Perelman’s Art Damage Case Continued to Burn Through Court Last Week

June 23, 2025

By Renée Vara

June 18, 2025 marked yet another trial day in the closely watched case of Ronald Perelman versus a group of reinsurers (AGP Holdings v. Insurers).¹ After attending court during the trial’s first week, it became even more apparent that the case offers allied professionals a rare inside look into the world of high-stakes art insurance claims settlement: a world where experts, insurers, and mega collectors debate over rare art objects that few could ever imagine possessing.²

The bench trial centers on AGP Holdings’ $410 million insurance claim, stemming from a 2018 fire at Ronald Perelman’s East Hampton estate. Although the fire never physically touched the works, AGP argues that smoke, heat, and fluctuating humidity caused micro-damage to five paintings by iconic artists. The works and respective claimed values are Andy Warhol’s “Campbell’s Soup Can” ($100M) and “Elvis 21 Times” ($75M); Cy Twombly’s “Untitled” (1971) ($125M); and Ed Ruscha’s “Box Smashed Flat” ($50M) and “Standard Station” ($60M).³ Justice Joel M. Cohen is presiding over the trial that is expected to last about three weeks. With no jury, the battle of the experts could become the linchpin of the case.

On June 9th, the courtroom heard from fire dynamics expert Dr. Daniel Gottuk for the plaintiff, who argued that the paintings were subject to a “chimney effect,” whereby hot and humid air had entered the artwork’s framing systems. “Eventually,” he said, “you’re getting closer and closer to what the humidity is on the outside.” His testimony suggested the fire exposure made the works vulnerable, setting the stage for experts like Jennifer Mass, PhD, whose forensic analysis will likely prove crucial to the verdict.

Typical of the loss and damage valuation disputes regularly encountered in my practice (and my early career at Chubb Insurance), this particular case is likely to become a public playbook on how the mythologized art and insurance industries reconcile a dispute involving a $410M claim for just five artworks. Perelman’s case is exceptional not only for its unique publicity, which most collectors eschew, but also for its peek into the rarified world of multimillion-dollar art insurance claims.

Based on my experience, the ongoing trial raises several strategic concerns and questions, notably:

• What Constitutes Damage According to the Insurance Policy? Whilst the press has presented Perelman’s comments as wry and juicy quips of entitlement, there is a question as to their legal standing in consideration of his specific policy coverages and language. The standard dispute process and policy do not center on a collector’s personal preferences, which is thus unlikely to hold legal merit.4 Instead, professionals such as dealers, appraisers, or auction specialists, informed by the technical analyses of expert conservators, determine value and the degree of damage. Given the focus on Perelman’s personal opinion, it’s worth considering if a unique policy clause permitted him to be the ultimate arbiter of value or damage, as mega collectors often have non-standard policies. Generally referred to as “non-admitted” insurance, these customized policies offer specialized coverages to address the complex risks associated with mega-collections and operate outside the standard regulatory framework. It is also curious that, at this point in the trial, there does not appear to be a valuation expert involved to testify on his claimed value. As we have witnessed in our practice, even top dealers with deep expertise on their own artists’ inventory have been required to use a “disinterested” valuation expert to ensure an “arms-length” assessment of their claim.

• A Question of the Art’s Marketability: The extent to which the incident impacts a work’s marketability is the most essential question within an insurance settlement. Conservators’ technical expertise often is the bedrock of this assessment, along with other factors of market valuation, including artistic quality, rarity, provenance, and reputation. Underwriters’ liability in personal property cases is typically not based on statutory damages, but rather on assigning the art’s diminution of value after the incident. It is notable that to date, no valuation expert has been designated as a witness, nor has there been any indication of the submission of expert reports. Consequently, the critical determination of whose assessment and market authority will determine the marketability of the art after the loss incident remains an open question. Whilst judges adjudicate expert opinions, they do not typically position themselves as the ultimate arbiters of aesthetic value or taste.

• Total Loss or Partial Loss? Many works often endure exposure to damage over time, yet still retain value. Insurance claims due to damage typically involve “partial loss” rather than destruction, and the coverage kicks in for diminution of value rather than a 100% payout. After an expert conservator assesses damage and treatment, an expert appraiser typically determines the impact of that treatment and the new condition status on the work’s value.⁵ A total loss is rare and seems both illogical and unsuitable to the character of the alleged damage. The reality of the art market, especially with secondary market material, is that comparable works often exist with evidence of damage, conservation, and diminished condition. Condition assessments at the time of a sale purposely ascribe a condition scale to discriminate a work’s condition from “excellent” to “poor,” and assess the diverse range of influencing factors that encompass accidental damage, amongst others. Fundamentally, this case is consistent with other loss and damage claims, wherein an adjudicator is required to determine to what extent and at what valuation threshold the market would, hypothetically, be able to find a willing buyer for the work given its post-loss condition status. The Salvator Mundi illustrates how condition status is specific to the art object, the artist’s oeuvre, and the current market. The painting was subject to extensive conservation and consequent authenticity debates, yet its unmatched rarity in the marketplace generated a historic auction sale.⁶ The calculation of loss in value due to partial loss based on a change in condition status is particularly relevant for historic or blue-chip works, as the marketplace is often cluttered with other comparable works which are also not in pristine or “original condition.”

• Notable Absence of Art Market Valuation Experts: Despite the scale of the claim, to the extent of our understanding, no art market authority or appraiser has yet been cited or scheduled to testify on the diminution of value of the art due to the loss. Whilst the question of whether there is damage remains to be settled, one would expect a market authority to be called on to opine on how that damage (or lack of damage) would impact each work’s value. This appears to be a surprising lacuna at this point, but one can only speculate regarding the current legal strategy.

• Authoritative Opinions on Integrity: Surprisingly absent at this stage of the case are the essential opinions from the iconic artist’s studios and foundations, in particular the powerful Warhol and Twombly estates, which significantly influence market reception. These are the authoritative legal bodies that provide official guidance on the integrity of their art, a fundamental factor in valuation. Whilst it remains to be revealed if these organizations have been consulted, the viewpoint or imprimatur of the artist’s authoritative body, whether official or unofficial, is of primary importance to the question of value and integrity. Some significant artists’ estates, foundations, or studios either formally or informally require consultation before conservation treatment or public sale. Their authoritative opinions are typically solicited by the top auction houses to verify integrity and perform transactional due diligence. In following market protocols, the artist’s official opinion on integrity and conservation treatment concerns is considered by insurance companies on behalf of the insured, especially if essential to market reception. Appraisers’ best practices will typically factor authoritative opinions on integrity into a work’s marketability calculations, especially after a loss. We often factor definitive opinions from these organizations as a means to preserve a work’s legacy within the marketplace. Since artist studios and foundations operate with diverse standards and protocols after suffering damage, this necessitates a highly individualized and tailored approach to facilitate their imprimatur.

• Publicity May Impact Market Appeal: The uncommon, high-profile nature of this dispute is notable. Typically, clients avoid publicizing art damage, as it can negatively impact a work’s mythology within the marketplace. Disclosing liability, even perceived, is avoided to preserve marketability and legacy. Sophisticated collectors prefer that such disputes be confidential, and we are often asked to work with strict NDAs, as the impulse to protect the market reputation of a work is inextricably entwined with the work’s intangible qualities of allure, aura, and enchantment.

• Verdict by Judge, Not Jury: Based on my experience, the structure of a bench trial by a judge favors detailed expert testimony. Judges are rational and expect comprehensive expertise, which necessitates a cohesive narrative that should not only directly address questions around condition but also market acceptance and valuation approaches. Generally, jury trials for fine art prove excruciatingly difficult, not only due to esoteric technicalities, but often due to the art world’s estrangement from ordinary life.

• An Expert’s Opinion Is But One Factor: The tricky thing about art claims is that expert testimony can be completely accurate, but it remains just one factor, or actor, in the dispute. Much of the press focus has been on which expert is right, as if the case will depend solely on their testimony. The reality of art litigation is that expert testimony and a strong legal case are not mutually exclusive. Even a sound legal claim can be undermined by factors such as the plaintiff’s testimony, the strength of supporting expert witnesses, and the presiding judge’s understanding of the facts and relevant legal history.

• Extremism Isn’t Always Advantageous: Judges are educated, trained, and oriented to be fair-minded and reasoned. In my experience, all-or-nothing claims often appear irrational and extreme to courts. Considering that the extant artworks exhibit no visible damage, despite potential micro-damage and accelerated degradation, the readily apparent aesthetics may be evidence of a partial, rather than a total loss in value ($410 million).

•  Is the Magic Gone? A collector once declared to me that, despite a damaged work being expertly restored by a renowned conservator, in his eyes it had “lost its magic.” Such misperceptions are commonly based on assumptions regarding a work’s original condition, the effects of aging and handling over time, or the psychological effects of accidental damage on a collector’s perception. This is especially troublesome for historic pieces, which often exhibit condition changes consistent with comparable works of similar age. But insurance policies typically don’t allow owners to “surrender” their art after a loss unless that perception is validated within the marketplace by disinterested experts and based on material damage. Whilst a collector may prefer a settlement for a total loss claim based on their work’s “lost magic,” specific policy language typically protects insurers from such subjective claims without independent market verification.

The Perelman case illustrates the intricate nature of art litigation concerning damaged artwork, underscoring the significance of scientific and valuation expertise. However, this case is not just about materials and media; it’s also about establishing a legal precedent for how value, condition, and artistic authority are unraveled in a landmark verdict. Ultimately, what’s at stake here isn’t just a payout—it’s how the courts will define how “loss in value” is determined at the intersection of the law, the lab, and the ledger.

About the Author:

Renée Vara, is the Founder of VARA ART, Director, Certified Appraiser, Art Expert & Legal Consultant.

NOTE: Under title “Perelman’s Art Damage Case Continues to Burn Through Court This Week” this opinion first appeared on June 19, 2025 at Vara Art Linkedin. Center for Art Law kindly thanks Renée Vara for the permission to reproduce it here. Special acknowledgement and thanks to Nerissa Khan and Valentina Scarzella of Vara Art for their support of this publication.

Sources and References:

¹ The case is AGP Holdings Two LLC, et al. v. Certain Underwriters at Lloyd’s of London, et al. The underwriters involved include three limited liability companies (AGP Holdings) versus affiliates of Lloyd’s of London Ltd., Chubb Ltd., and American International Group Inc..

² If you’re interested in attending in person, you can find the schedule and receive notifications at https://iapps.courts.state.ny.us/webcivil/FCASMain.

³ Values as claimed in court filings. Also, see Claims Journal, “Perelman’s $410M Art Damage Claim Heads to Trial,” June 2025.

⁴ The policies in question generally include dispute resolution clauses that mandate a process akin to arbitration, the outcomes of which are typically not subject to judicial review, as an insurance expert, Judith Wallace, accurately addressed in a recent article in The Insurance Journal. She stated: “It’s reviewable only by a very demanding standard, requiring fraud in the proceeding itself…They’re very difficult to overturn.” The Insurance Journal: https://www.insurancejournal.com/news/national/2025/06/03/826029.htm?utm_

⁵ For more on Appraiser’s methodology and approach to value in loss and damage claims, see Appraising Art: The Definitive Guide to Valuing the Fine Art, Decorative Arts & Collectibles. Vol. II, Appraisers Association of America, 2024.

⁶ The Washington Post: https://www.washingtonpost.com/news/arts-and-entertainment/wp/2017/11/16/a-leonardo-sells-for-450-million-but-what-did-the-buyer-actually-get/

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