Antoher Warhol Foundation Suit

The Courthouse News Service is reporting on another lawsuit filed against the Warhol foundation for conflict of interest and  creating artificial scarcity. This is not the first suit against the foundation and the Warhol art authentication board.  Most of the suits claim the same thing, a conflict of interest between the foundation and the authentication board and the desire to control the Warhol market by limiting the number of authenticated art by Warhol.  It will be interesting to see how this and some of the other lawsuits turn out.

The current suit is brought by Susan Shaer who claims her Warhol painting is worth millions. The painting was reviewed in 1990 and the authentication board claimed it did not have enough information to pass judgment, and 14 years later asked Shaer to resubmit. Shaer claims this is only a ruse so that she will sign a release as she believes the authentication board will decline and then deface the artwork.

The Courthouse News Service states

Shaer claims a conflict of interest exists because the foundation employs authentication board members and owns $500 million worth of Warhol artwork.

By falsely declaring certain works as inauthentic, the board can "systematically exclude Warhol from the marketplace," Shaer says in her 43-page complaint.

Shaer says that without the board's intervention, independent sales would compete with the foundation's holdings in auctions and private sales.

Shaer says board members feel "free to abuse the authentication process in pursuit of their naked self interest."

The board's stamp of approval is necessary for anyone in the world to sell a Warhol work, which allows it to wield "disproportionate power over the Warhol market," according to the complaint.

Shaer says the board forces those who own Warhols to sign non-negotiable agreements that contain a "sweeping indemnity clause" before they submit the works for authentication.

The agreements allegedly give the board complete discretion to reverse its opinion at any time for no apparent reason - even after it has defaced a painting with "the board's equivalent of a scarlet letter."

Shaer says the board never explains the reasoning behind its denials, which shields its "determinations from scrutiny and liability."

Board employees are paid large salaries for their complicity in the scheme or turn a blind eye because of their prestigious positions on the high-profile board, according to the complaint.

Shaer claims that sales of Warhol artwork have dominated the multibillion-dollar market for modern and contemporary art.

The average price of a Warhol work at auction was $442,000 in 2006, according to the complaint.

To read the full CNS article, click HERE.