"The balance of power in the forgery detection game is about to shift." (UPDATED)

Artsy:  These Four Technologies May Finally Put an End to Art Forgery.

UPDATE:  Tim Schneider:  "The cross-sector enthusiasm for these innovations shows why I expect technology to make a vastly bigger impact on art services than art sales. The most powerful gallerists and dealers will be happy to buy into a better mousetrap if it enhances their core business––and, unlike e-commerce, poses no threat to the aura of exclusivity and exceptionalism that has driven that business since its inception."

"More bizarrely, in several instances during one auction, the brothers, who are partners in at least one business, bid against each other. Their competing efforts sent the price of routine items soaring, according to court papers." (UPDATED)

Today in WTF:  Keno Brothers, ‘Antiques Roadshow’ Stars, Face Debt and 2 Lawsuits.

UPDATE:  AFC:  "Having worked at both Christie’s and Sotheby’s, one would assume the brothers would know how to handle themselves at an auction."

"The hapless pensioner explained to police that she was simply following the instructions."

The Telegraph:  91-year-old woman fills in crossword at museum - only to discover it was a £60,000 artwork:

"'Reading-work-piece', a 1977 work by Arthur Köpcke of the Fluxus movement, essentially looks like an empty crossword puzzle.  Next to the work is a sign which reads: 'Insert words'."

The museum says "in the future it would alter the label for the work to make it clear visitors were not permitted to fill in the blanks."  But Ann Althouse asks, "Doesn't that wreck the work of art?"

Rhett Jones says "Something tells us the Fluxus people would like this story."

"The smoke is clearing." (UPDATED)

The Observer:  What We Learned From the Knoedler Trial and Scandal.

Short answer:  not a lot.

UPDATE:  The Art Market Monitor: "To sneer and mock the buyers of these fakes may make the crowd feel superior but it does nothing to explain how so many sophisticated buyers were eager to acquire these fakes."

"Met to Cut 100 or More Jobs in a Move to Steady Finances" (UPDATED)

Robin Pogrebin has the story here.

Remember, this is a choice.  They don't have to let these people go.

UPDATE:  "Campbell said exhibitions would be cut to 40 per year from 55 to reduce costs. That’s more than a quarter."  Also a choice.

"But they both reinforce the absurd truth that the most essential question in the multibillion-dollar art market––'Is this piece even legitimate?'––still has no foolproof answers in 2016."

Tim Schneider with the key takeaway from the twin cases of Peter Doig and Lee Ufan.

Another risk of authentication

"A Bordelaise octogenarian woman got more than she bargained for when she hired an art specialist to authenticate a possible Leonardo da Vinci sketch in her possession."

Artnet:  Art ‘Expert’ Vanishes With an Elderly Client’s Precious Leonardo da Vinci Sketch.

"Yes, I am accused by the police. The accusations are that my art is based on 'spreading the falsehood' and 'creating public anxiety.'"

The Art Newspaper:  Leading Iranian artist accused by authorities of disturbing the peace.

Germany's strict new "public trust" law has passed

Dealers call it "the most stringent import and export restrictions on cultural objects in the world" and say "private collectors were already moving valuable works abroad before the law’s passage to avoid the new regulations."

The German culture minister would make a good member of the Deaccession Police:  she says "Germany spends billions in tax money to promote culture. It is therefore a matter of course that we should protect and keep our own cultural heritage."

In other words, because we subsidize, in a general way, "culture," we now own these very particular items of culture which may or may not have had any direct connection to the billions in tax money that's been spent.  All your culture are belong to us.

Some background here and here.

Another weird authentication case

What happens when a forger admits to forging an artist's work ... but the artist disagrees and declares the work authentic?  We're finding out right now, in South Korea, with artist Lee Ufan.

"Who Gets the Subsidized Apartments?"

A New York Times editorial this week:  "A new study of [federally financed affordable housing for artists] suggests it might worsen racial segregation by bypassing black and Latino people in favor of younger, white tenants."

"Pictures in the Sunday Styles tribute were of Cunningham by other photographers, or black-and-white images of newspaper clippings of his columns, which an insider pointed out is a way to get around the rights issues."

Page Six is reporting that Bill Cunningham died without a will, and (surprisingly to me at least) the Times has no ongoing rights to use his photos.  His heirs include "several nieces and nephews."

The perils of authenticating, part infinity

The NYT's Graham Bowley had a detailed report this week on a fascinating lawsuit in federal court in Illinois:  artist Peter Doig is being sued for denying authorship of a work the owner claims he made as a teenage inmate at a Canadian detention facility.  Doig's motion for summary judgment has been denied, and the case is scheduled for trial next month.

Bowley says "even if the court favors [the owner], it could be a hollow victory. Since the artist himself and the dealer who represents him say it’s not a Doig, the art market is unlikely to assign much value to it, art experts said" -- but if he wins, Doig might have to pay him the value of the painting, which wouldn't be hollow at all.

This is scary stuff.  As Nicholas O'Donnell says in the article, it "put[s] at artists in the cross hairs."  Or as Sergio Muñoz Sarmiento says, "[a] decision against Doig could have shocking consequences for artists."

Held in the public cone

An ice cream museum is popping up in Manhattan later this month, near the Whitney.

You can only eat a scoop if you replace it with another scoop.  #deaccessioninghumor

I'll be here all week.

"[O]ne of the biggest and most complex legal disputes over art in Europe"

Kelly Crow has a detailed report in the Wall Street Journal:  The $3 Billion Family Art Feud.

"Unauthorized Peter Beard Exhibit Will Go Forward"

Reports the Observer.  It's hard to tell what the hell is going on from the story.

"As far as I’m concerned, it has nothing to do with copyright."

"A work of art goes out there, and there’s a stream that activates and widens the communal imagination. It was an honor that I was being quoted. There was no money involved at all."

NYT:  Artist Who Inspired Kanye West’s ‘Famous’ Video: ‘I Was Really Speechless.’

"The artists have received payments between $200 to $1,700."

Back from a break and catching up on the news, I see that, after "a successful sales pilot," the Artist Pension Trust has made its first distributions to artists.  Well, no one is retiring on these distributions, though overall it remains too soon to tell.  Some background here.

Details on the Picasso bust settlement

From Robin Pogrebin here.  Background here.

"Artists cannot claim deductions on the artworks they donate, no matter the market value or hammer price commanded by their work."

"All they can write off is the cost of materials. Buyers, on the other hand, can claim a deduction when the work they purchase at a benefit sale hammers down for more than its fair market value."

ARTnews:  The Best Intentions: Inside the Wild World of Charity Auctions.

"The new approach reduces the risk that Sotheby’s ends up with too much artwork in its inventory -- a concern particularly in a slowing market." (UPDATED 2X)

Bloomberg reports that the auction houses are now paying fixed fees to third-party guarantors. The Art Market Monitor calls the story "laughable nonsense":  "The guarantee is a kind of loan and the guarantor deserves to be paid interest for making it."

UPDATE:  Felix Salmon:  "This is not manipulation, it’s transparency, and a welcome development."

UPDATE 2:  Tim Schneider:  "[The Art Market Monitor] argues—convincingly, I think—that ... critics are intentionally miscasting these arrangements as something more devious than what they are: fully disclosed insurance policies against a piece going unsold at auction ...."

Apply Yourself

An interesting Ninth Circuit VARA decision that turns into a debate about the meaning of "applied art" (because applied art is an exception to VARA; if it's applied art, it's not protected).

The case involves La Contessa, "a used school bus transformed into a mobile replica of a 16th-century Spanish galleon" for use at the Burning Man festival for several years, and then destroyed.

The majority opinion wants a relatively objective test:  "the focus of our inquiry should be on whether the object in question originally was—and continues to be—utilitarian in nature."  If the object "initially served a utilitarian function" and "continues to serve such a function" even after the artist transforms it, then it's applied art (and therefore not protected by VARA).  The majority wants judges to (and this is relevant, I think, to the fair use/appropriation debate) stay out of the business of making aesthetic judgments:  the alternative proposed by the concurring judge -- to ask whether a work is primarily directed to a practical purpose -- would "necessarily require[] courts to express judgments regarding the importance of an object’s artistic qualities," and "how different judges could answer such a question on a consistent basis is anything but clear."

The concurrence calls for a "more textured and flexible definition."  VARA's protections "cannot be limited only to works entirely devoid of any utilitarian purpose. ... Many outstanding sculptures, including the Caryatids of the Acropolis and the monumental carvings of Ramses at the temple of Karnak are in fact columns that provided buildings with structural integrity.  Medieval tapestries not only represented a form of fine art, but also kept castles and cathedrals free from draft."  "To effect the purpose of VARA and provide guidance for the art community, I believe courts should evaluate the work as a whole, asking whether its primary purpose is to serve a useful function and whether the artistic creation is subservient to that purpose. If the primary purpose is for the work to be viewed and perceived as art, then any incidental utilitarian function will not push it outside the scope of VARA."

I score this round for the concurrence.

Eileen Kinsella has a good write-up at artnet.  Courthouse News Service here.

Another Richard Prince lawsuit (UPDATED 3X)

Via Clancco.

UPDATE:  "If the offending work is that on page 8, plaintiff will have a hard time."

UPDATE 2:  Here is Eileen Kinsella's story at artnet.

UPDATE 3:  "Unless Prince decides to give up appropriating art and Gagosian quits putting said work on display, it seems likely that these lawsuits will continue."

Taxing

Daniel Grant had a piece in the Weekly Standard a week or two ago arguing, generally, that "philanthropy is not a tax proposition" and, more specifically, against proposals for restoring the income tax deduction for donations by artists (as opposed to collectors).  In general I disagree with Grant's take on this -- I think any time you make something more expensive (which is what happens to donations of art when you reduce the accompanying tax deduction), you get less of it.  But there are two, more narrow points I want to make here:

1.  The piece is critical of Ralph Lerner for telling the New York Times right after the Pension Protection Act was passed in 2006 that it would be "the death of fractional gifts."  As Grant points out, fractional gifts "didn't die and continue to be a normal way that donors" structure their giving. But -- and I realize this is a long time ago and little bit inside baseball -- the initial version of the Pension Protection Act would have been the death of fractional gifts -- as a result of what I called at the time the "mismatch problem." When that problem was later fixed through technical corrections, it brought the practice back from the dead.

2.   Grant says:  "As a practical matter, if artists want to have the same tax deductions as non-artist donors to museums, they simply can sell their work and contribute the earnings to these public institutions."  That's not the case.  Here's why.

If a collector donates a work to a museum, he reduces his taxable income by the fair market value of the work – a net positive.  Say he has a million dollars in income and the work is worth $100,000.  He now pays tax on only $900,000.

But if an artist in the same situation sells the work and contributes the earnings, he now has $1.1 million in income and a $100,000 tax deduction – so he pays tax on a million dollars.  The same as he would have had he not made the donation.  It’s a wash.  He’s given up the work but it’s done nothing for him tax-wise.

The two situations are not the same.

"There’s just not as much financial incentive to sue me. There’s a difference between suing an estate worth hundreds of millions and suing an individual." (UPDATED)

Jori Finkel interviews Richard Polsky about his new authentication service, which is now expanded to include Haring and Basquiat.

UPDATE:  "Wait, what?"

Update on the private museums question (UPDATED)

The Art Newspaper's Julia Halperin got her hands on a summary of the report the Senate Finance Committee recently submitted to the IRS on the issue of so-called private museums.

"Raises questions."  "Merits further scrutiny."  "Helpful shot across the bow."  There, you're all caught up.

As I've said before, my view is that, while some of these may not look so great right in this moment, if you take a longer term view, the benefits outweigh the costs.

UPDATE:  The Nonprofit Law Prof Blog:  "Inquiries of this type bother me somewhat.  It seems to me that current law regarding private benefit is probably sufficient to handle many of the perceived abuses ....  The drumbeat of the articles and the Senate inquiry may lead to additional regulation - and I suspect they will use a mallet rather than a surgical instrument to deal with the issue, if history is any guide."

BREAKING NEWS: Some art is held in storage (UPDATED)

The New York Times is on it.

Something must be done!

UPDATE:  The Art Market Monitor:  "Taken together, the stories betray a level of philistinism among the Times’s editorial staff that really ought to be examined by someone in charge."

Extradition Request in Knoedler Case Denied (UPDATED)

Glafira Rosales's boyfriend.  Health reasons.

UPDATE:  More here from Eileen Kinsella at artnet.

"You can’t copyright an idea." (UPDATED)

Lit pigeons edition.

UPDATE:  Once again, a dissenting view from Sergio Muñoz Sarmiento:  "This isn’t so much about copyright as it is about an Artist with a well-known art institution backing him up burying another artist for the exposure and the seemingly new 'idea.' Will the hypocrisy ever end?"

"What I found was an art world that is this closed, secretive world."

Barbara Pollack profiles Meridith Savona and the FBI's Art Crime Team.

60 Minutes did a thing on the Knoedler case this weekend

You can see it here.  Features appearances by friends of the blog (and Advanced Topics in Art Law guest speakers) Jack Flam, Greg Clarick, and Jamie Martin.

M.H. Miller has some thoughts here.  AFC points out the segment "reveals little," which is true.  I think the problem is it's impossible to explain what happened to a lay audience in a format like this. If you get it -- if you understand how implausible it was that there would just be this vast trove of undiscovered works by the giants of Abstract Expressionism -- you get it.  But if you don't see that, Anderson Cooper isn't going to convince you of it in 10 minutes.

"That magic trick illustrates the fundamental absurdity of treating contemporary art as an investment vehicle." (UPDATED 3X)

"In one simple statement, the creator took these 'assets'––ostensibly worth thousands of dollars each––and rendered them worthless to the market. So the next time you hear a silver-tongued broker explaining the wisdom of adding living artists' works to your portfolio, ask him how he'd feel about investing in Facebook if Mark Zuckerberg could suddenly 'de-authenticate' a few thousand shares any time Goldman Sachs pissed him off : )"

Tim Schneider on the Simchowitz-Mahama settlement.

UPDATE:  Brian Frye asks some good questions in the comments at Schneider's blog:  "I wonder about the metaphysics of 'de-authentication.' In other words, does it always work? And to what extent? If so, why does the market (i.e. investors) allow the artist to unilaterally determine the 'authenticity' of the work? Can you imagine a circumstance in which the market would ignore the artist's ipse dixit?"

Cady Noland is of course relevant here.

UPDATE 2:  And I should have linked to Amy Adler here:  "A recent lawsuit involving the artist Cady Noland illustrates the way in which a living artist’s disclaimer of a work, even when everyone knows it’s 'real,' can still transform it into a fake."

UPDATE 3:  A different view from Sergio Muñoz Sarmiento:  "Put simply, we don’t think this is more than another attempt by certain artist to bite the same hand that feeds them, and that feeds them well. In other words, it’s marketing ploy with little teeth, because unless your head is still stuck in the sand you’ve come to understand that it’s the collector and the art market that dictate what is a work of 'art.'"

So This Is Chrismas

"The outlook for Douglas Chrismas, the founder of one of Los Angeles’s oldest and largest galleries, seems to be growing bleaker by the day.  Sam Leslie, the forensic accountant who now runs the day-to-day operations of the gallery, has officially terminated Chrismas’s role with Ace Gallery and has filed a lengthy status report to the court, documenting millions of dollars diverted to mysterious accounts and dozens of works of art that have been moved to private storage."

"Prosecutors allege that Zukerman engaged in a complex scheme to avoid paying New York State sales and use taxes on the purchase of those paintings."

Sales tax crackdown continues.

"A settlement was reached in a skirmish over ownership of Pablo Picasso’s plaster 'Bust of a Woman,' according to a filing in New York federal court."

Breaking news.  Background here.

Tell me again about the public trust (Warhol Museum edition)

"The museum traded deaccessioned works from its collection for the painting."

"Jasper Johns, Robert Rauschenberg, and the Case of the Missing Flag"

By Greg Allen.

"NYS is currently focusing on the use of resale certificates (which exempt a purchase from sales tax) in connection with art purchases."

Diana Wierbicki and Seth Cohen:  How Art Collectors Can Stay Out Of Tax Trouble In New York.

Simchowitz Settlement

Story here.  Background here.

Tell me again about the public trust (somehow, the museum has made peace with parting with more than 600 pieces of Chinese ceramics edition) (UPDATED)

The Met is selling them at Christie's.  They have 3,600 other Chinese ceramics, so it's not like selling off 15% of them is that big of a deal.  And it's not like "the essential point of museum collections" is that "once an object falls under the aegis of a museum, it is held in the public trust, to be accessible to present and future generations."  Oh, it is?

UPDATE:  Daniel Grant emails a very good point:

"What struck me as odd is that the Met is defending its decision to sell (perhaps awaiting criticism of its move)...

"'About 60 percent of the things we’re deaccessioning came in 1879, so there wasn’t that much scholarship, there wasn’t that much discrimination,' Mr. Hearn. 'They’ve really been extensively reviewed; most have never been exhibited or published.'"

"...while disparaging these items in advance of a sale, which probably won't bolster the prices. I think the Met should pick one direction and stick with it."

"By digitizing and replicating objects of cultural heritage, we risk inviting a host of legal disputes over access and ownership."

An interesting piece in the Boston Globe a few days ago by Sonia Katyal and Simone Ross, on (among other things) 3D printing, art, and copyright.

"We are committed to rooting out tax abuses wherever we find them, especially in the art world, where the difference can be hundreds of thousands — if not millions — of dollars in lost tax revenue" (UPDATED)

NYT:  Developer Aby Rosen to Pay $7 Million in Suit Over Unpaid Taxes on Art.

UPDATE:  Tim Schneider thinks Rosen got a raw deal:  "[W]hile some dealers certainly view tax laws as made to be broken, I actually side with Rosen and Gelfand here, at least based on what's been reported. Given that transactions in the art industry can happen anywhere at any time, hanging works at home hardly means they're not actively on the market."

"'I’d collar the guy in pink' — that would be Jesus — 'because it’s clear that he’s causing all the trouble.'"

Teaching police officers to see better through art.

"It is a typical example of what can go wrong in a big company."

Lego admits it was a mistake to refuse Ai Weiwei's request for a bulk order last year.  This one was easy to see.

Felix Salmon annotates Amy Cappellazzo

Self-recommending.

Big Fake

ARTnews has a long post-mortem on the Knoedler trial.

If only they had some way to close this deficit

The NYT's Robin Pogrebin reports on financial trouble at the Met.  They're facing a $10 million deficit this year.  Staff reductions and reduced programming will follow.

But the important thing to understand here is that this is a choice.  They could close that deficit in a heartbeat if they wanted to.

As Berkeley's Michael O'Hare puts it:

"Wait a minute .... The Met has a collection worth at least $60 billion, thousands and thousands of objects almost none of which (by object count or square feet of picture) is ever shown or ever will be.  ... Selling just two percent ..., for example, could endow free admission forever. Selling .3 percent would cover that pesky deficit, also forever.  ... Nothing in the Met’s mission statement suggests its purpose is to accumulate as much art as possible where no-one sees it. But the Met and all the other big art museums have insulated themselves from this sort of awkward question by writing a code of ethics that forbids any museum from selling anything except to buy more art."

(For a longer version of O'Hare's argument, see here.)

Kevin Drum of Mother Jones seconds the motion:

"The art world generally believes that deaccessioning is a horror because art is a public trust blah blah blah. This is little more than meaningless word salad.  ... [I]t's hard to understand why art museums, alone among all the institutions of mankind, should be required to never sell anything they own. Perhaps this statement from the AAMD about the Delaware Art Museum's auction tells the real story: 'It is also sending a clear signal to its audiences that private support is unnecessary, since it can always sell additional items from its collection to cover its costs.'  We can't have that, can we? That would prevent museums from raising money with scary campaigns about shutting down or firing half their staff or cutting hours to the bone."

Drum also predicts what would happen if the deaccessioning taboo were ditched.

"What would happen? My guess is: nothing much. Museums that gained a reputation for doing it routinely would indeed suffer a drop in private donations, and that would act as a natural brake on the practice. Other museums would benefit, as they were freed to occasionally sell off less important parts of their collection in order to pay bills or undertake other worthy endeavors. And huge museums like the Met, with caverns full of artwork that's never shown and has limited scholarly use, could not only shore up their finances but improve the world by selling pieces to smaller, more specialized museums that would show it."

Agreed.

"Tisch's lawyer ... said his client realized in recent years that the painting was missing from her art studded apartment, but she wasn't sure where it was, whether in storage or out for repairs."

The Daily News on a New York state court lawsuit that presents interesting statute of limitations/laches issues.

"On April 6, Mr. Chrismas lost the keys to his gallery, after failing to make a $17.5 million court-ordered payment to settle his debts in a long-running Chapter 11 bankruptcy case."

Jori Finkel on the Ace Gallery bankruptcy.

"Los Angeles Art Dealer Is Arrested on Embezzlement Charges"

New York Times story here.

Cert denied in the Google Books case

Story here.  Background here.

"Why don’t many galleries list their prices?"

Paddy Johnson points to one explanation from artnet:  "So tax authorities can’t track their client purchases."  She offers another alternative:  "Isn’t this practice mostly about marketing? Luxury items frequently don’t come with a price tag attached to the piece. Part of what you purchase, when buying these goods, is the doting sales pitch that comes along with it."

"We have to have some perspective on suffering."

Ann Freedman speaks.

No Soup Cans For You

Seven Warhol Soup Can prints have been stolen from a Missouri museum.  Michiko Kakutani tweets that, by breaking up the series of 10, the thieves "devalu[ed] whatever profits they would hope to make off the heist."

BREAKING: Dismissal Granted in California Resale Royalty Case (UPDATED 3X)

I'll post a link when I have one, but the District Court in California has granted the defendants' motion to dismiss (what's left of) the California Resale Royalty lawsuit on the grounds that the state statute is preempted by the first sale doctrine under the federal Copyright Act.  The court (affirmed by the Ninth Circuit) had previously ruled that the statute could not reach sales that took place outside of California.  This decision now throws out the whole statute -- even for sales within California.  Back up to the Ninth Circuit we go.

UPDATE:  News story here.

UPDATE 2:  Here is the Los Angeles Business Journal.

UPDATE 3:  Here's the decision.

"Artist Claims Copyright to Four Photos of Robert Mapplethorpe in $65 Million Lawsuit"

Also while I was away, a "poet, actor, photographer, and makeup artist" named James R. Miller filed a lawsuit against the Mapplethorpe Foundation (and others) claiming copyright ownership in four Mapplethorpe works created in 1979.  Benjamin Sutton has the details here.

The first hurdle Mr. Miller is going to face is the statute of limitations:  he claims to have known the photos were attributed to Mapplethorpe since 1988, and that he has "attempted several times over the last 27 years to correct the historical and artistic record."

You may want to brace yourself for this

But the Tennessean reports that the Stieglitz Collection has returned to Fisk University after a two-year stint at the Crystal Bridges Museum.  Not only that, it returns to a newly renovated space at the university.  This tragic story just keeps getting worse.

Swedish Model

Art F City notes a Swedish court ruling against Wikimedia, holding that "images of public art are not public domain, but belong to the artists who created the original works" and asks if "a policy like this in the US" would make “Cloud Gate” selfies illegal.  The answer is that that is the policy in the US -- i.e., the copyright to works of public art belong to the artists who created them.

Another reminder about the idea/expression distinction

Via Rebecca Tushnet.  Earlier example (among many) here.

"It hardly comes as much of a surprise that amid the high-profile scandals and tales of political corruption in the Panama Papers, art is something of a constant" (UPDATED)

I was away last week (I had a tip on the location of Mr. X, but sadly it turned out to be a false lead), but the big news was that the Panama Papers include a ton of art-related stuff.  Dig in here, here, and here.

UPDATE:  Tyler Cowen on a more general question raised by the leak.

Messier (UPDATED)

Counterclaims in the Simchowitz suit mentioned here.

UPDATE:  AFC:  "Everyone in this case sounds insane."

Is a Popemobile held in the public trust?

If not, why not?

The church is a 501(c)(3) organization, just like museums are.  Does that mean that "we" own all its assets?  Of course not.  So why is it any different for works of art?

"Replace 'Caspersen' with 'Knoedler' in this @matt_levine column and you have some great art-market analysis"

Says Felix Salmon.  The column ("Real Investment Adviser Sold Some Fake Investments") is here.

"Local activists see it as a precious piece of Chicago’s waterfront, a place of open views and public ownership."

The New York Times had a piece a couple days ago about the battle over the museum George Lucas wants to build in Chicago, where, amusingly (to me anyway), supporters of the museum have bumped up against the real "public trust doctrine."  (As I explain in my chapter in this collection, there is a public trust doctrine, but it's not at all what the Deaccession Police think it is. For them, it's just a phrase they've latched onto to achieve their policy goals.)

"The artist whose painting got her dumped by Charles Schwab" (UPDATED)

Felix Salmon tells the tale.

UPDATE:  Guelda Voien has some thoughts.

Yawn

The NYT's Randy Kennedy reported last week that the National Academy -- "the nation’s oldest continuously operating artists’ society" -- is selling its Fifth Avenue home and moving to ... no one knows where.

As far as I can see, this has been greeted mostly by crickets.  Lee Rosenbaum has been attempting to work up some outrage, but so far no one seems to be following her lead.  Maybe it's out there but I missed it.

Compare that to the apoplectic reaction several years ago when the museum sold two of the more than 7,000 works in its collection, with the same goal in mind:  to give itself "the financial freedom to think more creatively about how to exist in the 21st century."

Why is the one sale not a big deal and the other the end of the world as we know it?

Are the buildings not "held in the public trust" to exactly the same extent as the artworks?

How do some assets come to be held in the public trust and others not?  What is the mechanism?

It's almost as if the notion that the works are held in the public trust is a convenient fiction.

"Sandy-Related Art Damage Suit Against Christie's Is Revived"

The New York Law Journal [$]:  "The panel cited Kimberly-Clark Corp. v. Lake Erie Warehouse, Div. of Lake Erie Rolling Mill, 49 AD2d 492 (4th Dept 1975), in which that court noted that while the UCC permits a warehouseman to limit the amount of liability, it cannot completely exempt itself from liability as imposed by UCC Article 7."

You can read the decision here.

Whose art is it?

Two views of the question, from Kanye West and Richard Prince.

Prince's position is currently being tested in the courts.

Stolen Bacon

"The five works were stolen last June although it is unclear why details have not emerged until now."

"Will report back to you all in a generation to see if my instincts were right."

Tim Schneider on the Artist Pension Trust, which I mentioned last week:

"Personally, I'm torn about this concept. On the one hand, I'm in favor of anything that will get artists to invest and, as a result, gain some of the same financial security that workers in other sectors of the labor market enjoy. On the other hand, my gut tells me that most, if not all, artists would be better off if they just opened an IRA, used the proceeds from 20 sales to buy a low-cost S&P 500 index fund, and re-invested the dividends until retirement."

Disaster averted

A couple years ago, I mentioned a New York state court decision that "could wreak some serious havoc on the world of authentication litigation."  Briefly, the First Department had held that, unless a plaintiff can produce an expert who examined the work before he bought the work and can testify that it’s the same work that he now has in his possession, he would lose.

Now, in a subsequent decision in the same lawsuit, the First Department narrows that rule to the specific (odd) facts of this case:

"Contrary to defendants' contention, our decision need not have disastrous effects on the art market. We limit both this decision and our decision on the prior appeal to the facts of this case, i.e., a situation where defendants did not claim until many years after the sale and consignment that the artworks were forged, and they were unable to produce the people who had custody of the art between the time defendants sold it and the time they returned some of it to the United States; and plaintiff claimed that defendants, or the non-produced custodians of the art, forged it; and the custodians resided in a country that did not abide by the Hague Convention, so that plaintiff was unable to obtain evidence from them."

So if you've got a case with facts like that, you're in trouble.  Otherwise, as you were.

"If the investigation advances, Bouvier could face fraud charges in the U.S." (UPDATED)

Bloomberg:  "Federal prosecutors, following the lead of European authorities, have opened an inquiry into one of the art world’s consummate insiders, Yves Bouvier[,] ...according to people familiar with the matter. The move marks the first time that federal authorities have trained their sights on a scandal that has shaken Europe’s notoriously private ecosystem of art dealers, middlemen and collectors. While still in its infancy, the U.S. probe also underscores prosecutors’ general concerns about the opacity of the market in art -- which, like high-end real estate, can serve as a conduit for money laundering."

Some background here and here.  And there was a good article in The New Yorker recently which I think I neglected to link to at the time.

UPDATE:  The Art Market Monitor:  A "thin, vague" story.

"Since its founding, the trust has evolved significantly."

"This month it will make its first distributions, rather than wait to make a large payout at the end of a 25-year period as originally planned, along the lines of a pension fund."

The New York Times looks at the Artist Pension Trust at age 10.

(Oddly, it seemed to turn 10 two years ago too.)

However old it is, there still seem to be some reasons for skepticism.

Apparently they are held in trust for the public of the city of Bradford only

Because it's "an appalling act of cultural vandalism" to move a collection of photos to the Victoria & Albert Museum in London.

Christie's Suing the Mugrabis (UPDATED 2X)

For non-payment ($32M) on a Basquiat.  Story here.  Court papers here.

UPDATE:  A response from Jose Mugrabi.

UPDATE 2:  That was quick.  Settled.

Art dealer charged with fraud previously tried to sell the Matter Pollocks

Story here.  Background on the charged dealer here.  Background on the Matter Pollocks here.

"Somehow, the museum version of the 'public trust' doctrine provides that artworks protected by the public trust cannot be sold unless it is convenient."

"It is telling that the legal scholars who have considered this argument have been ... unsympathetic. And that proponent of the 'public trust' argument tend to respond to criticism by raising their voices."

Brian Frye gears up for a panel discussion on the Detroit "grand bargain" with some thoughts on the state of the deaccession debate.

Motion to Dismiss in Latest Prince Suit

Brian Boucher has a report here.  Background here.

This is an interesting strategic decision.  It's very hard to win a motion to dismiss on fair use.

Settlement in the Met "Suggested Admission" Lawsuit (UPDATED)

I suggest you read Helen Stoilas's report in The Art Newspaper.  Background here.

UPDATE:  More from Randy Kennedy in the Times.  I suggest you read that too.  I'm not recommending it -- don't get me wrong -- only suggesting it.

"The French ruling gives the Pelham side more legal justification to press for the discovery in New York about the terms of the Gagosian sale."

NYT:  Setback for Picasso’s Daughter in Battle Over Sculpture.  Background here.

"A guarantee—offered directly or by a third party— is a real price. Someone has to pay it."

The Art Market Monitor:  Guarantees do not "distort" the market.

"The Knoedler sales only dealt in a difference of degree, not kind, from the wholly legitimate day-to-day business of the secondary market."

"And in that sense, the circumstances surrounding the de Soles' 'Rothko' aren't quite the extreme outliers they're being made out to be."

Tim Schneider on How far is too far?

"I'm happy that we went to court, as the truth was established."

Domenico De Sole speaks.

The Knoedler Trial May Be Over ...

... but the Knoedler news keeps coming:  "Jose Carlos Bergantinos Diaz, the alleged partner of Glafira Rosales in her sale of a cache of counterfeit paintings through the Knoedler Gallery, can be extradited to the United States, Spain’s National Court has ruled."

"Perhaps the main takeaway is this: Hell hath no fury like a woman scammed."

The Observer:  More Than Money: Inside the Knoedler Art Fakes Scandal.

What it looks like to take the notion of the "public trust" too seriously

In a review of works from the collection of Paul Allen at the Phillips, Pulitzer Prize winning critic Philip Kennicott tells us:

"But the problem with collecting masterworks of great artists is that the act of ownership is in itself a kind of theft, stealing from the public commons of genius. Put another way, once a work of art is important enough to be of interest to a man like Allen, it belongs to all of us. He may not know that, but we do."

Correction

The narrative of the week seems to be that we're seeing a "correction" in the art market.  See here, for example, and here.

But I've never understood how that concept is supposed to apply to the art market.  "Correcting" to what?  Why do we assume the newer prices are correct and the older prices were incorrect? Sure, the newer price is lower.  But how do we know that it is more "correct" than the old one?

I still think this may be closer to the mark.

The Top 9 Takeaways From The Knoedler Trial

By Eileen Kinsella and Sarah Cascone at artnet.  I'm (briefly) quoted.

It's over (UPDATED 6X)

Knoedler trial settles.

UPDATE:  Here is the New York Times story.  Here is Eileen Kinsella at artnet ("It was an anticlimatic end to over two weeks of dramatic and often damning testimony ...").

UPDATE 2:  "The fact that this was a fraud from 1994 to 2009 was totally unavoidable to see. We are proud of these clients, who had the resolve to make it to court."

UPDATE 3:  The NYT's Patricia Cohen:  "[Knoedler] must have been worried about what former president Ann Freedman was going to say at trial."

UPDATE 4:  "When a litigant perceives, during the course of a trial, that there’s a good chance he’ll lose his case, there is an impetus to settle."

UPDATE 5:  Some final thoughts from Jay Grimm.

UPDATE 6:  Laura Gilbert's post-mortem.

MORE BREAKING KNOEDLER NEWS (UPDATED 3X)

"Due to 'unexpected developments', proceedings end abruptly today in Knoedler case just before Ann Freedman and Michael Hammer's testimony."

UPDATE:  "This led to a great deal of speculation among the lingering journalists about whether or not the De Soles were going to settle with Knoedler and 8-31."

UPDATE 2:  "The overwhelmingly likely explanation, according to legal scholars in the courtroom, is that the parties have reached a settlement in principle and will spend the afternoon working out the specifics."

UPDATE 3:  "[T]he crowd included an art law class from NYU."

BREAKING KNOEDLER KNEWS (UPDATED 2X)

Ann Freedman has settled with the De Soles.  The case against the gallery continues.  "The settlement follows damaging testimony about how much Knoedler and Ms. Freedman earned from the sale of more than 30 fakes that were said to be by Abstract Expressionist masters but were actually painted by an all but unknown Chinese artist in the garage of his Queens home."

UPDATE:  "A federal judge told jurors who have been hearing the fraud suit in Manhattan about the settlement and said that they should not speculate about the details or infer anything about the remaining case before them."

UPDATE 2:  Jay Grimm on the news:  "Freedman has claimed for years now that she too was a victim and that she was delighted that this case is going to trial so as to clear her name.  Settling at this juncture does the exact opposite.   From my perspective, then, the only logical way of interpreting the settlement is that Ann Freedman caved in because the trial was not going well for her."

"And so there's a reliance and a sort of gentleman's agreement within the art world that has existed for centuries now that says, you know, if we say this is authentic, it is to the best of our knowledge, and that's that."

Noah Charney on the Knoedler trial.

The 5 Best Moments of the Knoedler Fraud Trial So Far

From artnet's Cait Munro.

Knoedler Trial Day 10

New York Times story here.

Knoedler Trial Day 9 (UPDATED 2X)

"I think she may have brought it over in her car."

("It" being an $8.3 million "Rothko.")

UPDATE:  Purchase College's Jeff Taylor:  "If a Chinese immigrant in Queens could do them all quite convincingly, one has to wonder how many other abstract expressionist fakes have been bought and sold."

UPDATE 2:  Laura Gilbert:  Knoedler asked forensic conservator to revise "negative" report.

"Art Dealer Is Arrested on Charges of Selling Fake De Kooning Artworks" (UPDATED)

Brian Boucher has the story here.

UPDATE:  More details about the charges here.

Knoedler Trial Day 8 (UPDATED 2X)

Run like hell.

UPDATE:  Laura Gilbert:  "So far, seven of the 11 people listed have testified that they did not authenticate the work sold to the De Soles."

UPDATE 2:  Jay Grimm continues to provide the most in-depth coverage.  Keep scrolling.

Knoedler Trial Day 7

"You do understand that all of the works were fake?"

Knoedler Trial Day 6 (UPDATED 4X)

"It's a bit rich."

UPDATE:  New York Times story here.

UPDATE 2:  M.H. Miller here.

UPDATE 3:  Laura Gilbert here.

UPDATE 4:  The Guardian's Jonathan Jones here.

Wrapping Up Week 1 of the Knoedler Trial

M.H. Miller here.

Jay Grimm here.