PML Successfully Defends Title Claim to Renoir’s La Balayeuse

NEW YORK– Pearlstein McCullough & Lederman is pleased to announce that the New York Surrogate’s Court has granted our motion and dismissed a title claim to Renoir’s La Balayeuse against our clients MGM Resorts, Mirage Resorts and Bellagio.

Bellagio Gallery of Fine Art purchased Renoir’s La Balayeuse from Sotheby’s in 1999 and consigned it for sale to Christie’s in May 2016. Days before Christie’s auction, Mark Salz contacted Christie’s to claim title to La Balayeuse. Mark alleged that his father, Sam Salz, had owned La Balayeuse and that Janet Salz (Sam’s second wife and Mark’s step-mother) had fraudulently withheld La Balayeuse and other unspecified paintings from her accounting of Sam’s Estate.

Bellagio engaged us on an emergency basis and, days after the auction, Mark’s lawyer contacted us to demand a settlement payment, which we refused. However, Christie’s froze the sale proceeds of $900,000 until we negotiated a stipulation to release the funds.

Mark then commenced a petition for turnover of the sale proceeds against Bellagio and a petition for discovery of the other unspecified paintings against Janet’s trust, Sotheby’s, Christie’s and Day & Meyer. Bellagio and the other respondents moved to dismiss.

The Court granted our motion because Mark failed to show that Sam’s estate owned La Balayeuse and because the statutes of limitations barred his claim. The Court also granted the motions to dismiss submitted by the other respondents.

The case holds two important lessons for auction consignors. First, the provenance of even well-known paintings can be challenged. Second, consignors should negotiate their consignment agreements, which are written to protect the auction house if a claim is made to the property, no matter how thinly supported.

The decision of the New York Surrogate’s Court in the Application of Mark Salz, as Limited Administrator of the Estate of Sam Salz, for Turnover of Property Withheld from the Estate can be accessed here.

PEARLSTEIN & MCCULLOUGH NEGOTIATES JOINT VENTURE BETWEEN ARTVEST PARTNERS AND TEFAF TO HOST SPRING AND FALL ART FAIRS AT THE PARK AVENUE ARMORY

NEW YORK – Pearlstein & McCullough (“P&M”) today announced that its client, Artvest Partners LLC, formed a Joint Venture with The European Fine Art Foundation (“TEFAF”) to own and operate the newly rebranded “TEFAF/NewYork/Fall” fair and the “TEFAF/NewYork/Spring” fair in improved and significantly expanded space at the Park Avenue Armory.

The Joint Venture was formed by a series of transactions whereby the Joint Venture acquired the “International Fine Art Fair,” held each Fall at the Armory, from its UK owners, and Artvest contributed the right to host the Spring fair at the Armory. Going forward, Artvest will continue to operate the 2016 Spring Masters Fair at the Armory and TEFAF will continue to operate the TEFAF-Maastricht fair.

The Joint Venture between Artvest-TEFAF represents a significant development in the art fair market and is another sign of the gradual migration of the international art market to the US.

P&M acted as counsel to Artvest and co-counsel to the Joint Venture.

P&M Partner, William Pearlstein stated “it’s a pleasure to use our transactional skills to help top-tier art world clients like Artvest and TEFAF complete a complex, international transaction that could transform this segment of the art market.”

The New York Times announced the Joint Venture.

 

About Pearlstein & McCullough LLP P&M is a boutique law practice based in New York servicing the international art trade. P&M’s partners understand the specialized vocabulary of the art world, understand the concerns of dealers, collectors, auction houses and museums, and have the seasoning and experience to help clients navigate the special problems that often arise in the art market. Every day, P&M helps clients who buy, sell, collect, and consult on art for a living or as part of their lives. As commercial lawyers immersed full-time in the art trade, P&M’s partners work comfortably with people who handle art for a living.

The “Deceptive” Ivory Trade

By Michael McCullough       JUNE 18, 2014

New York- In a statement on the state-sponsored ban of the sale of ivory in New York, Assembly Speaker Sheldon Silver, employing one of the much misused phrases of our time, described the new legislation as necessary to fight “terrorist organizations.” There was a sort of half-truth to what he said. But he would have been much more nearer the mark if he had described the actual situation as what it is: combating the sale of illegal ivory by shutting down the antiques market.

Year-after-year, the largest amount of elephant ivory sold in New York has been the legal and documented trade in antiques. Ivory was used throughout history as a medium for artistic carvings and paintings, as well as a constituent of the decorative arts. However, in more recent times, unfortunately, ivory has been used for the creation of tourist trinkets and decorative carvings. The use of ivory in the European arts ended before the Second World War, so the continued use of ivory in modern times was largely done in Africa and Asia. The United States had a tradition of using ivory for portrait miniatures, silver tea sets, cutlery and the like, but these uses ended in the early part of the last century.

For the past twenty years, auctioneers and antique dealers have been licensed by the New York State Department of Environmental Conservation (DEC) to sell elephant ivory in New York. Two years ago those licensing standards were tightened to require the sellers to submit detailed inventory lists, as well as the names and addresses of sellers and buyers, to the DEC as part of the licensing process. In January, New York Assemblyman Sweeney conducted a public hearing to discuss the illegal trade in elephant ivory, and part of the testimony given by critics of the DEC and by the DEC itself was that the regulators didn’t have the staff or expertise to properly review these license applications. In consequence of this, Mr. Sweeney decided to introduce a bill in the Assembly to ban the sale of all ivory objects in New York State.

Mr. Sweeney had the backing of various wildlife organizations, such as the Wildlife Conservation Society and the Natural Resources Defense Council, among others. These wildlife groups object to the sale of antique ivory because they believe it encourages people to collect objects made of newly-poached ivory. This is another half-truth. While the sale of antiques gives value to ivory as an important material used in historical artworks, the people who buy art and antiques are not interested in contributing to the poaching problem in Africa. In fact, all of the antique dealers’ organizations were in favor of more strict licensing and enforcement standards to deal with the problem of newly-carved tourist trinkets and decorative carvings entering the market. They proposed to the Governor and Legislature that only antique ivory over 100 years of age and subject to strict appraisal and documentation standards should be sold in New York. This, coupled with increased resources for the DEC to review license applications, would have addressed the DEC’s capacity to properly regulate the market. But the wildlife groups’ criticism of the DEC and the licensing process was always a diversion; people who were importing and selling newly-poached ivory were not applying for DEC licenses. It has been illegal since 1976 under the federal Endangered Species Act to import raw ivory into the United States for commercial purposes. The people selling newly-poached ivory were brazenly aware of the illegal nature of the wares and sold them anyway with full knowledge of the problems in Africa. In contradistinction, New York’s auctioneers and antique dealers played by the rules and weren’t contributing to the problem.

The fact is that both the wildlife groups and the antiques trade were right: there is a very serious crisis in Africa with the killing of elephants, but the continued sale of documented, bona fide antiques was in no way contributed to the danger. As a result, there should have been an accommodation that would give the DEC more power to arrest and prosecute people involved with the illegal ivory trade while allowing for the legal trade in bona fide antiques. But last minute calls from Hillary Clinton and Robert Kennedy, Jr. to Governor Cuomo and the leaders of the Legislature convinced lawmakers to restrict the sale of antiques to those containing less than 20% by volume of ivory. While at first glance this might seem like a reasonable solution, it will certainly decimate the decorative arts market in New York City; the overwhelming majority of valuable objects on the market made of ivory contain more than 20%. Auctioneers and dealers will no longer take consignments of the valuable ivory objects and those objects, along with the permitted objects with less than 20%, will be sold elsewhere. If you add to the equation the efforts by the Federal government to further restrict the sale of ivory in interstate commerce, then these important artist creations will slowly leave the United States and will steadily flow to the only part of the world interested in giving these orphans a home: South-East Asia. And, ironically, China and the South-East Asian countries are the main consumers of the tourist trinkets and decorative carving containing newly-poached ivory that created the problem in the first place- but this only makes the point about half-truths in the policy discussion in an even more emphatic way.