Art

With the art world airing its dirty laundry, it's getting harder to pretend the community is one big happy family

An avalanche of embarrassing lawsuits have pulled some of the biggest and most respected names in the art business in the country into court. What gives?

Let’s tick them off fast: The mother of longtime gallerist Charles Cowles has sued Larry Gagosian, charging that her son gave him a Lichtenstein even though he did not own the paining and had no permission from his mother to sell it. She said that Gagosian misled him on the value of the painting and then secretly kept a fatter commission on the deal. Clients of L&M Gallery and David Zwirner sued, both in 2010, claiming that their confidentiality was breached when it became profitable to do so.

"These are Upper East Side dealers, superstar names, pied-piper collectors. The kind of people who don’t like their dirty laundry aired in court."

Fall 2012 brought two more contretemps: a suit against Gagosian over a Koons sculpture by his client of decades, Ron Perelman, which was later dropped, and another by an art foundation against Forum Gallery, claiming overcharging. Knoedler, one of Madison Avenue’s most established white-glove art shops, has been sued for selling fakes. And perhaps the one that kicked it all off: Lawrence Salander, the Bialystock & Bloom of the art world, famously and creatively sold 50% stakes in various Old Master paintings to multiple investors and in 2011 was sentenced to jail for 29 counts of grand larceny. For art dealers, “It’s become a teaching moment,” says one top art-law attorney, “of what not to do.”

These are Upper East Side dealers, superstar names, pied-piper collectors. The kind of people who don’t like their dirty laundry aired in court. And, for years, it wasn’t.

It would be easy, though wrong, to attribute the change to people just being more litigious. Lawsuits in the art world have always happened: over title, over smuggling, sometimes over authenticity. They rarely made it print, and even less often warranted dinner-table conversation at Da Silvano. (Oh, for the days when an art-world dinner at La Goulue was chocolate profiteroles and rumors of handcuff fiends at the Met. Alleged.) What’s happening now instead is a perfect storm, if you will, of social, financial, geographic, even demographic shifts in the tony trillion-dollar art business.

What all these lawsuits have in common other than oil-on-canvas and seven-figure price tags is a keen sense of secrecy, promises, friendships, infidelity and treachery. In case after case, it’s personal. The art world’s dirty laundry is being aired right now because, at the price levels we’ve reached, it’s no longer possible to pretend we’re all friends.

And that’s, to some degree, a surprise. By and large, the art world is a tight-knit bunch; incredibly snobby to outsiders (just try dressing in bright colors and asking price questions at Mary Boone’s front desk) but warm, genuinely warm, to each other. People who really love art recognize each other and bond. The Grand Tour inspires it: once you’ve shared Riesling in four countries, it’s harder to be assholes to each other, but with profits like these to be made, ever-so-tempting.

"By and large, the art world is a tight-knit bunch; incredibly snobby to outsiders...but warm, genuinely warm, to each other."

So the accelerating Grand Tour has turned business colleagues into friends, and a soaring market turns them all back into investors. Websites like artnet.com have made data on previous sales more accessible, and thus charges of overcharging are easier to support. And with email, there’s also often a cringe-worthy paper trail.

When it comes to business, “the culture of the art-gallery world is a disaster,” says Victor Wiener, an art appraiser who investigated Steve Wynn’s ripped Picasso for Lloyd’s of London and who testifies as an expert witness in trials, including the Andy Warhol estate’s. “It’s a handshake culture. I see very few formal agreements and too many casual relationships. And, while it’s easier to get art out of country than money out of a bank account, it’s a vague asset: You don’t quite know what it’s worth. “

Aging has perhaps made the stars and stalwarts of the industry more prickly. Once an “upstart,” Gagosian is now 67 (“bad boy” Jeff Koons is 57).  Dealers have become celebrities, too and, thus, more attractive lawsuit targets. Notes Michael Findlay, director of Acquavella Galleries and author of “The Value of Art: Money, Power, Beauty,” only a generation ago, a promotional campaign for an artist or gallery would have been “not only absurd, but self-defeating…collectors liked to discover artists for themselves. Word of mouth was potent.” Now, galleries “keep themselves in the news.” By choice, and sometimes, not.

"...lawsuits splatter mud on everyone involved, even the innocent – whether that be the art dealer or the mega-collector."

Confidentiality agreements are routine — and routinely breached, even inadvertently. Collector David Martinez bought a Mark Rothko painting in 2007 through L&M from a collector who requested he sign a confidentiality agreement. Three years later, Martinez sold it at Sotheby’s, whose Tobias Meyer launched a marketing campaign for the piece. So many details of the work were disclosed it “outed” the seller, who had previously had the painting on loan to the Dallas Museum of Art. The Rothko, meanwhile, made a mint. That money that would have gone to the seller, her case argues, if she had sold it at auction to similar fanfare. But is the suit over money – or embarrassment?

Craig Robins, the well-known Miami real estate developer, charged in his lawsuit that Zwirner violated a promise of confidentiality when he told artist Marlene Dumas that he had handed a sale of one of her works for Robins. (Dumas put him on a “grey list” for doing so, a move that denied him first access to her works.) It was settled before it got to court, but such lawsuits splatter mud on everyone involved, even the innocent – whether that be the art dealer or the mega-collector.

The issues raised in these disputes go to the core of the art business, says Wiener. “Few secrets are kept. The temptation of trumping someone at a cocktail party with a juicier story is just too great.”

What’s sad about the fact that the art world can’t keep its mouth shut these days is that what people mostly seem to be saying is “I thought you were my friend.”