Suits: Contemporary Art World Legend Brokered Backroom Deals

Girl in mirror roy lichtenstein london sotheby's

Photo: Bethany Clarke/Getty Images

It’s something of a battle royale that is occurring in the art world right now.Art dealer and gallery owner Larry Gagosian is accused in two lawsuits of fraud, unjust enrichment, and breach of fiduciary duty, Bloomberg reported.

We wrote last week about the suit filed by Gagosian’s longtime friend Ron Perelman over a $4 million granite statue of Popeye by Jeff Koons, but it appears that Gagosian, who has 11 galleries worldwide, is also under fire from another art collector, Jan Cowles.

Cowles filed her suit in January against “the most powerful dealer in the contemporary art world,” as Perelman described him, over one edition of a 1964 Roy Lichtenstein painting, “Girl in Mirror.”

The Lichtenstein

The accusations of backroom dealing in the art world stem from October 2008, when Charles Cowles, Cowles’s son and an art dealer himself, consigned the Lichtenstein over to Gagosian. The contract stated that Cowles would receive “not less than $2,500,000 net, if the piece is sold,” according to the suit.

Jan Cowles, however, claims she never gave her son permission to sell the painting.

In January 2009, Deborah McLeod, senior director of Gagosian in Los Angeles, offered the Lichtenstein to Thompson Dean, an executive at a New York-based private equity firm, for $3.5 million, the suit said.

The price fell, however, when in June 2009, Charles Cowles announced he was closing his gallery on Manhattan’s West 24th Street. McLeod e-mailed Dean, according to the lawsuit, writing, “seller now in terrible straits and needs cash. Are you interested in making a cruel and offensive offer? Come on, want to try?”

Dean responded with a $2 million offer to which McLeod answered, “that’s approximately half price, so I like it!” according to transcripts of her deposition, Bloomberg reported.

In her deposition, McLeod explained that the market was weak in 2009, warranting a number that is “about half price,” Bloomberg reported.

Representing both sides

McLeod along with John Good, a former Gagosian director in New York, said it was appropriate for their gallery to represent the interests of both seller and buyer, Bloomberg reported.

McLeod said she found nothing wrong with acting as an agent for both parties without disclosure to either side, according to Bloomberg.

Good, who is now senior vice president of private sales at Christie’s auction house, claimed it to be common practice for dealers to represent both parties in a transaction.

“That’s what dealers do,” he said, according to Bloomberg.

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