FOur years ago, in 2018, a fire broke out on the third floor of Revlon beauty mogul Ron Perelman’s Hamptons home. Reports at the time said that most of his multimillion-pound art collection had survived unscathed, but a $400m (£337m) contentious lawsuit in New York courts claims that five of the paintings hanging in the flats lower ones have lost their “oomph” as a result of smoke and water damage.
The lawsuit pits Perelman’s holding companies against the collection’s insurers, which include Lloyd’s of London, in a high-stakes battle that some say typifies the new litigious nature of the art world that used to operate on a grip. hands and a simple purchase receipt. , but now it is based on voluminous contracts peppered with stipulations and clauses.
The four paintings at issue in the case are not merely ornamental. One is Cy Twombly’s Untitled (1971), acquired in 1993 and now estimated by Perelman, according to legal documents, at $125 million (£105 million). Two Andy Warhol paintings, Elvis 21 Times, valued at $75 million, and The Campbell’s Soup Can, were estimated at $100 million; Ed Ruscha’s Standard Station for $60 million, and Box Smashed Flat for $50 million.
Perelman told the court that Warhol Elvis “doesn’t pop like he used to. You know, I’m coming back, that’s why they called it pop art.” When asked what changes he noticed in Twombly, Perelman said in his testimony: “All the images lost their luster, they lost their depth, they lost some of their definition and they lost a lot of their character.”
Twombly’s painting, he added, “just lost, just lost its oomph”.
A witness for billionaire Jennifer Mass, president of Fine’s Scientific Analysis ArtHe said he discovered that all of the paintings had suffered “fire-related damage,” according to court documents.
The character of the paintings, of course, is very subjective. New York art restorer Lisa Rosen told the Observer that she believed a thin layer of soot from the fire had slowly settled on almost every surface.
“Soot is oily. Over time, impurities from the home’s atmosphere would settle on surfaces (including paints), creating an obfuscating patina, falsifying the original colors. As if the painting were wearing sunglasses,” says Rosen.
But experts called by the insurers, who have already paid out some $141m (£119m) of the claim, say Perelman’s companies did not prove physical loss or damage. An insurance adjuster said the policy does not cover “wear and tear, gradual deterioration, [or] inherent vice”, nor does it cover “accelerated aging”.
Any damage, the insurers say, predated the fire and they were sued before they could fully investigate. Furthermore, they argue, the claims were made a year after the incident when Perelman, named America’s richest man by Institutional Investor in 1989 and regarded as a preeminent “corporate raider” of the time, was selling assets while Revlon was dodging bankruptcy. . In 2018, it was estimated to be worth $20 billion, a figure that has since dropped to $2 billion.
The insurance claim, they said, “coincides with a time when, according to news reports, Mr. Perelman was desperately seeking cash to satisfy maturing debts.” In addition, the images were insured at “multiples” of their fair market value and the five paintings “happen to have the five highest insured values” under the policies.
The episode also coincides with an increase in litigation in the art world, including copyright claims about the “fair use” of images, provenance, sale of museum collections or “disaffiliation”along with fraud (the daniel philbrick saga), crackdown on looting and counterfeiting of artifacts (the The FBI confiscated two dozen “Basquiats” at the Orlando Museum of Art in June).
“The reasons for the increase in high-profile cases may be self-evident: the astronomical amounts of money floating around the art world, the proliferation of websites selling art online, the lack of transparency or regulations around art transactions, and a little more. mysterious, or at least unique in the art world, with its idiosyncratic and unspoken code of conduct. noted the Robb Report in August.
As art values rise, so does the volume of paperwork. Sales contracts now often include stipulations about resale after collectors or investor consortia entered the market in order to sell art for a profit, a practice that is considered contrary to the spirit of the company in part because it exposes young and inexperienced artists to the market. whims of an auction.
To guard against the practice, art dealers began padding contracts with clauses. At auction houses, the opaque system of third-party guarantees, in which sellers are guaranteed a certain price, has also distorted the system.
Surprisingly, the recent $1.5 billion sale of Microsoft co-founder Paul Allen’s collection at Christie’s is not believed to have been as profitable for the sales floor because the warranties were so high.
Privately, some art dealers say a business once built on handshakes and relationships is changing, and not for the better. “Onerous contracts will end up hurting a market that was built on relationships and trust, with the result that art will become like any other regulated industry and lose its luster,” warns New York-based attorney Mile Quinn. “At that point, it’s not a relationship-based business and the government and the courts will step in.”