Source: Bloomberg, by Lindsay Pollock
A dozen U.S. Marshals and police officers were among the first visitors to the Art Basel Miami Beach fair yesterday as they seized paintings by Fernand Leger, Joan Miro, Edgar Degas and Yves Klein following an insurance dispute between two dealers.
Late this afternoon the feuding dealers said that they had tentatively resolved their dispute and that the seized paintings would be back tomorrow. They would not discuss the terms of the proposed settlement.
The paintings were confiscated from the fair at the convention center in Miami Beach, Florida, about 90 minutes before the V.I.P. opening at noon yesterday for thousands of invited guests including casino mogul Steve Wynn, billionaire investor Wilbur Ross and designer Calvin Klein. The fair opened to the general public today and ends on Sunday.
The works had hung in the booth of Zurich-based Galerie Gmurzynska among paintings and sculptures by Pablo Picasso, Robert Indiana and actor Sylvester Stallone.
Artworks have never been seized by authorities in Art Basel Miami Beach’s 8-year history, said Sara Fitzmaurice, a fair spokeswoman.
“We were there to execute a private federal court order,” said Barry Golden, a spokesman for the U.S. Marshal Service, Southern District of Florida. “Artworks were seized.”
Art Basel Miami Beach hosts over 250 galleries from 33 countries. About 10 satellite fairs coincide with the bigger show, which is the largest and most prestigious modern and contemporary art fair in the U.S. in terms of exhibitors.
The seizure was connected to a lawsuit filed in New York Federal Court on July 13 by Edelman Arts Inc. as assignee of XL Specialty Insurance Corp. Edelman Arts is a New York gallery run by former Wall Street investor Asher B. Edelman.
Edelman, in conjunction with XL Specialty Insurance, which assigned its claim to Edelman in exchange for moneys owed, sued Galerie Gmurzynska over a damaged Robert Ryman painting. Ryman is known for his white minimalist surfaces.
The lawsuit alleged that in 2007 Edelman consigned Ryman’s 1985 “Courier I” to Gmurzynska for sale at Art Basel Miami Beach and was insured for $750,000. The work was returned with a “deep indentation,” or “gouge” according to the lawsuit, and the defendant refused to pay the insured value.
The suit claims an additional $250,000 for “willful conduct of defendant” and “reprehensible motives and such wanton dishonesty as to imply a criminal indifference to civil obligations.” The suit resulted in a default judgment for the plaintiff for about $765,000.
“We had a judgment against Gmurzynska for damages done to a work of art and executed the judgment on behalf of the insurance company,” Edelman said in a telephone interview from his booth at the Art Miami fair across town.
Edelman accompanied the marshals. The Ryman work was not on display at Gmurzynska. The seized artworks, which are not owned by Edelman, reflect about 10 times the value of the judgment, the standard amount confiscated for auction, he said.
“I was assisting the marshals by valuing the paintings,” said Edelman, who also made time at the convention center to buy an Agathe Snow sculpture featuring cartoon character Homer Simpson from Lower East Side dealer James Fuentes.
Gmurzynska’s lawyer, Peter R. Stern of McLaughlin & Stern LLP, declined to discuss ownership of the seized artworks, and it is unknown whether they are gallery inventory or works on consignment.
“The gallery was totally surprised by the events that occurred,” said Stern. “Edelman Arts, unbeknownst to the gallery, obtained a default judgment against my client without warning. The marshals appeared. The gallery is attempting to clarify the matter.”
Edelman said the artworks would be auctioned by the U.S. Marshals to pay XL, Edelman Arts and lawyers’ fees, with any surplus going to Galerie Gmurzynska.
The four paintings are valued at more than $6 million, according to sources familiar with the works. Comparable works by Degas alone have recently sold at auction for about $7 million. The confiscated Degas painting depicts jockeys on horseback.
“The parties have in principle resolved the dispute,” said Stern this afternoon. “The paintings are expected to be back on the walls of the gallery space tomorrow.”
“In principle they have offered to pay what they owe and at that time I will release the paintings,” said Edelman. The seized artworks are being held in a Miami storage facility, according to Edelman. “My intent is simply to get paid what is owed to my insurance company.”
Edelman said he expects payment on Friday.
Gmurzynska’s booth attracted even more attention as the fair opened. Gallery consultant Princess Michael of Kent, clad in a lavender suit, chatted with clients and visitors at the booth.
Stallone held court in the back half of the stand, where his colorful expressionistic paintings hung on a wall. It is the actor’s first gallery show.
As photographers’ flashbulbs exploded around the stand, the Los Angeles-based Stallone discussed his work, admitting he was intimidated to exhibit in close proximity to his artist heroes like Colombian artist Fernando Botero.
“I wouldn’t exactly say I have a following,” Stallone said in an interview. He said he usually gives his paintings as gifts to relatives, but two paintings had sold by the afternoon, each priced between $40,000 and $50,000.