"Phony And Overvalued Russian Art" Impossible but Caveat Emptor
August 8, 2011
In July, a Luxembourg company, Arthur Properties S.A., filed a $6.5 million suit in the U.S. District Court for the Southern District of New York, against A.B.A Gallery, a New York-based art gallery specializing in 19th century, 20th century, and contemporary Russian works of art, alleging that the gallery and its owner, Anatol Bekkerman, inflated prices and sold fakes.
The complaint accused defendants of “creation, concealment, dissemination, transfer, and sale of inauthentic [Russian] paintings, as well as the participating and sharing in the proceeds of such wrongful acts.” The 18 paintings in question were purchased by Arthur Property’s buying agent, Oleksandr Savchuk between 2006 and 2007; they include works attributed to well known artists such as Ivan Shishkin In the Woods (sold for $1 million), Ivan Aivazovsky Seascape with Peter the Great (sold for $4 million), and Aleksander Archipenko Portrait of Wife (purchase price $300,000) and “Nude Blonde” (purchase price $350,000).
According to the complaint, Aivazovsky painting was worth only $800,000 not the purchase price of $4 million. The complaint alleges that people involved in helping Bekkerman included his daughter Sonya Bekkerman, a senior vice president of Russian paintings at Sotheby’s, however, Sotheby’s issued a statement concerning the allegations stating that “”Mentioning Sotheby’s and its employees in this lawsuit appears to be gratuitous and without merit as this lawsuit seems to have nothing to do with Sotheby’s or its employees. Neither Sotheby’s nor its employees have been sued, and there is nothing in the complaint specifying any communications or conduct undertaken by them in relation to the allegations in the lawsuit, nor are we aware of any.”On August 2, 2011, A.B.A. filed a motion to dismiss all claims brought by Arthur Property. During the period in question, the gallery sold paintings to Savchuk for a “total consideration of $9.58 million.”
According to the A.B.A’s own press release, the motion to dismiss focuses on defects in the claims, including plaintiff’s lack of standing to sue, lack of such claim as “overpricing” under U.S. law, and failure to assert the claims in a timely fashion. The motion states “Anatol Bekkerman is one of the leading experts in Russian art, with over 30 years of experience uncovering, recognizing, and evaluating rare and important works in the field. In addition to placing numerous important works of Russian art in major public and private collections throughout Europe and the United States, he has helped major Russian museums to complete their collections by finding and identifying many historically significant pieces of art that were otherwise lost. He has also assisted several Western and Asian museums in promoting, sponsoring and mounting extensive exhibitions of Russian art and artists.” More to the merits of the allegations regarding authenticity, the motion labeled them absurd, “For example, the painting by Ivan Shishkin, In the Woods, was published during the artist’s lifetime in an 1892 catalogue. Following its discovery and purchase by Mr. Bekkerman, the painting has since been identified as a lost masterpiece by leading experts.”
In addition, motion to dismiss stated that, “With respect to the prices Mr. Savchuk paid, A.B.A. Gallery sold the paintings at prices reflecting the market at the time of sale, as the Russian art market was undergoing, and continues to experience, high demand and strong growth. These were transactions between a willing buyer and a willing seller, and Mr. Savchuk was free to accept, reject or negotiate to his satisfaction the price of each painting – which he did – and to consult with any experts of his choosing. At the time of purchase, Mr. Savchuk expressed no concerns with either the quality of the works or with the prices he negotiated.”
While the court readies to review the complaint and the motion, the proliferation of fakes of Russian artworks is forcing Russian museums to appeal to the Russian government for help. For example, the Russian Ministry of Culture is publishing a series of journals with images of fake artworks. In 2010, Aurora Fine Art Fund claimed that a Boris Kustodiev’s painting sold by Christie’s in 2005 for a record-setting £1.69 million was not by Kustodiev. More recently, in the Summer 2011 issue of ARTnews, Sylvia Hochfield and Konstantin Akinsha wrote about threats to legacy of another famous painter Natalia Goncharova. Whether the demand for Russian art is exceeding the supply and thus inspiring forgers or whether volatility of the financial sector is inspiring some art collectors to rescind purchase contracts by way of finding fault with the works acquired during the better economic times is unclear. The desire to unwind sales can be diagnosed as “Buyer’s Remorse.” Perhaps the best free advice is “Buyer Beware.”