In recent art world news, forty years after a 1967 painting by modernist painter Robert Motherwell had vanished, last week the “Untitled” work (now valued at $1 million) was returned to the foundation dedicated to the preservation of the artist’s legacy.  The painting is among dozens that were lost and believed to have been stolen when Motherwell had hired a moving company to relocate his artworks from one storage facility to another in 1978.  The Motherwell painting was discovered in an upstate New York garage by the son of a former employee of the moving company.

The person who returned the painting has not been identified by federal investigators who helped arrange the return of the work to the Dedalus Foundation.  Foundation officials said that the person was helping his mother sort through some belongings last October when he came across the painting and after inspecting same he noticed the artist’s name in faint pencil on the back of the orange, crimson, blue and black canvas.

The person conducted an online search for information about the artist and subsequently approached the foundation regarding the discovered painting.  The foundation matched up photos of the discovered work to photos of the stolen painting and concluded it was the same work.  The foundation then contacted the FBI and investigators in the art crimes unit established that the person’s father, who passed away in the 1990s, had in fact worked at the Manhattan-based moving company at the time the Motherwell works went missing.

The discovered painting has a few mold stains that can be removed, but the work is said to be in “good shape and had been stored correctly, upright and wrapped in plastic.”

After Motherwell passed away in 1991, nearly all of his paintings were deeded to the foundation.

Geoffrey S. Berman, the United States attorney for the Southern District of New York, who unveiled the painting at a news conference last week in Manhattan where the foundation took possession of the large 69-by-92 inch work said:

Today, dozens of works by Motherwell remain missing.  We hope that they remain in the same condition as this piece, and that anyone encountering these pieces in the market brings them to the attention of law enforcement.”

It was reported that authorities do not believe the son knew the painting had been stolen, but it did appear that the work had been purposely taken.  The foundation said that the back of the painting had marks where warehouse labels had been torn off.

According to Katy Rogers, director of the Robert Motherwell catalogue raisonné project, the person who had approached the foundation regarding the discovered painting had hoped to sell the work if it was authentic, but agreed to return it upon learning of the circumstances under which the painting had gone missing.

Motherwell was a 20th-century American painter, printmaker, and editor, who played a significant role in the Abstract Expressionist movement.  The late artist is well known as a member of the New York School, which also includes acclaimed artists Willem de Kooning, Jackson Pollock, and Mark Rothko.

The foundation will circulate the discovered painting in connection with its educational programs.

In recent art world news, the technology augmented reality (the cousin of virtual reality) has been making headlines in the media these days. Simply defined, augmented reality (AR) technology superimposes a computer-generated image on a user’s view of the real world hence providing a composite view.  It has been widely reported that AR technology promises to transform how we learn and interact with the real world and now this includes the art world.

Many already know that art has been a relative latecomer to the digital revolution in recent years. People become accustomed to associating the value of art to seeing such art in person.  As such, art galleries and museums still rely on special exhibitions for a significant share of their revenue.

ArtFinder, a London-based e-commerce start-up, has built an IMDb-type searchable digital catalog containing hundreds of thousands of artworks in the form of paintings, sculptures, and art-related media.  The site also includes “essays on artists, artworks and artistic movements, making it a useful (and free) reference resource for art discovery, while social features open up new opportunities for enjoying art.  It allows you to virtually collect and share your favourite artworks, and as users build up a profile that reflects their particular tastes, the system also generates further recommendations of what they might like.”

ArtFinder’s co-founder Chris Thorpe believes that “this element of recommendations, when combined with geo-location, adds a crucial element of serendipity to art discovery and keeps that physical connection to the real world which is so crucial to connecting emotionally with a piece of artwork.”

Artivive, a Viennese start-up recently founded in 2017, offers an easy to use AR tool that allows artists to create new dimensions of art by linking classical with digital art.  Artivive’s AR tool also enables museums an innovative way for visitors to interact with exhibits in which the visitors use their smartphones or tablets to experience the layer of AR.  Artivive aims to become the “go-to solution for artists, galleries and creators and change the way art is created and consumed while building a community and movement around augmented reality art.”

Artivive’s CEO Codin Popescu believes that the “experiential element will always be central to how people enjoy and relate to artworks.” Specifically, Popescu believes that the key is “to use immersive technologies such as Augmented Reality to seamlessly add digital elements to those existing and well-loved experiences, making them richer and more accessible in the process.”

Prior to AR tools such as the type offered by Artivive, for artists to create in AR they had to develop their own isolated solutions, which required resources and technical skills, but today with the latest AR technology artists can take visitors on a journey in time and enhance art with illustrations or discuss how such art was made.  For museums, galleries and other art institutions, AR technology offers a new and innovative way for visitors to interact with exhibits.

It has been frequently reported that the art business needs to find ways of engaging the next generation of buyers.  AR technology may be just what the art business needs as it has certainly transformed how we experience art today.

For further information on the application of this dynamic, innovative technology to art, see “Augmented Reality Will Reinvent How We Experience Art,” recently published online by Forbes on June 20, 2018.

 

 

 

 

In recent art world news, developer Silverstein Properties asked street artists to decorate an empty floor of one of its office buildings at the World Trade Center site in Lower Manhattan a couple years ago.  Presently, in partnership with the Port Authority of New York and New Jersey, which owns a significant portion of the site of the World Trade Center, the developer has provided artists a public place close by to showcase their artistic work.  A collection of corrugated metal sheds make up the artists’ new canvas, infusing Lower Manhattan with a 5Pointz street art vibe.

This new canvas of corrugated metal sheds is on the site bounded by Greenwich, Vesey and Church Streets and the Oculus transportation hub, and stores mechanical equipment that will service at some point 2 World Trade Center, which is currently on hold while the developer seeks to locate an anchor tenant.  The solicitation of artists to enliven the metal shed exteriors is hoped to provide the area with a more finished appearance.

The selected artists each received $1,000 for paint along with a $2,000 honorarium.  To date six murals are completed or nearly completed and two additional murals are expected.  The murals will be on display for at least a year.

Working at the World Trade Center site, where the twin towers [once] stood until the Sept. 11 terrorist attack, carries an emotional gravity, and artists grapple with the enormity of that loss.  But many spoke of a determination to balance the loss with art that lifts the spirit.”

For a summary of each selected artist and photos of the works for this innovative street art mural project, see “Bringing a 5Pointz Vibe to Lower Manhattan,” published online by The New York Times on June 1, 2018.

 

In recent art world news, a buyer of a painting recently identified as having been confiscated by the Nazis in 1940 from a Jewish collector in Paris is asking Christie’s to refund the purchase price paid a decade ago for the tainted work.  Christie’s has maintained that it is committed to ensuring that Nazi looted artworks from World War II are not offered for sale.

The buyer, Alain Dreyfus, a Swiss-based art dealer, who purchased the painting by Impressionist landscape painter Alfred Sisley titled “First Day of Spring in Moret” (1889) at a Christie’s auction in New York in 2008, believes the auction house did not thoroughly examine the work’s provenance before offering it for sale.  Dreyfus paid $338,500 for the painting and is asking Christie’s to refund him the purchase price in addition to an annual interest rate of eight percent.  Dreyfus has reportedly said that he is willing to return the painting to the heirs of Alfred Lindon, the collector from whom the work was seized.

Christie’s has said that it had reviewed all databases, catalogues and resources available at the time and did not find anything to indicate that the painting was ever in the collection of Lindon.

An investigation by Toronto-based art recovery company Mondex Corporation revealed that Lindon had placed the Sisley painting along with the rest of his collection in a bank safe before fleeing Paris when the Nazis invaded the city.  The artworks were later seized and stored at the Jeu de Paume for processing.  As a result of Mondex’s investigative efforts, records evidenced that the Sisley painting had been in the possession of Hermann Goering at some point.  Goering was the Reichsmarschall who was “heavily involved in the Nazi art seizures.”

Dreyfus believes Christie’s would have discovered the painting’s tainted history had the auction house conducted an in-depth review of the work’s provenance.  The Lindon heirs share the buyer’s view and are seeking the return of the painting after its provenance and Nazi seizure were discovered by Mondex.

Christie’s has further said that its commitment to the identification of stolen artworks is “evident in the fact that it routinely checks individual works consigned for sale against more than a dozen databases.”  However, prior to the sale of the painting in 2008, only four databases were “available and routinely checked” and there was no evidence in the auction house’s review to suggest that the provenance gap was meaningful.

Mondex believes differently as its founder wrote in an e-mail to the international director of restitution of Christie’s that the auction house “could have consulted a directory of looted items published in France in 1947, which stated that several Sisley paintings, including three ‘Spring’ scenes, were stolen from there.”  Mondex’s founder further wrote that the auction house “could have checked a collection of Nazi documents maintained by the U.S. National Archives and Records Administration, which indicated that a Sisley ‘Spring’ painting had been stolen.”  Mondex’s founder noted that further research at the archives “could have shown that the Lindons were the owners of a stolen painting with the same dimensions, signature and date as the one to be auctioned.”

Christie’s countered that one of the databases used by Mondex did not become digitized until about two years after the 2008 auction sale.  Nevertheless, Dreyfus believes that the auction house is obligated to reimburse him for the Nazi-tainted painting.  Dreyfus has said that Christie’s has not responded to his request for a refund of the purchase price.

Christie’s has issued the following statement on the matter:  “The matter is now between the current owner and the heirs and is now in a legal process.  Christie’s stands by its position that we did our due diligence appropriately in 2008, at the time of the sale.”

It appears that the Sisley painting will be returned to the Lindon heirs in due course, however, it remains to be seen whether Dreyfus will be issued a refund for the purchase price paid for the tainted painting.

 

 

 

 

In recent art world news, a Norman Rockwell painting titled “Blacksmith’s Boy—Heel and Toe” (1940) from the Berkshire Museum’s collection sold for $7 million (with buyer’s premium added, the figure is about 8.13 million) to a telephone bidder last week at Sotheby’s in New York.  This was the highest price fetched by the museum as part of a sell off of 13 works over the past few weeks at Sotheby’s.  Additional works sold include a Francis Picabia watercolor painting and an Alexander Calder mobile that came in at a below estimate of $1 million last week.

Following the recent offering of 13 artworks at auction (notably, two of which failed to sell, including a Frederic Edwin Church with an estimate of $5 million to $7 million) and a private deal involving the purchase of Rockwell’s “Shuffleton’s Barbershop (1950) for an undisclosed amount by the Lucas Museum of Narrative Art, the Berkshire Museum has brought in $42 million just $13 million short of the $55 million goal “it has hoped to raise in an effort to build an endowment and close a budget deficit that its leadership has said risks shuttering the museum in coming years.”

The total fetched for the 11 lots that recently sold at auction was about $12.7 million (without buyer’s premium).  It can be determined from the $42 million total sales to date that the Lucas Museum of Narrative Art likely paid around $29.3 million for Shuffleton’s Barbershop, which was previously tagged by Sotheby’s with a $30 million high estimate.  It is unknown as to whether the museum is receiving a portion of the buyer’s premium paid on auctioned lots—such practice is known as “enhanced hammer”.  If it is, the price paid for Shuffleton’s Barbershop by the Lucas Museum of Narrative Art was likely less.  Sotheby’s has reportedly waived the seller’s fees for the Berkshire Museum.

Pursuant to the terms of the agreement between the museum and the Massachusetts Attorney General and approved by Massachusetts’s highest court in April, the Berkshire Museum has the option of selling up to 40 works in three separate portions to reach $55 million.  With last week’s sale of 11 lots, this means that 26 additional works could still be sold and the two works that passed could be up for auction again.

It will be interesting to see if the museum is able to reach its $55 million goal with the sale of a portion of the remaining works.  For our recent coverage of the Berkshire Museum on the Art Law blog, click here.

In recent art world news, a painting by celebrated African American contemporary artist Kerry James Marshall generated an unexpected windfall for a Chicago municipal agency last week at Sotheby’s in New York.  The vibrant painting titled “Past Times” (1997) fetched $21.1 million at auction last week, which is reported to be nearly 900 times the $25,000 that the Metropolitan Pier and Exposition Authority (“MPEA”) originally paid for it in 1997, and set a world auction record for the artist.  Although the painting was not the priciest work auctioned off last week, it likely produced one of the most significant returns on investment for one of the least likely of collectors.

The state of Illinois formed MPEA oversees McCormick Square, which encompasses the McCormick Place Convention Center, the Wintrust Arena and two hotels along the shores of Lake Michigan.  The MPEA must spend some of its budget on artwork to be publicly displayed in its facilities.  As such, the municipal agency currently owns over 100 works from a diverse range of artists.

Marshall’s Past Times painting was one of the works purchased by the MPEA in 1997 from the Koplin Gallery in Los Angeles (now the Koplin Del Rio Gallery of Seattle), which was one of the artist’s dealers.  The painting is described as a “lush panorama” of African Americans engaging in various leisurely activities, including boating, croquet, golf and picnicking, with a cityscape in the background.  Marshall rose to prominence in the 1980s for his portrayals of black culture.

After being acquired for McCormick Square, the painting was displayed in the convention center hallway for many years with minimal protection such that it was liable to damage or theft as its value soared.  After some time, officials had started to question the appropriateness of keeping the painting displayed at the convention center.  The painting was sent to storage while the MPEA decided what to do with it.

The MPEA fittingly acknowledged that it is not a museum set up to display an artwork of this value in its capacity as a convention center operator.  The MPEA had decided earlier this year to sell the prized painting at auction.  Sotheby’s had estimated that the painting would sell in the range of $8 million to $12 million.  It had sold for nearly double the high estimate.  The MPEA was reported to be “thrilled” with the auction results.  The sale proceeds will be directed to the infrastructure needs of the campus.

While the sale was very profitable for the MPEA, it is said that the public may be deprived of a highly-valued work of art (Grammy award-winning hip-hop producer and rapper Sean “Diddy” Combs has been identified as the buyer of Marshall’s Past Times painting).  An official of the MPEA noted that Marshall’s work is easy to find nearby at Chicago area museums (i.e., Art Institute of Chicago, the Museum of Contemporary Art Chicago, and the Chicago Cultural Center) as the artist has been based in Chicago for decades.

Fortunately, even after last week’s sale, the public will still have access to Marshall’s work and perhaps Combs will decide to publicly display Past Times for at least some of the time during his ownership of this monumental work.

 

In recent art world news, Verisart has launched the “P8Pass,” developed in partnership with online auction house Paddle8, to offer blockchain certification and authentication services to the worldwide art marketplace.  According to Paddle8’s website, the “P8Pass is a digital certificate with data encoded continuously onto the Bitcoin blockchain.  The certificate will be offered for any work of art or object purchased on Paddle8 and will detail provenance including ownership history and artist authorship.  P8Passes will leverage the Bitcoin blockchain to build a decentralized database containing certificates of authenticity and provenance for artworks providing a guarantee, accessible and verified at any time.”  Buyers, consignors and partners will have access to the P8Pass in all curated and benefit auctions featured on Paddle8.

Paddle8 believes that the P8Pass has “the potential to significantly reduce transaction costs for the trade with art [and] collectibles and broaden the market by including new buyers encouraged by authentication process simplicity and transaction safety offered by the P8Pass blockchain product, the risks traditionally being the primary reason for affluent consumers to stay away from the art trade.”

Paddle8’s strategic investor, The Native SA, believes that this innovative new application of blockchain technology to the art market has “the potential to disrupt the art market for good[.]”

Verisart claims to be “the world’s leading platform to certify and verify artworks and collectibles using the Bitcoin blockchain.”  Since the start-up’s 2015 launch, Verisart has offered contemporary artists a simple way to generate permanent certificates of authenticity and reduce the extent of fraudulent activity.  Verisart “combines museum certification standards, distributed ledger technology and image recognition to its provenance and registry services.”

In addition to its partnership with Paddle8 on development of the P8Pass, Verisart has partnered with ArtSystems to offer blockchain certification to leading galleries throughout the world.  This would be the first art inventory management platform to integrate such kind of blockchain-based certificate.

New start-up Codex Protocol is another player, among others, entering this dynamic growing field of placing art on the blockchain.  Specifically, the start-up is a blockchain-based decentralized title registry for art and collectibles.

This is certainly a fascinating area that I will be keeping an eye on in the application of blockchain technology to the global art market.

In recent art world news, a Manhattan art dealer, Ezra Chowaiki, who was accused of defrauding art collectors and dealers around the country last year, has pleaded guilty to one count of wire fraud in the multi-million dollar art fraud case.  Chowaiki admitted last week in New York federal court that he had made fraudulent agreements for the purchase and sale of artwork through his Manhattan art gallery, Chowaiki & Company Fine Art.  Rather than honor these agreements, Chowaiki used the funds and artwork for unauthorized purposes.

According to federal prosecutors, Chowaiki fraudulently transferred more than $16 million of artwork between 2015 and 2017.  “In some instances, Chowaiki sold artwork, purportedly on consignment, without the owners’ authorization.  In other instances, he took money from clients purportedly to purchase artwork, and kept the money but purchased no art.”

The victims of the fraud were unnamed, but according to court filings they include art collectors based in Pennsylvania and Toronto, and a Cayman Islands company managed by an art dealer who conducts business in Tokyo.

The court ordered Chowaiki to forfeit the amount traceable to the offense (over $16 million), and over 20 artworks, including works by Chagall, Degas and Picasso.

Last December, Chowaiki was charged with a single count of the following offenses:  conspiracy to commit wire fraud, wire fraud, and interstate transportation of stolen goods.  Chowaiki surrendered to federal authorities that same day and was released on $100,000 bond.  Chowaiki’s Manhattan art gallery had filed for bankruptcy one month earlier in November 2017.  The art dealer’s sentencing is set for September 12, 2018.

This case is illustrative as to why art collectors should exercise due diligence before working with art dealers in the purchase and sale of artwork.

 

In recent art world news, a coveted David Hockney oil painting titled Pacific Coast Highway and Santa Monica (1990), featuring a colorful California landscape along the Pacific Ocean, has been added to Sotheby’s upcoming contemporary art evening sale on May 16 in New York.  The work carries a $20 million to $30 million estimate, which if sold in the estimate range the sale would set a record for the artist at auction.

Sotheby’s has stated that Hockney’s Pacific Coast Highway and Santa Monica painting represents “a true triumph of his singular vision:  a panoramic and kaleidoscopic paean to his adopted hometown.”

The artist’s prior auction record involved his six-part paneled painting titled Woldgate Woods, 24, 25, and 26 October 2006, which sold at Sotheby’s for $11.7 million in the fall of 2016.  The work features an autumnal scene of East Yorkshire.

Notably, even if the vibrant Pacific Coast Highway and Santa Monica painting sells at the lower end of the estimate, Hockney’s auction record will effectively double within a short period of just under two years.  The painting is said to be offered from an unnamed private collection.

For further information on Sotheby’s upcoming contemporary art evening sale of the Hockney painting in mid-May, please click here.

In recent art world news, specialist global fine art insurer Hiscox in partnership with London-based art market research firm ArtTactic has published its sixth annual Hiscox Online Art Trade Report 2018.  This latest report reveals an online art market worth an estimated $4.22 billion (up 12% this past year).  While this represents a solid year on year increase, it is notable that this was lower than the 15% growth in 2016, and the 24% growth in 2015.  This week’s Art Law blog post will highlight several key findings from the report.

Fewer art buyers buy art online, but those that do spend more.  Approximately 43% art buyers bought art online in the past year (down from 49% in the previous year).  Notwithstanding the decrease in online art buyers, the share of online art buyers paying (on average) more than $5,000 per fine artwork increased to 25% (up from 21% the previous year).  Notably, active online art buyers are also buying more online art than in previous years with 74% making multiple online art purchases (up from 65% in 2017).

Lack of price transparency is an issue for new online art buyers.  While existing art collectors are used to lack of price transparency in the purchase of art, for 90% of new art buyers, lack of price transparency is a significant issue that isn’t being addressed.

New media art is gradually making traction.  New media art (e.g., video or digital art) is gaining traction right behind preferred mediums, paintings and prints, for online buyers.  About 17% of online art consumers purchased new media art this past year and average prices paid for same have seen a gradual increase.

Significant growth for mobile commerce and Instagram is preferred platform among art buyers on social media.  The use of a mobile device to buy art has steadily climbed from 4% in 2015 to 20% in 2018.  As for social media, 63% of art buyers consider Instagram as their preferred platform (up from 57% in 2017 and 48% in 2016).  Instagram has become a key tool for the art industry in reaching consumers beyond the existing art market with nearly 1 billion users.  For the Art Law blog’s recent coverage on the effect that Instagram is having on the art world, click here.

Higher rate of industry consolidation is expected in the future and online auction market is expected to be highly competitive.  As a result of the number of new mergers and acquisitions that took place this past year, 81% of online platforms are expecting a higher rate of consolidation going forward, especially in the form of vertical mergers.  The online art auction market is expecting a highly competitive environment this year.

Third-party marketplaces are helpful sales tools.  Perhaps not surprisingly 75% of galleries used third-party marketplaces to sell art online in 2018—this is up from 59% in 2017 and 41% in 2016.  Nearly 20% are presently using such marketplaces as an outlet for at least half of their online sales (up from 3% in the previous year).

Prevalence of cybercrime hitting platforms and galleries affects buyer confidence.  Over half (54%) of platforms and nearly 30% of galleries have been targeted in an attempted cyber attack this past year (10% to 15% of attempts were successful).  Just under half (41%) of online art buyers indicated that they are concerned or very concerned when buying art online.

High expectations for incorporation of blockchain technology, but minimal adoption.  Over half (60%) of online platforms believe that the use of cryptocurrencies will be the way blockchain technology makes its debut in the online art market.  However, only 7% presently accept cryptocurrencies as a payment method and just under 10% have embedded blockchain technology into their businesses.  Further, well over half (64%) of online platforms believe that using blockchain technology as a “title/ownership registry for the art and collectibles market” will be the “most successful use of blockchain technology in the future.”

Regulatory readiness for forthcoming EU regulation is questionable.  The new General Data Protection Regulation (“GDPR”) is coming into effect on May 25, 2018 and will have widespread applicability as it seeks to unify data privacy standards and provide greater data privacy protection for citizens of the European Union.  Surprisingly though, 41% of galleries and 21% of online platforms surveyed were unaware of this forthcoming new regulation and many were unprepared for it.

For those interested in reviewing the widely anticipated sixth annual Hiscox Online Art Trade Report 2018 in its entirety, click here.