Wednesday, February 10, 2016

NY Times: Knoedler Gallery and Collectors Settle Case Over Fake Rothko


NY Times:

Knoedler Gallery and Collectors Settle Case Over Fake Rothko

 
A lawsuit against Knoedler & Co., a once celebrated New York art gallery that was accused of selling a fake Rothko painting to a pair of collectors for $8.3 million, ended in a settlement on Wednesday, just as the gallery’s former owner and its president were preparing to testify in Federal District Court in Manhattan.
Although the terms of the agreement were not disclosed, it resolved all claims by the collectors, Domenico and Eleanore De Sole, who had requested $25 million in damages, saying the defunct gallery and its former president, Ann Freedman, had participated in a “racketeering scheme” to sell more than 30 forged works said to be by Abstract Expressionist masters like Jackson Pollock and Willem de Kooning

Attorneys announced to the press the settlement in the courtroom.
The judge and the jury did not appear in court today.
The fake Rothko (stored behind the screen during the trial) was removed from the courtroom,
now that the case is over. 
“I think our clients are extremely satisfied by this settlement,” Gregory Clarick, a lawyer for the De Soles, said on Wednesday morning, after emerging from a conference with other lawyers and the judge. “And they are also satisfied to get the truth out and tell their story.”
Charles Schmerler, a lawyer for Knoedler, called the settlement “fair, reasonable and good” and added: “We’re pleased to see that the parties were able to do this on the heels of the settlement with Ms. Freedman.”

Collectors said Ms. Freedman should have also questioned the paintings because, among other reasons, Ms. Rosales was providing them at bargain rates, selling the fake Rothko, for instance, for $950,000. Knoedler sold the Rosales works for far more. An accounting expert appearing on behalf of the De Soles testified that the gallery had sold the forgeries for a total of about $70 million, yielding a net income of $32.7 million for Knoedler and bringing Ms. Freedman more than $10 million in commissions, in addition to her salary.


 Forensic accountant Roger Siefert testifying

Expert, Roger Siefert, testified that removing the income from those sales and omitting income from the eventual sale of Knoedler’s Upper East Side townhouse meant the gallery would have suffered a net loss between 1994, when the sales of the fakes began and 2011, when it closed.
Lawyers for the defense suggested that if the gallery had not been selling the fake Rosales paintings it would have sold other works and made up any deficits.


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