Botticelli Buoys Bilked Buyers
A painting attributed to Sandro Botticelli and valued at $9.5 million may provide some relief to creditors of Salander-O’Reilly Galleries, more than four years after falling victim to New York’s biggest-ever art fraud.
Art collectors of Art Kabinett social network are glad to hear of some restitution in this matter.
Last week, a New York federal court judge ruled that although a consignor still owns “Madonna and Child” (circa 1500), state law may permit the bankrupt gallery to sell it to benefit creditors.
None of the hundreds of creditors has recovered any money since the November 2007 bankruptcy, even though the trustee, Alan Jacobs, is responsible for selling over 4,000 artworks from the Upper East Side gallery and its warehouses.
In 2010, proprietor Lawrence Salander pleaded guilty to stealing more than $100 million from investors and customers, including Robert De Niro and John McEnroe.
In his spending sprees, Salander acquired heaps of Renaissance art, two lavishly appointed homes, jewelry for his now-ex-wife, Julie Dowden, rare books, furniture and private-jet rentals.
The dealer admitted to pocketing proceeds from selling art he didn’t own and peddling half-shares in the same work three or more times. He’s serving 6 to 18 years in state prison.
The Botticelli may offer millions for creditors, after U.S. District Judge Cathy Seibel ruled this week against the owner’s effort to wrest it from bankruptcy-court control. A similar work sold in 2006 for $7.5 million at Christie’s in London.
Some creditors, such as De Niro, were able to retrieve art through a claims process in bankruptcy court. (De Niro’s late father, the artist Robert De Niro Sr., was represented by the gallery.)
The only people who’ve received money from the gallery since the bankruptcy filing are lawyers, auctioneers and others involved with its unwinding.
“Madonna and Child” was consigned to the gallery by a family trust, Kraken Investments, with an asking price of $9.5 million.
The trust operates out of Guernsey Channel Islands, and is run by Karl Fowler, a former Goldman Sachs investment banker. An operating arm, Kraken Opus, produces premium outsized art books on various subjects including sports teams, celebrities, and broader topics including the Muslim hajj. Some of these limited editions can sell for up $1.5 million.
The 14-by-10-inch Boticelli work was to be displayed in an exhibition titled “Masterpieces of Art: Five Centuries of Painting and Sculpture,” which Salander billed ahead of its October 2007 opening as his grandest show to date.
Kraken bought the artwork at Christie’s New York in 1991 for $231,000. At that auction, it was attributed to “workshop of Botticelli.” It was later discovered to be a genuine Botticelli. The catalog said it was once owned by Imelda Marcos.
But as lawsuits piled up from aggrieved customers and partners, a state judge ordered the gallery closed. The Botticelli became entangled in the bankruptcy that began days later.
Kraken sought that ownership of the painting be decided in the Channel Islands, in accordance with its Salander-O’Reilly consignment agreement, which stipulates that disputes be arbitrated there.
However, U.S. Bankruptcy Judge Cecelia Morris in New York denied Kraken’s motion, calling bankruptcy court the proper forum to determine ownership. Kraken appealed Morris’s ruling to the U.S. district court.
In her decision, filed on July 10, Seibel affirmed the bankruptcy-court decision.
“The court well understands why Kraken is perturbed, even outraged, by the idea that Salander-O’Reilly creditors may enjoy the proceeds from the sale of a valuable painting concededly owned by Kraken,” she wrote.
She said New York state law allows for that because the owner failed to make a filing required by New York’s Uniform Commercial Code.
Kraken will likely appeal the judge's decision. The case is Kraken Investments v. Alan M. Jacobs, 11-cv- 06133, U.S. District Court, Southern District of New York (White Plains).
The Little Barrel
Alessandro di Mariano di Vanni Filipepi, better known as Sandro Botticelli or "Il Botticello" "The Little Barrel"; (c.1445-- May 17, 1510) was an Italian painter of the Florentine school during the Early Renaissance (Quattrocento).
Less than a hundred years later, this movement, under the patronage of Lorenzo de' Medici, was characterized by Giorgio Vasari as a "golden age". His posthumous reputation suffered until the late 19th century; since then his work has been seen to represent the linear grace of Early Renaissance painting. Among his best known works are The Birth of Venus and Primavera.