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In recent art news, known art fraudster Vincent Lopreto, who previously served time in prison for selling forged Damien Hirst prints, was charged in a Manhattan courtroom yesterday for selling nearly half a million dollars worth of counterfeit Damien Hirst prints over a two year period. Lopreto pleaded not guilty. Two other individuals, Marco Saverino and Paul Motta, have been charged in the alleged art fraud scheme as well. Those individuals are being held out of state.

Lopreto was arrested in New Orleans last week following a recent sting operation by undercover New York police officers, who bought a couple of Lopreto’s counterfeit Damien Hirst prints. Lopreto and the other defendants were selling the fake art work for between $3,000 to $14,000 for each print. Authorities claim that Lopreto had been advertising the “limited edition” prints online with alleged fake certificates of authenticity and purchase receipts.

Manhattan District Attorney Cyrus Vance said in a statement that this case of fraud “went beyond plain imitation” as the defendants had deceived “a multitude of buyers into purchasing counterfeit art that was falsely passed off as genuine.”

If convicted, Lopreto could receive a sentence of up to 20 years in prison.

In recent art news, Trinity Church in Lower Manhattan is being sued by a sculptor for relocating his bronze sculpture of the stump and root system of a very large sycamore tree entitled “The Trinity Root” that was formally installed on the church grounds.

In September 2005, the 18-foot-tall work was installed by sculptor Steve Tobin in the church courtyard in the same location where the original 70-year old sycamore tree stood until it was damaged and ripped out of the ground by the seismic impact of the collapse of the twin towers of the World Trade Center on September 11, 2001.

In late 2015, the sculptor discovered that the church had relocated the sculpture to a church-owned site in Connecticut without his consent.  The sculptor had received photographs from the church showing the sculpture with “significant damage” after being told that the sculpture had arrived to the new location in good condition.

The recently filed lawsuit in the Federal District Court in Manhattan alleges that the church violated a law known as the Visual Artists Rights Act (VARA) that gives visual artists rights over their works even when no longer owed by them.  The sculptor’s attorney said that the law “prohibits the removal of sculptures” created to be permanently installed at a specific site.  “This is about the solemn promise the church gave to Steve Tobin when he offered to create that sculpture” and “[h]e offered to create it if the church would give it a permanent place in the courtyard.  The church agreed.”

According to the lawsuit, after the church’s new leader was installed in 2015, he moved “to send ‘The Trinity Root’ away because he did not want non[-]parishioners and ‘hordes of strangers’ to continue to crowd the church’s courtyard.”

The church released the following statement:  “While we have no comment on this litigation, Trinity is pleased to have the sculpture at Trinity’s retreat center, where it will be among a collection of planned sites that will encourage prayerful reflection, remembrance and spiritual transformation.”

For additional information in connection with this suit, see “Fate Of The ‘Trinity Root’ 9.11 Memorial By Steve Tobin To Be Decided In Federal District Court.”

 

The US. District Court for the District of Columbia recently denied a preliminary injunction seeking the reinstallation of a controversial “anti-police” painting at the U.S Capitol complex.

David Pulphus, a student artist from Missouri’s First Congressional District, and William Lacy Clay, the congressional representative for that district, filed a lawsuit claiming that their First Amendment rights to free speech were infringed upon when the Architect of the Capitol, Stephen T. Ayers, removed Pulphus’s painting from a display of student art.

Pulphus’s painting was selected to represent Clay’s congressional district in the 2016 Congressional Art Competition, and was hung in the Cannon Tunnel in the U.S. Capitol complex in June 2016 with the other winning artwork.  The painting was removed several months later by the Architect of the Capitol (who oversees the competition), after receiving several complaints that the painting was “anti-police.”

The Court prefaced its opinion stating that “[a]lthough the Court is sympathetic to plaintiffs given the treatment afforded Pulphus’s art, under controlling authority this case involves government speech, and hence plaintiffs have no First Amendment rights at stake.”

Read the Court’s opinion here.

The “Fearless Girl” was created by sculptor Kristen Visbal and erected in Bowling Green in honor of International Women’s Day in March.  The statue has become wildly popular.  Although set to be removed next week, it will remain in place until early 2018.  However, not everyone is supportive of the artwork.

Fearless Girl Statue by Kristen Visbal New York City
Photo by Anthony Quintano, used under Creative Commons Attribution 2.0 Generic (CC BY 2.0) license (unaltered)

“Fearless Girl” defiantly faces Wall Street’s famous “Charging Bull” statue, which was created by sculptor Arturo Di Modica, who copyrighted and trademarked his creation.  Di Modica believes “Fearless Girl” subverts the meaning of his artwork, and his lawyers have accused the company that commissioned the statue of improperly commercializing D. Modica’s bull in violation of the copyright.

Read more here and here.

The New York Times recently reported that its readers are divided on the issue of whether the original intent of the artwork should be able to stand over time and how much public art is protected.  Read the article and NYT’s readers’ comments here.

 

In recent art news, longtime collaborators and respected art scholars, Emma C. Bunker and Douglas A. J. Latchford, who had become authorities on Southeast Asian antiquities in which their approval could virtually guarantee an ancient object’s value and legitimacy, have become entangled in a criminal lawsuit filed by the Manhattan district attorney last December in New York as “Co-Conspirator No. 1” and “Co-Conspirator No. 2.”  Although neither expert has been charged and neither is named in the complaint, it was reported that people familiar with the case have confirmed their identities.

The collaborators and longtime friends authored three seminal volumes, namely, “Adoration and Glory:  The Golden Age of Khmer Art,” “Khmer Gold” and “Khmer Bronzes,” which are regarded as core reference works for other experts.

The complaint alleges that “over a period of years the co-conspirators and others helped a prominent New York gallery owner, Nancy Wiener, falsify the documentary history of looted Cambodian relics, making them easier to market.”  A federal agent said in the complaint that “[m]isrepresenting the true provenance of an antiquity is essential for selling stolen items in the market.”

In the criminal suit, Wiener, who has pleaded not guilty, is accused of using her business “to buy, smuggle, launder and sell millions of dollars worth of antiquities stolen from Afghanistan, Cambodia, China, India, Pakistan and Thailand.”

While the accusations in this case are hardly new in the history of art fraud, experts comment that this case

highlights the vulnerabilities of the art world, where authenticity and ownership disputes are common and where scholarship, and the people who can wield it, often provide the imprimatur that dealers need to close sales.”

Neither Bunker nor Latchford have responded to news media requests for an interview.  However, Latchford has denied any wrongdoing in previous interviews and defended his collecting practices as the “norm for an era when far less rigor was attached to provenance and sales documents.”

For additional information regarding this intriguing case, see “Expert Opinion or Elaborate Ruse?  Scrutiny for Scholars’ Role in Art Sales,” published online by the New York Times on March 30, 2017.

 

The New York Times recently reported on a lawsuit filed in New York State Court in which the heirs of Fritz Grunbaum are citing the recently enacted Holocaust Expropriated Art Recovery Act (known as the HEAR Act) in an effort to claim two valuable drawings by the late Austrian artist Egon Schiele.  The HEAR Act, adopted last December, has been widely praised as a necessary tool to provide the victims of Holocaust-era persecution and their heirs a fair opportunity to recover works of art confiscated or misappropriated by the Nazis during World War II.

Grunbaum’s nearly 450 piece exquisite art collection has been the center of controversy almost since the collection was confiscated from his Vienna apartment in 1938.  Over the years, Grunbaum’s heirs have argued that the collection was stolen by the Nazis.

Others, such as collectors, dealers and some museums have countered that the artwork was inventoried by the Nazis and not stolen, and that 53 of the some 81 Schiele works were legitimately sold by Grunbaum’s sister-in-law to a Swiss art dealer in 1956.  These parties are of the view that previous courts have found that the Schiele works were not stolen and that no further claims should be considered on such works.

However, the Grunbaum heirs assert that the previous claims, in the present case and others, were determined on legal technicalities, not the merit of the argument that the works were looted by the Nazis and that this is the type of case that the new law was enacted to address.

The HEAR Act creates a federal statute of limitations for such claims that is six years from the time of “actual discovery” of the whereabouts of the work.  The new law is consistent with the “spirit of two international proclamations stating that technicalities should not be employed to prevent stolen property from being returned to rightful owners.”

The two Schiele works being sought by Grunbaum’s heirs, namely, “Woman in a Black Pinafore” (1911) and “Woman Hiding Her Face” (1912), were part of the 1956 sale to the Swiss dealer.  The attorney for Grunbaum’s heirs, however, argues that the circumstances of the 1956 sales transaction were never fully investigated and that the lost works were not discovered by the heirs until they were noticed for sale at a 2015 art fair.  The two Schiele drawings are said to be valued together at about $5 million.

The Grunbaum heirs’ suit was filed in November 2015 after learning that Richard Nagy, a London art dealer and Schiele specialist, was trying to sell the two Schiele drawings at an art fair at the Park Avenue Armory earlier that same year.  Nagy has fought the claim in court by arguing that he acquired both works “in good faith and in a commercially reasonable manner” after the United States Supreme Court declined to hear the attorney for Grunbaum’s heirs appeal of an earlier case.  Nagy’s attorneys argue that prior court rulings on the Schiele works from the Grunbaum collection were based on a finding that such works had been properly conveyed in 1956.  Specifically, Nagy’s attorneys assert that the attorney for Grunbaum’s heirs was wrong to invoke the new HEAR Act because the law does not apply to cases where a final judgment has been reached.

Agnes Peresztegi, president and legal counsel of the Commission on Art Recovery, an organization founded by billionaire art collector Ronald S. Lauder, however, sides with the position of the attorney for Grunbaum’s heirs.  She indicated that the prior case was not decided on the merits, but rather on a technical issue that too much time had passed to pursue a claim.  Peresztegi “welcomes the use of the new law in deciding whether many of the Grunbaum collection’s Schieles, including the two owned by Mr. Nagy, were stolen.”

The attorney for Grunbaum’s heirs maintains a positive attitude regarding the case in which he recently indicated that “[w]e believe that the expert report and scholarship of Dr. Jonathan Petropoulos, the world’s leading expert in this field, will persuade the court that the evidence shows that Fritz Grunbaum was a victim of Nazi art looting.”

We will continue to monitor this case and will report updates on same on the Art Law blog.

 

 

 

As recently reported in the New York Times, the heirs of Alfred Flechtheim, a prominent German art dealer and collector, brought suit in federal court in Manhattan earlier this week against the German state of Bavaria over alleged Nazi-looted art works.  The heirs argue that the German state of Bavaria has refused to return art works that were looted by the Nazis before World War II.

The Flechtheim heirs seek the return of eight paintings by artists Max Beckmann, Juan Gris and Paul Klee from the Bavarian State Paintings Collection.  According to the complaint, the eight paintings include Beckmann’s “Duchess of Malvedi” (1926), “Still Life with Cigar Box” (1926), “Quappi in Blue” (1926), “Dream—Chinese Fireworks” (1927), “Champagne Still Life” (1929) and “Still Life with Studio Window” (1931); Gris’ “Cruche et Verre Sur un Table” (1916) and Klee’s “Grenzen des Verstandes” (1927).

The heirs had been in negotiations with the Bavarian government for seven years prior to filing their suit.  In their court filing, they accused the German state of not meeting international commitments on the restitution of Nazi-looted art.  Specifically, the complaint states “Bavaria’s refusal to confront its responsibility has persisted since the war” and its “chain of title to the paintings is defective because it was rooted in the seizure of Flechtheim’s property in violation of international law.”

In the complaint brought by the son and widow of Flechtheim’s nephew, the heirs allege that the works being sought were among those Flechtheim was forced to leave behind as he fled Germany and his galleries were taken over.

The Bavarian government has previously taken the position that the paintings were not looted art and that the works were sold by Flechtheim in 1932 before the Nazis came to power.  And, in 1974, the paintings were later donated to the Bavarian State Paintings Collections by Munich art dealer, Günther Franke.

The Flechtheim heirs, however, dispute the Bavarian government’s position, citing evidence that they claim shows the paintings were still in Flechtheim’s possession in 1934 after the Nazis came to power.  The heirs criticize the German state for its refusal to open records that they claim would be helpful in researching the fate of the paintings.  Their court filing cites a letter sent last year to the governor of Bavaria by nearly 30 members of United States Congress requesting “‘greater dialogue and cooperation to fulfill’” international principles aimed at supporting the restitution of art seized by the Nazis.”

The case is Hulton et al. v. Bayerische Staatsgemaldesammlungen et al., United States District Court, Southern District of New York, No. 16-09360.

The Arts + Business Council of Greater Philadelphia is an organization dedicated to strengthening Philadelphia arts, culture, and for-profit creative businesses, by connecting the creative sector with the business, legal and technology communities.

One of the ways it fulfills its mission is through the Philadelphia Volunteer Lawyers for the Arts program, which provides pro-bono and low cost legal assistance, educational programs and business counseling to artists, arts organizations, culture and heritage organizations, collectives, makers, inventors and startups in an effort to secure a thriving culture in the region and the innovation economy statewide.

Learn more here.

The National Law Review recently summarized key lessons gleaned from Hoffman v. L&M Arts, et al., No. 15-10046 (5th Cir. Sept. 28, 2016), regarding the drafting and construction of confidentiality provisions for the sale of artwork.

Hoffman involved a claim for breach of a confidentiality provision in a Letter Agreement between Marguerite Hoffman, a wealthy art collector seeking to sell her “Untitled” 1961 Mark Rothko oil painting, and L&M Arts, a broker which was acting as an intermediary between Hoffman and the buyers, Studio Capital, Inc. and David Martinez.

The Letter Agreement included the confidentiality language: “All parties agree to make maximum efforts to keep all aspects of this transaction confidential indefinitely.”  In addition, the Letter Agreement required the buyers to not hang or display the painting for six months after the sale.

Several years later, the buyers auctioned the painting, which appeared on the cover of the Sotheby’s catalog and sold for more than $31 million.   In response, Hoffman sued L&M Arts, and the buyers for breach of the confidentiality provision of the Letter Agreement.

On appeal, the Fifth Circuit Court of Appeals, among other things, found that the Letter Agreement was not breached and ruled in favor of L&M and the buyers.  Read the full opinion here.

National Law Review’s key lessons:

  • Confidentiality provision may be used to keep the sale of artwork secret, but have to be limited in scope so as to not be deemed an unreasonable restraint on the sale of property. A significant factor with respect to enforceability of such provisions is the length of the restriction.
  • Confidentiality provisions should clearly define its scope including date, time or geographic restrictions, as well as what each party to the transaction can and cannot do.
  • The parties to a transaction should always ensure that every party is bound by the confidentiality provisions, or, at the very least, include an indemnity provision for the breach of a third-party buyer when an intermediary is used.
  • In case of breach of the confidentiality provisions, parties should clearly draft the remedies and damages that may follow.

Read the full story here.

In recent New York art world news, a dispute between actor Alec Baldwin and art gallerist Mary Boone has taken a new twist with the filing of a motion in New York State Supreme Court by Ms. Boone’s attorneys accusing Mr. Baldwin of committing fraud by failing to pay sales tax on a painting he had purchased from her in 2010.

The filing comes on the heels of a lawsuit brought by Mr. Baldwin against Ms. Boone over a month earlier alleging that the gallerist had defrauded him six years ago “by promising him a painting, “Sea and Mirror,” by the artist Ross Bleckner, for which he had paid $190,000, but supplying him another, similar Bleckner painting” by the same name.  Mr. Baldwin initially had concerns about the painting after he purchased it from the gallerist in 2010.  Mr. Baldwin has claimed that he was never informed that he would be receiving a different version of the painting and that Ms. Boone had “intentionally created a copy to appear genuine, and to fool him by passing it off as the real thing.”

In the motion to dismiss Mr. Baldwin’s lawsuit, Ms. Boone’s attorneys allege that at the time of purchase of the painting six years ago, the actor left delivery instructions that the painting be shipped directly to his home in California and then shortly after it had been delivered to the West Coast, the painting was shipped back to Mr. Baldwin’s apartment in New York.  Accompanying the filing is evidence that the painting arrived in Woodland Hills, California in late April 2010 and then was installed in Mr. Baldwin’s New York City apartment the subsequent month, describing this as a way for Mr. Baldwin to evade taxes of nearly $17,000.

Mr. Baldwin’s attorney asserts that Ms. Boone only seeks to “distract attention” from the actor’s claims and does not deny the primary allegation in Mr. Baldwin’s complaint.

Ms. Boone’s attorneys reject Mr. Baldwin’s lawsuit as false and believe it is invalidated by the statute of limitations because he took too long to bring his claim. In this latest filing, the gallerist’s attorney asserts that the two paintings are so different from each other that Mr. Baldwin should have known he was receiving a different version of the Bleckner painting.