News & Updates

It’s easy to say- maybe even fashionable to say- that criminals use companies in the United States to carry out illegal activities. The terms “illegal” and “illicit” show up 118 times in a rule issued yesterday by the Treasury Department concerning a new mandate for companies to report the names, ranks, and serial numbers of their owners. The new rule, entitled “Beneficial Ownership Information Reporting Requirements,” becomes the law of the...

Introduction Consignor’s counsel should review and revise the Consignment Agreement with the worst-case scenario in mind, bearing in mind that the auctioneer’s draft is designed to protect the auction house, not the consignor, if a dispute arises over title, authenticity, condition, casualty, termination, withdrawal or otherwise. Keep in mind that prior experience is not always predictive because of the artwork’s uniqueness and changing market...

U.S. Courts Raise the Bar for American Art Dealers and Collectors With the proliferation of national cultural patrimony laws, several foreign nations have made many claims to fine art and antiquities in the United States alleged to have originated from their territories. These claims are often coupled with a demand that the object be removed from an auction or exhibition and returned to the country of origin. They are intended to kill the sale...

We are pleased to say that Pearlstein & McCullough LLP represented MGM and Bellagio Fine Art Gallery in connection with the Picasso Masterwork auction to be held at Bellagio in Las Vegas in October. The Picasso Masterwork Auction is part of a collaboration between MGM and Sotheby’s for the “October Weekend” including a luxury auction and related events. The collaboration is described in MGM’s Press Release.

US Congress Decides to Regulate the Art Market Last week, Congress decided to apply the Bank Secrecy Act to antiquities dealers. The new law, once signed by the President, will require antiquities dealers to adopt anti-money laundering programs to detect illegal practices by consignors and buyers. The bill requires the Treasury Department to write regulations on the specific policies to be implemented by antiquities dealers. Congress supplied...

Pearlstein & McCullough LLP and Irwin, Lewin, Cohn & Lewin PC are pleased to announce that they are collaborating to provide legal services to clients in the Hamptons. Together, the firms offer a wide-range of legal services including art law, real estate, trusts and estates, commercial law and litigation. Pearlstein & McCullough LLP is a boutique firm with offices in midtown Manhattan and Southampton specializing in art law,...

Second Circuit Enables Bad Faith Restitution Claims By: William G. Pearlstein[1] Whenever an auction house, art dealer or collector publishes an antiquity in a catalogue or on a web-site or exhibits the object in an art fair, gallery or museum, it risks attracting the attention of a potential claimant. These can include foreign nations, federal and state enforcement agencies, archeologists, academics, self-appointed restitution vigilantes and...

Hobby Lobby Stores, Inc. filed a lawsuit against Christie’s Inc. in the U.S. District Court for the Eastern District of New York. The dispute concerns the ownership of an ancient Mesopotamian cuneiform tablet bearing part of the Epic of Gilgamesh, c. 1600 BC. Christie’s sold the Tablet to Hobby Lobby in a private sale in 2014. The U.S. Attorney for the Eastern District of New York filed a lawsuit yesterday for civil forfeiture seeking to...

If we reflect upon the last decade in the art market, we can clearly see the “professionalization” of the business of selling art, whether it be more sophisticated contracts and deal structures, increased government regulation, the development of art as a financial asset, or increased attention to the unique features of art as an asset class, including provenience, provenance, authenticity, attribution, and regulatory compliance. We continue to...

As summer is here and the art-world halts briefly in the busy cycle of auctions and art fairs, we’d like to share some thoughts about the developments below. These typify the kind of sophisticated matters that we handle, which include transactions, disputes and regulatory issues affecting broad segments of the art market. PML Wins Another Authenticity Dispute In June 2019, Pearlstein, McCullough & Lederman secured a substantial settlement...

Art Investment Funds. Art funds play an important part in the use of artwork as investment. These are generally funded by private offerings and organized to acquire and dispose of artwork in one more art market segments that will appreciate in a narrow, three-to-seven-year window. We represent art investment funds in several art market segments in connection with their formation, private offerings, corporate governance, acquisitions and...

The Fall season is upon us and it’s been a while since we apprised you of our more interesting cases and activities. Our firm has matured over the past five years into a sophisticated international practice, involved in all sectors of the art market, from Contemporary to Modern to Renaissance to Antiquity. Litigation Aboutaam v. L’Office fédérale de la culture de la Confédération Suisse et al., Case Number: 1:18-cv-08248-RA. We represent Hicham...

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...

By Michael McCullough There is a theory in the art market which has not been fully formulated, but which is largely accepted and is brought forward to criticize any judicial decision involving a work of art. It might be called, until a better name is found, the Theory of Judicial Incompetence in Art Disputes. According to this theory, judges and juries are too thoughtless to understand the complexities of the art market, and the authenticity of...

New money laundering regulations are being considered for art and antiquities dealers The House Financial Services Committee is drafting legislation that would add “dealers of art and antiquities” to the list of regulated financial institutions under the Bank Secrecy Act (BSA). The committee will likely introduce the legislation during the week of May 14th. Once the legislation is passed, the Treasury Department’s Financial Crimes Enforcement...

Today, Pearlstein McCullough & Lederman obtained a favorable resolution with the U.S. Attorney’s Office for the Eastern District of New York on behalf of Hobby Lobby Stores, Inc. concerning the importation of certain Biblical artifacts. The PML team, working with Kramer Levin Naftalis & Frankel, presented a compelling case that led to a civil settlement of Customs violations regarding the 2010 imports. The firms worked together to...

Georges Lederman Joins the Firm. We are pleased to welcome Georges G. Lederman as a partner in our firm. Georges is an experienced white collar criminal defense attorney and civil litigator who has focused on representing art world clients over the past 13 years. He has tried over 30 felony jury trials to verdict and has defended art dealers, galleries and auction houses before federal and state law enforcement agencies investigating the sale...