Art Law Blog : New York Art Law Lawyer & Attorney : Fox Rothschild Law Firm : Theft, Intellectual Property, Institutional Negotiation : Manhattan, New York City

A wooden carving of Jesus on the cross by Michelangelo, which was presented to Pope Benedict XVI, exhibited at the Italian parliament, seen by thousands, and even  may have landed in the National Gallery in Washington as a way of honoring President Barack Obama, may be a fake.

The allegedly fraudulent work, which was purchase for about 3 million pounds from an art dealer in Turin, was presented by the dealer as an authentic Michelangelo.  However, according to this article in  The Telegraph http://www.telegraph.co.uk/news/worldnews/europe/
italy/6833354/Michelangelo-figure-may-be-a-fake.html, multiple experts are not fooled.

Perhaps the strongest statement the Telegraph article was from Tomaso Montanari, an art history professor at Naples University, who said it was "clearly not" a Michelangelo.

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The blockage discount is a legal principle for adjusting the fair market value of art when there is a significant volume of art by the same artist at issue. In re Warhol, No. 824/87, 1994 WL 245246 * 1 (Surr. Ct., N.Y. Co. 1994).  The In re Warhol court summarized a blockage discount as follows: If an immediate sale of a block of art would depress the market, the value of the block cannot be determined by totaling the fair market value of its individual components as of a specific date. Instead, a percentage discount must be applied, based upon: (i) the nature and number of artworks, (ii) the artist's marketability, (iii) the stability or permanence of the artist's reputation, (iv) the likelihood of appreciation or risk of depreciation in the art market and the artist's work, and (v) how long it would take for the various markets to absorb all of the works comprising the block.

The In re Warhol court applied the blockage discount to the 4,118 paintings; 5,103 drawings; 19,086 prints; and 66,512 photographs at issue. Other courts applying New York law have used the blockage discount for as few as 400 works. See Grosz v. Serge Sabarsky, Inc., 24 A.D.3d 264, 806 N.Y.S.2d 498, 500 (1st Dep't 2005).

In Grosz v. Serge Sabarsky, Inc., 24 A.D.3d 264, 806 N.Y.S.2d 498 (1st Dep't 2005), the Appellate Division, First Department confirmed the consistent use of the blockage discount principle under New York law. However, the Grosz court questioned whether it was appropriate to apply the discount when only 90 artworks were at issue. The court therefore remanded the case to the trial court for a hearing on this issue.

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The Boston Globe reported today that a retired criminal defense lawyer, Robert M. Mardirosian, was sentenced to seven years in federal prison for “possessing six Impressionist paintings that he knew were stolen in 1978 from a house in the Berkshires in what is believed to be the largest private art theft in Massachusetts history.” 

United States District Court Chief Judge Mark L. Wolf had strong words for the defendant, apparently telling him: “You started as a lawyer . . . [a]s far I'm concerned, you became a glorified fence." The case stems from charges that Mardirosian took six Impressionist paintings that had allegedly been stolen by one of his clients from a Berkshires house and stored them in Europe. 

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