Larry Gagosian Withdraws Suit Against Billionaire Ronald Perelman

A development has occurred in the legal battle between former friends and art world powerhouses art dealer and gallerist Larry Gagosian and billionaire collector Ronald Perelman. For details, read our earlier report: Perelman and Gagosian Countersue over ‘Popeye.’

Last Friday, October 19, Gagosian withdrew his lawsuit filed last month against Perelman’s MAFG Art Fund LLC over failure to make several payments for several works of art. The suit was dropped “without prejudice and without costs to either party.” However, the story has not concluded, as Perelman is still pursuing his own suit against Gagosian.

The former friends filed suits against each other in New York’s Supreme Court in Manhattan on Wednesday, September 12, each alleging the other cheated him out of millions of dollars.

Perelman’s suit stated that the famed dealer had used his position in the art world to manipulate Perelman into purchasing “Popeye,” a $4 million granite sculpture by the contemporary artist Jeff Koons. Perelman said that Gagosian had failed to disclose “secret contract provisions” between the gallery and Jeff Koons that prevented Perelman from earning a fair return on the piece. Perelman had not realized that contract provisions between Koons and Gagosian stipulated that the artist would receive a large percentage of any profit earned if the gallery resold the work for more than $4 million. This “detrimentally affected Gagosian’s ability and willingness to repurchase or resell ‘Popeye’ above the price paid by plaintiffs.”

Gagosian, who represents heavy-hitters such as Damien Hirst, Andy Warhol, and Richard Serra, charged that Perelman failed to pay $12.6 million for a sculpture and $10.5 million for a painting that were delivered to his East Hampton home. Gagosian stated that Perelman had refused to pay the agreed-upon price, and offered pieces from his collection as partial payment. After refusing to pay, the gallery stated in its complaint that it had agreed to give Perelman about $18 million in credits for the art from his collection to “mitigate damages.” Perelman’s actions had caused the gallery to pay the artists out of its own capital, forgoing its commissions. Gagosian had also stated that following non-payment, Perelman had “engaged in a series of sham settlements and deceptive maneuvers designed to force the gallery into spending tremendous capital to cover shortfalls, to cloud the title of artworks defendants forced the gallery into accepting as barter, and to otherwise render impossible the gallery’s ability to mitigate damages including the continual threats of baseless lawsuits.” These actions “caused the gallery to lose millions of dollars,” Gagosian alleged. He was seeking the original price of the sculpture and the painting, minus the net sales prices of any of the bartered pieces from Perelman’s collection that were sold, and to return the works that haven’t been sold.

However, in a letter to the court, Gagosian’s lawyer, Matthew Dontzin, explained that the purpose of Gagosian’s lawsuit had been to establish that he owned the works in question. Since the Perelman complaint concedes that the gallery does possess title to the artworks at issue, including the unfinished granite “Popeye”, Dontzin stated that there is no reason to continue his suit.

Perelman’s lawyer Keith Fleischman stated that his client’s lawsuit will continue, as Gagosian’s goal was only to “divert the court’s attention from the real issue between the parties, which is the fraud that occurred.”

For further information, check out: Art Info, The New York Times, and The Gallerist