UPDATE: Warhol Foundation Wins $6.6 Million Insurance Payment After Six Years
June 30, 2013
The Andy Warhol Foundation and the Philadelphia Indemnity Insurance Company (PIIC) have reached a settlement favorable to the Foundation. According to the Foundation’s press release, the PIIC will pay back the “lion’s share” owed, estimated to be $6.6 million.
The Foundation bought a Directors and Officers Protection Flexi Plus Insurance Policy (D&O Policy) from the PIIC in 2002 to protect themselves from future litigation. The Foundation filed a claim in 2011 for the reimbursement of legal costs, which stemmed from the “wasteful” and “bogus” authentication cases brought by Joe Simon and Susan Shaer in 2007 [quotes from The Andy Warhol Foundation]. After failed negotiations, the Foundation filed a complaint in New York against the PIIC in 2012.
In The Andy Warhol Foundation for the Visual Arts, Inc v. Philadelphia Indemnity Insurance, the PIIC argued that the D&O Policy did not apply because of a “professional services” stipulation which excluded liability for professional services rendered, such as the professional authentication of Warhol’s work. The Foundation countered that the authentications were provided as charitable and academic work. Judge O. Peter Sherwood agreed with the Foundation, denying the PIIC a dismissal this past December.
The Foundation announced this week that they reached a settlement with the PIIC for approximately $6.6 million. On June 26, the Foundation issued a press release which stated: “The Andy Warhol Foundation for the Visual Arts is pleased to announce that it has concluded a settlement with its insurer, Philadelphia Indemnity Insurance Company, that fully resolves the Foundation’s claims against the insurer for refusing to pay the Foundation’s legal costs incurred in defending itself against an antitrust case brought by Joe Simon and a “copy-cat” suit by Susan Shaer.” The press release describes the battles of the Foundation in great depth– possibly closing the door on their lengthly legal woes.
All of the money will go to the Foundations endowment.
Sources: The Andy Warhol Foundation for the Visual Arts; “Warhol Foundation Settles Case Against Insurance Firm,” The Art Newspaper; “Insurer Must Cover Warhol Foundation’s $4.6M in Legal Fees,” Law360.