years in the museum by an accompanying label entitled “Rembrandt and/or Studio,” which was in effect a “serious demotion.”

After several years of close examination and meticulous restoration by the museum’s own team of conservators along with support from researchers from various outside institutions (i.e., Delft University of Technology, the National Gallery of Art in Washington, the Netherlands Institute for Art History, and Cornell University), the Mauritshuis has recently “reclaimed the painting as an authentic Rembrandt, saying it was painted in two stages by the master’s own hand, one of hundreds of surviving Rembrandt paintings.”  It is believed that Rembrandt began the work in 1645 and completed it in 1652.

Shortly after revealing its findings early last week, the Mauritshuis opened its summer exhibition entitled “Rembrandt?  The Case of Saul and David.”  The exhibition is focused entirely on this single work, which depicts the “young hero David playing a harp for an elderly King Saul, who is moved by the music and uses a curtain to wipe away his tears.”  According to the museum’s website, the exhibition “shows how, using the latest technology and research methods, fascinating discoveries were made about the creation, the history and the attribution of the painting.”

To see photos of the painting before and after the meticulous restoration and read further on the restoration and attribution process, click here.