The madness at the courthouse, a fitting preview for viewers of an upcoming episode of CNBC’s American Greed about Mr. Salander, is practically a sideshow compared to the legal battles that have ensued in the wake of Mr. Salander’s bankruptcy. The egos, double-dealing and sheer amounts of money trading hands in the completely unregulated art market have made it a case without precedent. “They’re really writing the book with this one,” said one lawyer working an angle of the bankruptcy.
About 2,000 artworks left over from Mr. Salander’s time as a prominent gallerist sit in a warehouse in the Bronx, stored there by the trust managing his gallery’s 2007 bankruptcy. Most of these works, awaiting liquidation, were in the gallery’s possession at the time of the bankruptcy, when the building on 71st Street was famously locked up by a court order on the same day of the Renaissance exhibit that was supposed to have pulled Mr. Salander out of debt. The 2,000 pieces are down from an initial 4,100; the rest were distributed to clients whose ownership was clear.
But ownership can be a tricky subject with Mr. Salander. His modus operandi was to sell works from the estates he managed without telling those owed money from the sale, or to sell works that weren’t consigned or marked for sale, or to sell shares in paintings that added up to more than 100 percent.
Though some of the works in the Bronx are still under dispute, more galling for victims are the paintings that Mr. Salander sold without telling clients, or had no right to sell in the first place. In the best cases, these clients know where “their” paintings hang but have little recourse because the purchasers bought them in good faith. In the worst, they simply have no idea where the paintings are, thanks to Mr. Salander’s creative bookkeeping.
Mr. Salander himself likened his maneuvering to the scam from The Producers, terming it “How many halves make a whole?” according to Mr. Kelly. To further complicate matters, ownership of a work isn’t clear-cut if the piece in question was only on consignment at the time of the bankruptcy. Mr. De Niro had to pay a $14,000 settlement to obtain six paintings that the committee of unsecured creditors had claimed as their own. Michael Luckyx, co-trustee of the estate of Elaine de Kooning, had to show a judge photographs of his aunt’s paintings before he was allowed to load them into a U-Haul and take them back to his home on Long Island.
In 2006, Mr. Salander gave a Parmigianino painting that he was in the process of buying from dealer Stanley Moss to his business partner Donald Schupak. Mr. Moss has sued, but is not optimistic about getting the painting back from
“Artists are going out saying they’ve been defrauded and they weren’t paid, and he’s taking the position that you have to prove it in court,” Mr. Moss said. “He knows damn well–whether he knows it in an absolute way is another matter–that the artist in fact was cheated.”
Whatever the purchasers of art with dubious ownership did know, their defensive stance can be grating for Mr. Salander’s victims on the other end. Earl Davis, son of the painter Stuart Davis, claims that some 96 paintings, for which he is owed at least $15 million, were sold improperly by the gallery. His father died when he was 12, and he had worked with Mr. Salander since 1984. Their email correspondences, on both ends, frequently included the line “I love you.”
A soft-spoken, balding man who fiddles with his fingers when he’s on the witness stand, Mr. Davis said these purchasers have demonstrated for him the “appalling lack of heart in the art world, at least among the people who acquired my father’s works.” He recalled one gallery owner who’d entered a questionable partnership with Mr. Salander on a Stuart Davis work.
“As soon as Salander-O’Reilly folded, he contacted me and said that he’d like to represent the Stuart Davis estate, and if I was so inclined to give him that title, that he’d return that piece to me,” Mr. Davis told The Observer by telephone. “And I said, well, how about returning that piece to me first–which hadn’t cost him much in the first place–and then we can talk about it. And then I never heard back from him.”
One of the more indignant Salander purchasers spoke to The Observer on the condition that his name not appear in the article. We will refer to him as Mr. IP. A belligerent disputant, he is the kind of person who bristles at the very word “ownership.” He has been sued by Mr. Davis, the George Morris and Suzy Frelinghuysen Foundation, the tennis player John McEnroe, two other individual collectors and a trust-related committee representing Salander creditors at large.
Mr. IP is a collector, and the creditors’ committee holds that he was essentially a fence, doling out cash in exchange for paintings at fire-sale prices when Mr. Salander needed money. One Salander victim told The Observer that the district attorney’s office believes this to be his role as well. Starting in 2006, a period during which, according to the bookkeeper Ms. Cohen, the gallery was overdrafting daily, Mr. IP received some 75 works and cash from Mr. Salander, worth at least $9.8 million altogether, in exchange for cash and some six works from Mr. IP, with that cash and art totaling just $3.6 million, the creditors’ committee suit alleges.
Mr. IP said his business with Mr. Salander is unimpeachable, that Mr. Salander, as far as he knew, had the right to do whatever he wanted with the works he “traded” to Mr. IP. He said the six works given to Mr. Salander were undervalued by the creditors’ committee, which accounts for the discrepancy in value.
“Why should he give me this grace, this mitzvah, this gift, why should he give me this art at literally 30 percent of the fair market value?” Mr. IP said. “Why wouldn’t he go down the street to some other gallery and get 40 or 50 percent? Why didn’t he get 80 percent from Sotheby’s?”
Mr. IP also took issue with “the public personage” of Mr. Davis as “a poor little boy that someone’s taking advantage of.”
Some who have been in contact with Mr. Salander since his incarceration said that he believes himself to have been the victim of associating with the wrong kinds of people in his business decisions, the kind of people who become angry and sue.
Writing in New York in 2008, the art critic James Panero argued that Mr. Salander’s gallery failed because his taste was simply too good for the market, but that hardly explains why he engaged in these shenanigans for so many years. Few asked about Mr. Salander will claim to have had a personal relationship with him, but Mr. Moss, who has known him for 20 years, contrasted Mr. Salander’s interior life with that of Bernie Madoff. Mr. Madoff, he reasoned, always knew that the pyramid would come crashing down some day, whereas Mr. Salander never stopped believing in the massive sale that would erase all his debts. Mr. Moss also attributed his scheming to mental illness.
“I think he thought he would pull it off, as part of his sickness. And it’s very, very hard to figure out why,” Mr. Moss said. “I mean, what lessons do you teach your kids, separate from anything else, if you have a kid who’s 11 or 12 and there’s a birthday party in California and you rent a jet plane to take him to a birthday party. What lesson are you teaching your kid?”
With additional reporting by Caitlin Nolan and Sharon Samuel.