Annals of art world skullduggery, Larry Gagosian edition
Randy Kennedy has a good overview of the litigation going on between Jan Cowles, a prominent art collector, and Larry Gagosian, the world’s most prominent art dealer. He doesn’t provide or link to any of the primary documents, however, which can be found here, and they’re where all the fun is.
In a nutshell, Jan’s no-good son Charles got desperate for cash, and so sold her Lichtenstein through Gagosian without her knowledge or consent. What’s more, his desperation was so obvious to Gagosian that he wound up getting spectacularly ripped off: while Gagosian had initially promised him $2.5 million for the piece, the final payment to Cowles was just $1 million. Meanwhile, another version of the piece, which is an edition of eight, sold at Christie’s in 2010 for $4.9 million.
A lot of attention is focusing on the smoking email from Gagosian director Deborah McLeod, who was based in Gagosian’s Beverly Hills outpost, to the collector who ultimately bought the work, Tom Dean. “Seller now in terrible straits and needs cash,” she wrote. “Are you interested in making a cruel and offensive offer? Come on, want to try?”
Eventually, Dean came back with an offer of $2 million, with generous terms allowing him to avoid paying most of the price for six months. McLeod then talked to Gagosian personally, and told Dean that the deal was on:
Larry says the $2 mm will fly only for immediate payment, so he will buy it. If he succeeds in buying it for 2mm, he will do the 6 month payout for you.
This is quite funny, in hindsight, because of course Larry didn’t buy the piece for $2 million at all. He sold the piece for $2 million; he bought it for just $1 million.
With all of the focus on the emails, however, it’s important not to lose sight of all the revelations in the original complaint, including the extremely serious allegation that Gagosian lied about the condition of the piece in order to justify its very low sale price. The complaint also accuses Gagosian of essentially stealing the work from Jan Cowles:
Although Gagosian knew the Lichtenstein Work belonged to Mrs. Cowles, and not Charles, Gagosian made no effort to contact her, or her attorney-in-fact, Lester Marks, to obtain either any authority to remove the work from the apartment or to offer the work for sale to any third party. Nevertheless, on or about October 10, 2008, Charles purported to consign the Lichtenstein Work to Gagosian. Gagosian took delivery of the work from Mrs. Cowles’s apartment, and listed it as a consignment with the understanding that it would not be sold for less than $3 million, with Charles to receive no less than $2.5 million.
This is all extremely reminiscent of the way in which Anthony Marhsall allegedly sold a Childe Hassam belonging to his mother, Brooke Astor; you’d think that Gagosian would be a bit more cautious about such deals after the Astor case got so much negative publicity.
But what’s absolutely clear here, no matter who wins the legal case, is that the opacity, skullduggery, and information asymmetry in the art world should put off anybody who ever thinks they’re dealing fair and square with a prominent dealer. Charles Cowes was an art dealer in his own right — an art-world insider — and even he ended up getting ripped off by Gagosian.
I’ve heard a few stories, over the years, of what happens when collectors who own art try to sell that art through a gallery. In the first instance, the gallery is always very bullish, and promises to sell it for a high price at a modest commission. But then it somehow never sells, and the consignor becomes increasingly desperate, and eventually accepts a sum of money from the gallery which is a mere fraction of the amount originally mooted. It’s a standard m.o. in the gallery world: never sell anything too quickly, and wait instead for the seller’s need for cash to be as urgent as possible. That minimizes the amount the gallery needs to pay the seller, and therefore maximizes the amount the gallery can keep for itself.
Which is yet another reason why art is not an investment. You might have a good idea what a piece is worth, but you’re unlikely to ever be able to realize that kind of sum. Not unless you don’t need the money — and if you don’t need the money, you won’t want to sell it in the first place.