Details from a Suit Against Knoedler

The NY Times has published an article on a lawsuit which claims the Knoedler Gallery earned nearly $60 million from works provided by a disputed source of paintings   The suit claims the viability and sustainability of Knoedler Gallery was based upon selling these questionable works without proper authentication and provenance.

The NY Times reports

Between 1996 and 2008, the suit asserts, Knoedler earned approximately $60 million from works that Ms. Rosales provided on consignment or sold outright to the gallery and cleared $40 million in profits. In one year, 2002, for example, the complaint says the gallery’s entire profit — $5.6 million — was derived from the sale of Ms. Rosales’s works.

“Knoedler’s viability as a business was substantially — and, in some years, almost entirely — dependent on sales from the Rosales Collection,” the De Soles claimed last month in an amended version of the suit they filed this year.

While the forgery allegations are well known and have been the subject of three federal lawsuits against Knoedler, the recent filings expand the known number of Rosales artworks that were handled by the gallery, which was in business for 165 years, and assert that they played a pivotal role in the gallery’s success. After the F.B.I. issued subpoenas to the gallery in the fall of 2009, Michael Hammer, Knoedler’s owner, halted the sale of any Rosales works. Knoedler ended up losing money that year and in 2010, the court papers say.

Lawyers for the gallery and its former president Ann Freedman declined to discuss the accuracy of the De Soles’ financial analyses. But they suggested the level of profits is irrelevant if the artworks sold were the authentic and valuable works of acknowledged masters; the gallery and Ms. Freedman still insist on their authenticity.

Source: The NY Times