Artist's Estate Sues Chelsea Hotel

The famous Chelsea Hotel in New York has been a setting for many a scandal. The last few years have seen comparatively milder wranglings over the artworks that used to hang in the hotel, prior to its sale in 2011.

The most recent case to be filed is a claim by the Larry Rivers Foundation (representing late American artist Larry Rivers) against the new owners of the Chelsea Hotel seeking recovery of a Rivers' painting that, the Foundation alleges, was loaned to the hotel for exhibition purposes only.

The Courthouse News Service provides further details.

Rivers [had previously] loaned another work in its series, De Kooning's Father: Portrait of Arshile Gorky," to the hotel, which hung prominently in its lobby before being sold to a third party, according to the complaint.

The foundation claims that Rivers loaned, but never intended to donate, "Dutch Masters" to replace that work. " 

After Dutch Masters was installed at the Chelsea Hotel, managers of the Chelsea Hotel asked Larry Rivers to donate Dutch Masters to the Chelsea Hotel and Larry Rivers refused that request," the complaint states. 

After Rivers died in 2002, his foundation received the title to "Dutch Masters."

It was not, however, until the hotel was sold that the Foundation asserted ownership and tried to recover the painting. After several years with no success, the Foundation was left with little option but to bring this recent claim seeking return of the painting and at least $250,000 in damages for conversion and unjust enrichment.

Considering some of the stories surrounding other paintings which went missing at the same time, success in the claim might not necessarily mean recovery of the painting. But let's hope that this piece was not just thrown in the bin.

Source: Courthouse News Service, 31 July 2014

Not an easy snatch and grab

A thief managed to make off with a piece of a copper sculpture as it was being installed in a New York park.

The piece was part of an exhibition of Vietnamese artist Danh Vo's work "We the People", organised by the Public Art Fund. We the People is a life-size replica of Frédéric Auguste Bartholdi’s Statue of Liberty, recreated by Danh Vo in about 250 individual pieces.

One part of We the People

MyFoxNY reports that the robbery took place last week in City Hall Park - one of the locations of the exhibition, which was due to open on 17 May. The piece taken was a large, chain link section made of copper resembling a portion of the Statue of Liberty's foot. It is said to weigh about 40lbs and be worth about $6,000.

It does not appear that the theft has impacted on the opening of the exhibition, which can now be seen in both City Hall Park and Brooklyn Bridge Park. The police are investigating.

More details on the exhibition can be found here.

Gagosian not off the hook

The New York state Supreme Court in Manhattan has ruled that Larry Gagosian and Gagosian Gallery Inc. must continue to defend a fraud claim brought by Ronald Perelman.

By way of background, in September 2012, Perelman, an American businessman with a mere net worth of around US$14.1 billion, sued Gagosian Gallery Inc. and its founder and owner, Larry Gagosian alleging that they had "concealed material information from [Perelman] and used their dominant position in the contemporary art world to manipulate the price of a certain artwork in transactions with [Perelman] in gross violation of the fiduciary duties owed to [Perelman]."

Perelman brought claims for breach of contract, breach of fiduciary duty, fraud, breach of the covenant of good faith and fair dealing, unjust enrichment and deceptive business practices.

On the same day Gagosian sued Perelman, accusing him of reneging on an agreement to buy two works of art. In October 2012, however, the Gagosian parties dropped their suit and subsequently filed a motion to dismiss all of Perelman’s claims.

Unfortunately for Gagosian, while New York State Supreme Justice Barbara Kapnick dismissed the majority of the charges (in her decision of 31 January 2104), she ruled that the fraud claim may stand.

Businessweek reports:

The judge said that while the plaintiffs, Perelman’s MAFG Art Fund and MacAndrews & Forbes Group LLC, are “experienced and sophisticated” business investors, the allegation that Gagosian and his gallery had “superior and unique” knowledge of the art world is enough for the fraud claim to survive.  

“Plaintiffs allege that Gagosian has enormous power to influence, and even set, the markets for the artists he represents because of his impressive roster of artists and his access to and knowledge of the largest private art collections in the world,” Kapnick wrote. “Even though the plaintiffs are sophisticated art collectors and investors, the court cannot say, as a matter of law, that plaintiffs’ alleged reliance on defendants’ representations regarding the art market and intrinsic value of particular works of art was per se unreasonable or unjustified.”

The full decision can be found here.

Gagosian has 30 days (from 31 January) to file and serve an Answer to the fraud claim.

Perhaps most interesting is the power and influence that one individual is said to wield in the art world - and the other scary insights into the art world that the case provides. Details can be found in the initial complaint and amended complaint.


Source: Businessweek, 4 February 2014

The art of dodging

It appears that the law has finally caught up with a New York art dealer after a lengthy period of dodgy behaviour.

Glafira Rosales was charged this month with evading payment of millions of dollars in tax on income she earned from the sale of fake artworks.

A press release from the US Attorney's office for the Southern District of New York explains that:

[Rosales was arrested] for filing false tax returns and for failing to disclose a foreign bank account to the IRS. Rosales allegedly failed to report the receipt of at least $12.5 million in income from the sale of works purported to be by celebrated abstract expressionist artists. Most of the income was received in a bank account in Spain that Rosales hid from, and failed to disclose to, the IRS.

So not only did she manage to pull the wool over the IRS' eyes, but she managed to fool the art world with her forged artworks - and for a significant period of time. Indeed, Manhattan U.S. Attorney Preet Bharara said:

“As alleged, Glafira Rosales gave new meaning to the phrase ‘artful dodger’ by avoiding taxes on millions of dollars in income from dealing in fake artworks for fake clients...”

A painting sold by Rosales as an original Pollack

According to the Complaint:

Rosales began selling several never before exhibited and previously unknown paintings in the 1990s, which she claimed to be by some of the most famous artists of the twentieth century, such as Jackson Pollock, Mark Rothko, and Willem de Kooning. From 2006 through 2008, the proceeds of her sales of such paintings to two prominent Manhattan galleries were over $14 million. In selling most of the paintings to the two galleries, Rosales purported to represent a client who had inherited the paintings and wanted to sell them, but who also wished to remain anonymous. For the remainder of the paintings, she purported to represent a Spanish collector. Rosales further claimed that a portion of the price paid by the Manhattan galleries was a commission to her for selling the paintings, and that the remainder would be passed along to her clients. 

However, the investigation revealed that:

• experts in the fields of art, art history, and materials science concluded that at least several of the paintings sold by her are counterfeit;
• the client on whose behalf she purported to sell most of the paintings to the Manhattan galleries never existed;
• the Spanish collector on whose behalf she purported to sell the remainder of the paintings to the Manhattan galleries never owned the paintings;
• instead of passing along a substantial portion of the proceeds of the sale of the various paintings, she kept all or substantially all of the proceeds, and transferred substantial portions of the proceeds to an account maintained by her then-boyfriend; and
• Rosales then filed tax returns claiming that she had not kept all, or substantially all of the proceeds from the sale of the paintings. She also kept most of the proceeds in a foreign bank account that she hid from, and failed to report to, the IRS.

Unfortunately for Rosales, it seems the scheme was not fool proof after all. As IRS Special Agent-in-Charge Toni Weirauch explained: “The sale of a piece of art for profit is a taxable event and the seller is responsible for paying his or her fair share of tax, even if the art is counterfeit."

Rosales now faces some lengthy prison time if convicted on all counts.

See the full complaint here.

Trying to make the MET pay

Ever been to the Metropolitan Museum of Art in New York City - better known as the MET? Did you pay to get in? Did you know you didn't have to? I have to admit the first time I went it was not clear that the entrance fee was not compulsory. It was only on a subsequent visit that I was asked what I wanted to pay that I realised that I had a choice. It turns out this is not uncommon. However, some appear to have had a more extreme reaction than myself.

Reuters reports that:

... a lawsuit filed on Tuesday against the museum complains that most museum-goers have no idea that the "recommended" $25 entrance fee is nothing more than a suggestion.

The plaintiffs include a member of the museum, along with two Czech tourists who purchased single-day admissions. They argue the museum employs misleading signs and other techniques to dupe its 6 million annual visitors into believing they must pay to gain access.

The museum's rent-free lease with the city mandates that it open its doors to the public for free on multiple days a week, although it is permitted to ask for a voluntary fee. But the lawsuit says the museum deliberately deceives its visitors into believing that the charge is mandatory.

Signs above the admissions desk that list the entrance fees feature the word "recommended" in small type below the word "admissions" in larger, bold type. The lawsuit also pointed out that visitors are funneled in lines to the admissions desks, where cashiers await to collect the fee.

"MMA has misled, and regularly misleads, members of the general public to believe, on all days of the week during times when the MMA is open, that they are required to pay the Admission Fees in order to enter Museum Exhibition Halls," the lawsuit claimed.

... [The] complaint asks for an injunction [requiring the museum to make its policy clearer to visitors] as well as unspecified damages for all museum visitors who, like the three named plaintiffs, paid to enter with a credit card.

This is the second lawsuit filed against the MET challenging its admission fee. Back in November 2012, two members of the MET (represented by the same counsel as this latest claim) brought a very similar claim for consumer fraud, and for charging unlawful admission fees in violation of New York State law.

A spokesperson for the MET says that the claims are unsustainable. It remains to be seen what the court thinks.

Source: Reuters, 5 March 2013, New York Post, 15 November 2012

Inept thief charged with stealing Dali

Cartel de Don Juan Tenorio by Salvador Dali

There are widespread reports this week of the case brought by the New York authorities against a Greek man in relation to a bungled attempt to steal this Dalí painting from New York gallery, Venus Over Manhattan.

Last June, in broad daylight, Phivos Istavrioglou walked into the gallery, pulled the painting off the wall and put it in his shopping bag – in front of security cameras and leaving fingerprints in the process. Once photos of him from the security cameras started to circulate, Istavrioglou was scared into removing the picture from its frame, rolling it up and sending it back to New York.

Gotcha!

Unfortunately for Istavrioglou, New York detectives were able to lift his fingerprints from the package, which they then matched to those taken from another shoplifting incident, and were thus able to identify Istavrioglou. As a final step, an undercover policeman posed as an art gallery owner and convinced Istavrioglou to return to New York with the offer of a consultant position. Upon his touch down at JFK, Istavrioglou was arrested.

Istavrioglou has pleaded not guilty to grand larceny. Bail has been set at $100,000 (£65,000).


Source: New York Post, 19 February 2013, The Guardian, 20 February 2013

The Innocent Art Sale Test

Above: "The Innocent Eye Test", a comment on the art world?

Late last week, an art collector, Robert Wylde, filed a lawsuit against the Gagosian Gallery in New York. The lawsuit has it roots in 2009, when Mr Wylde purchased a Mark Tansey painting called ‘The Innocent Eye Test’ from the gallery for US$2.5 million. Mr Wylde claims that the Gagosian did not tell him at the time that the Metropolitan Museum in New York already owned 31% of the work and had been promised the painting would eventually be gifted to the museum in full.

Wylde still has possession of the painting and is reportedly seeking several million dollars in damages.  The suit also contends that the gallery had agreed to sell Mr Wylde a Richard Prince painting for $2.2 million in 2009 but cancelled the sale when it got a higher offer.

According to the New York Times, the Gagosian has stated that owner, Charles Cowles, "represented that he had clear title to the painting, which was viewed for sale in his apartment, and the gallery acted in good faith at all times in selling the painting."

When Cowles was contacted by the New York Times, he admitted that the mix-up was his fault: "One day I saw it on the wall and thought, 'Hey, I could use money,' and so I decided to sell it… And now it's a big mess."

Snap away in NYC

Photographers in New York City are finally free to photograph federal buildings and public spaces without the fear of interference (including the confiscation of memory cards, 35mm film or other photographic equipment).

The New York Civil Liberties Union (NYCLU) has been campaigning on this issue since the measures were first introduced post 9/11. Following legal action, the US government has now agreed to issue a written instruction to all relevant personnel to state that there are no general security regulations which prohibit external photography (note internal photography of public spaces remains restricted). There is still the possibility for local rules to override this provision but in general this is good news for New York photographers and anyone planning a holiday to NYC in the near future.

Source: HyperAllergic