Arm’s length transaction? Seller beware?

September 23, 2010

“Art sellers have filed a flurry of lawsuits over the past few years after selling pieces for relatively modest amounts, only to see the buyers quickly sell them again for much more.

“In 2008, the estate of a Canadian woman, Lorette Jolles Shefner, filed a lawsuit in U.S. district court in New York against Maurice Tuchman and Esti Dunow, two experts on the French painter Chaim Soutine, and the National Gallery of Art in Washington. The estate claimed the experts had misled Ms. Shefner into selling them a 1923 Soutine painting, titled “Piece of Beef,” for $1 million in 2004, and then resold it to the museum a few months later for $2 million. As part of a settlement, the National Gallery sold the painting back to the now-deceased woman’s estate, and the two experts paid the estate $210,000 without admitting wrongdoing.

“Last year, the auction house Phillips de Pury canceled a sale of a group of prints by the photographer Diane Arbus, which were expected to bring several hundred thousand dollars, after a lawsuit was filed against a Philadelphia art dealer in federal court in Brooklyn, N.Y., by a memorabilia collector who claimed he had been led to sell the photographs for $3,500 in 2003 to the dealer. The suit was settled out of court without an admission of wrongdoing.”

Read the full story here: http://online.wsj.com/article/SB10001424052748703292704575393113592622480.html?mod=WSJ_hpp_MIDDLENexttoWhatsNewsFifth