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Art Law

Recent Developments in Art Litigation and Art Finance

Summer Exhibition “The Keeper” Opens This Week At The New Museum In New York City

Posted in Art Museums, Current Art Exhibits

The highly anticipated “The Keeper” exhibition opens at the New Museum in New York City on Wednesday, July 20, 2016.  The summer exhibition is installed throughout four floors of the museum and is dedicated to the “act of preserving objects, artworks, and images, and to the passions that inspire this undertaking.”

According to the New Museum’s Exhibitions webpage, as a “reflection on the impulse to save both the most precious and the apparently valueless, [the exhibition] will bring together a variety of imaginary museums, personal collections, and unusual assemblages, revealing the devotion with which artists, collectors, scholars, and hoarders have created sanctuaries for endangered images and artifacts.”

The focus of the exhibition will be Ydessa Hendeles’ Partners (The Teddy Bear Project) (2002), which comprises a vast display of over 3,000 family album photographs of people posing with teddy bears as well as vitrines of antique teddy bears.  In Hendeles’ project, the teddy bear serves as a “metaphor for the consolatory power of artworks and images and underscores the symbiotic relationship that ties people to their objects of affection.”

In a summary of the upcoming exhibition on its webpage, the New Museum explains “[t]hrough a series of studies and portraits that spans the twentieth century, ‘The Keeper’ will tell the stories of various individuals through the objects they chose to safeguard, exposing the diverse motivations that inspired them to endow both great and mundane things with exceptional significance.”

“The Keeper” is curated by Massimiliano Gioni, the museum’s artistic director, and his team of curators, and will run through September 25, 2016.

 

Return Sales Of Looted Art To Nazis And Their Families Prompt Government Investigation In Bavaria

Posted in Art Recovery/Theft

On the heels of a shocking report last month that artworks stolen from Holocaust victims were returned to Nazis and their families after World War II, the Bavarian Parliament art committee, Kunstausschuss, has demanded an accounting from government officials on the extent of the system to resell art to Nazi families and a count of the total number of looted artworks that remain in government possession that could be returned to the rightful heirs.

The findings were released by the Commission for Looted Art in Europe, a London-based non-profit that researched the archives for certain rightful heirs and made critical discoveries.  Among other information released, in some instances, artworks were sold at significantly lowered prices to the families of Nazi officials instead of being restituted to the rightful heirs.  In other instances, the artworks were kept by the state of Bavaria.  The study reveals that state-owned museums in Munich profited from art looted by the Nazis at least until the 1990s.

In a statement, the Commission’s co-chair Anne Webber said:  “The investigation must include clarification of the provenance of the artworks so that the rightful owners of any works that were looted can be identified and assured of restitution or compensatory justice.”  Webber further added that the Bavarian government “must also ensure that all documents from the State Paintings Collection and other relevant government bodies are published and made fully accessible.”

The Commission had also announced the immediate resolution of the restitution claim that had initially led to the larger investigative probe.  The Commission’s investigation was prompted after the rightful heirs of collectors Gottlieb and Mathilde Kraus, who were trying to recover about 160 artworks stolen from the Krauses, had sufficient reason to believe that some of their paintings would be in the state-owned museum in Munich.

According to the report, “[r]ecords show they were handed over to Bavaria by the US in 1952 for purpose of restitution” and “[t]o their shock, they found they had instead been given by the Bavarian State in the early 1960s to Henriette Hoffmann-von Schirach, daughter of Hitler’s close friend and photographer, Heinrich Hoffmann, and wife of the notorious ‘Gauleiter’ [Hitler’s district governor] of Vienna, Baldur von Schirach.”

For further information about how this murky chapter of history came to light and the government investigation, see Bavarian Parliament Will Investigate Claims that Looted Art Was Returned to Nazis and Nazi Art Loot Returned … to Nazis.

 

Artist Disavows Painting; Sued for $5 Million

Posted in Art Authentication, Litigation Issues

Scottish artist Peter Doig claims he didn’t paint the painting depicted below, and now he is forced to prove it at trial.  The New York Times recently reported on this strange case of art authentication, involving Doig’s disavowal of the painting and alleged mistaken identity.  Read full article here.

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Image: WHITTEN SABBATINI/NYT

The owner of the painting is a former corrections officer who alleges that in 1975 he purchased the painting from Doig, who was incarcerated at a Canadian detention facility at that time.  Doig denies having ever been near the detention facility, or ever being incarcerated. The lawsuit is currently pending in the U.S. District Court for the Northern District of Illinois.

Family Art Dispute Over $3 Billion Art Collection In Europe

Posted in Art Valuation, Litigation Issues

The Wall Street Journal recently published an in-depth story on the Goulandris art collection, which is currently in the middle of one of the largest and most complex legal disputes over ownership of art in Europe.

The story involves a private art collection valued as much as $3 billion that has been mostly out of public view over the past two decades, an offshore company used by a secret seller to put up artwork for auction, and a dispute that essentially boils down to a non-existent will and an inscrutable one.

The late Greek shipping mogul Basil Goulandris and his late wife, Elise, amassed one of the world’s most significant private art collections, which included several hundred pieces of treasures by a number of renowned artists such as Picasso, van Gogh, Cezanne, Monet, Degas, Pollock, and Balthus.

For further information on this intriguing saga involving the Goulandris art collection, visit The $3 Billion Family Art Feud.

Owner Of Disputed Modigliani Painting Firmly Believes The Work Is Not Nazi Looted Art

Posted in Art Authentication, Art Recovery/Theft, Art Valuation, Litigation Issues

In recent art world news is a story about a treasured 1918 oil painting by Amedeo Modigliani of a seated chocolate merchant in a hat and tie holding a cane (“Seated Man with a Cane”).  Art dealer and billionaire David Nahmad is principal of the Nahmad holding company (International Art Center) that purchased the work at auction in 1996 and has owned it since then.

The grandson of a Jewish antiques dealer, however, claims that the Modigliani painting is the same work that was stolen from his relative’s shop in Paris during the Nazi occupation and sold off over 70 years ago.

For nearly five years, the grandson, Philippe Maestracci, and the Mondex Corporation, a company specializing in the recovery of looted art on behalf of beneficiaries, have pursued a claim in New York state and federal courts for the work, which was once estimated to be valued at around $25 million.

Nahmad, a scion of a family of international art dealers, remains determined that he will not settle the case.  In support of his position, the art dealer relies on an obscure French court document dated 1947 that he asserts raises doubt as to whether his painting is the same Modigliani painting that antiques dealer, Oscar Stettiner, had tried to recover after the Second World War.  The court document, which was filed in connection with Stettiner’s claim in 1946 to recover the painting, describes the work as a “Modigliani self-portrait” and not as a painting of a chocolate merchant.

Conflicting evidence cited by Maestracci includes the provenance listing when Nahmad’s holding company attempted to sell the disputed painting through Sotheby’s in 2008.  The auction house listed Stettiner as a possible previous owner of the painting and indicated that the painting had been sold anonymously between 1940 and 1945.

Nahmad is determined to fight on in the courts, but has said if it is proven that the painting is looted art by the Nazis, he will return it.

For further information on this prolonged dispute since 2011, see Dealer’s Estate Sues Nahmad Gallery Seeking Return of Modigliani Portrait and The Art of Secrecy.

Are Free Ports Transparent And Good For Art?

Posted in Art Finance, Art Intelligence

The New York Times recently featured an interesting article on the rapid growth of free ports around the world used by collectors and dealers for the temporary storage of art works.  Many would be surprised to learn that more than a million of some of the most treasured art works ever created, such as ancient Rome treasures, museum quality paintings by old masters and an estimated 1,000 works by Picasso, are crated or sealed in tight storage vaults within the walls of such storage facilities.

With the rise in the price of art, masterpieces and other exquisite art works are increasingly being stored away in free ports by collectors who are interested in seeing such works appreciate in value rather than filling up wall space to be viewed.  As collectors become more financially savvy with art being treated as a capital asset in their portfolios, free ports have effectively become the support for all of this.

This recent upsurge in the use of free ports by collectors has led to concerns over the use of such storage spaces for illegal activities as well as worries in the art world on the effect such wholesale storage has on art itself.  Within the last few decades, a small group of free ports have increasingly served as “storage lockers” for the wealthy.  Free ports are geographically located in tax-friendly countries and cities and offer attractive savings and security to collectors and dealers alike.

In addition to the at least four major free ports in Switzerland that specialize in the storage of art and other luxury goods, such as wine and jewelry, there are four more free ports around the world, including Singapore (2010), Monaco (2012), Luxembourg (2014), and Newark, Delaware (2015).

Out of concern that these rapidly growing private storage spaces could become havens for various illegal activities (i.e., contraband, money laundering, etc.), Swiss authorities initiated an audit back in 2012, the results of which revealed a significant increase in the value of goods stored in some warehouses since 2007 with an increase in high value goods such as art.  The audit estimated that there were more than 1.2 million works of art in the Geneva Free Port alone in which some of the art has not left the facility in decades.

Many in the art world remain critical of free ports.  With many valuable masterpieces being stored outside of public view, critics argue that works of art are created to be viewed.  Those who disagree point out that paintings are not a public good as much art work was created as private property. Others say that free ports represent a financial system in which investors lack a connection with the art they purchase, but recognize that the storage warehouses enable responsible collectors to manage their art collections and limited wall space.

Collectors and dealers often decide to utilize the free ports for the storage of their art for more common reasons than tax avoidance.  Some collectors and dealers simply have no more room in their homes and galleries.  In a free port, their valuable art works are protected in climate-controlled environments behind fire-resistant walls and often under video surveillance.  Some of the free ports even have viewing rooms where collectors can view their art and show it to potential purchasers.

According to an officer of the Geneva Free Port, as a result of the audit, the Swiss have been working to address concerns over the lack of transparency.  As of this September, all storage contracts will require clients to allow inspections of any archaeological artifacts they would like to be stored at the facility.

Only time will tell whether additional free ports across the world will take steps towards increasing transparency as to inventory and ownership as collectors and dealers continue to store their valuable art works in such warehouse facilities.

Gagosian Gallery And Qatar Royal Family’s Agent Settle Dispute Over Ownership Of Prized Picasso Sculpture

Posted in Litigation Issues

As an update to an earlier post featured on the Art Law Blog relating to a dispute between the Gagosian Gallery and Qatar Royal Family’s Agent over the ownership of Pablo Picasso’s plaster “Bust of a Woman” sculpture, it has been reported this week that a settlement was reached between the parties.

Details of the settlement were not disclosed in a filing earlier this week in New York federal court, so it remains a secret as to who now owns the 1931 prized Picasso sculpture of the artist’s then French muse/mistress, Marie-Thérèse Walter.

The sculpture was considered a treasured possession of Picasso’s daughter, Maya Widmaier Picasso, who was born from the artist’s affair with Walter.

As blog readers may recall, prominent New York art gallery owner Larry Gagosian claimed that he had agreed to purchase the sculpture for $106 million in 2015 to resell it to a then undisclosed New York art collector who has since been identified as New York billionaire Leon Black.  However, an agent for the Qatar Royal Family claimed that they had already consummated a deal in 2014 to purchase the sculpture for 38 million euros (about $47.4 million at time of sale) from Widmaier Picasso through a transaction that was negotiated by her son.

Both sides had filed lawsuits earlier this year in New York federal court in Manhattan.  In a three-paragraph order that had issued on Monday, the U.S. District Judge William Pauley ruled:  “It having been reported to this court that these actions have been or will be settled, these actions are discontinued without costs to any party.”  Pursuant to the order, either party can request the court to reopen the dispute within 30 days.

The cases are Gagosian Gallery Inc. v. Pelham Europe Ltd., and Pelham Europe Ltd. v. Gagosian, 16-cv-00214 U.S. District Court, Southern District of New York (Manhattan).

Frieze New York 2016 Runs Through May 8, 2016

Posted in Current Art Exhibits

If you happen to be in the New York City metro area this weekend, you will not want to miss Frieze New York 2016 in its fifth edition in Manhattan. Frieze New York 2016 features 202 galleries from 31 countries around the world and runs through this Sunday.

According to Frieze’s website, “Frieze New York 2016 brings together the world’s leading galleries, innovative curated sections, a celebrated series of talks, site-specific artist commissions and the city’s most talked about restaurants, all in a bespoke structure overlooking the East River in Randall’s Island Park, Manhattan.”

For additional information on this world-class art event, check out Frieze’s informative website and the media’s coverage of Frieze New York 2016.

Billionaire’s Vast Private Art Collection To Be Housed In New Paris Museum

Posted in Art Museums, Art Valuation

In recent art world news, it was reported that one of the world’s largest private art collections is to be housed in a new Paris museum in close proximity to the Louvre.  The art collector behind the enormous collection worth $1.4 billion is luxury goods billionaire, François Pinault, who also owns Christie’s auction house.

Pinault has amassed a vast collection of modern art work from various internationally renowned artists such as Mark Rothko and Damien Hirst.  The collection is presently displayed at Pinault’s private museums (i.e., Palazzo Grassi, Punta della Dogana, and the Teatrino di Palazzo Grassi) in Venice.  For decades up until now, the collector had been unable to locate a suitable home for his collection in Paris.

The new museum is near the Pompidou Centre, which is home to Europe’s largest contemporary art collection.

French businessman and France’s wealthiest man, Bernard Arnault, opened his own Frank Gehry-designed Louis Vuitton Foundation museum for his art collection in October 2014.  With Arnault’s museum opening and the recent announcement of Pinault’s new museum, the City of Light is transforming into an emerging contemporary art center.

Pinault’s new museum is expected to open in 2018 and will work in tandem with the collector’s other cultural institutions in Venice.

 

Metropolitan Museum of Art Facing $10 Million Deficit

Posted in Art Museums

The New York Times recently reported that the Metropolitan Museum of Art is facing a $10 million deficit and has planned a 24-month financial restructuring, which will include staff and programming reductions.

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Image: Robert Wright for The New York Times

According to the museum, its current financial situation stems from several factors, including a decline in retail revenue, an increase in staff salaries, and the requirement that the museum pay $8.5 million a year in debt service on $250 million in bonds issued for capital infrastructure work.  Visitors are also paying less to visit the museum.

Museum officials expect the restructuring will restore financial stability to the institution.

Read full article here.