Oct. 19 (Bloomberg) -- A New York State judge ordered the Manhattan gallery of art dealer Lawrence Salander closed indefinitely, and a lawyer representing the dealer -- who is facing lawsuits seeking tens of millions of dollars -- said a bankruptcy filing is likely.

At the 90-minute hearing, State Supreme Court Judge Richard Lowe asked whether any of the 50 people assembled had a claim on any of the 650 Renaissance artworks that, on Monday, he had ordered transferred from the Salander-O'Reilly Galleries. Salander-O'Reilly, investor Roy Lennox and investment vehicle Renaissance Art Investors had reached a tentative agreement on Monday about the art.

Eight men and two women in the courtroom stood up and said they had claims on the art.

J. Christopher Shore, a lawyer with the firm White & Case, said his client, Merrill Lynch & Co.'s First Republic Bank, had a lien on all of Salander-O'Reilly's assets. The lawyer said First Republic had made $40 million in loans to the gallery and to Renaissance Art Investors that were in default. When questioned about the loans, Donald Schupak, who had filed suit on behalf of Renaissance, declined to comment.

Other lawyers, representing art collectors, said their clients owned some of the pieces or had won judgments against Salander-O'Reilly forbidding the gallery from relinquishing any art.

``It's a circus,'' Schupak, chairman of New York-based Triumph Apparel Corp., said in an interview. ``It's going to play out in the courts.''

Another Lawsuit

Salander wasn't present at the hearing. His lawyer, David Mollon of Winston & Strawn, said Salander wasn't required to attend but would be at a deposition for another suit in the afternoon.

Salander-O'Reilly Galleries has been closed for a week, padlocked under two previous orders by Lowe to prevent anyone from removing art. The doors opened briefly on Tuesday as Salander prepared what would have been his last exhibit, to commence that night. Instead, his London-based partner, dealer Clovis Whitfield, had the 41 artworks he contributed to the show loaded into a 26-foot truck. Salander canceled the opening.

Salander is accused in lawsuits of reneging on debts, pocketing proceeds of paintings he sold on consignment and operating a ``Ponzi scheme'' or ``shell game.'' He denied the allegations in an interview last month but wouldn't discuss specifics.

Barry Slotnick, one of Schupak's lawyers, asked the judge to forbid Salander from selling art anywhere in the world. Slotnick said in court today that he was told Salander was arranging the sale of artworks in Italy this weekend.

At the urging of Slotnick, the judge also agreed to order the locks at the gallery changed. The judge also requested an affidavit from a conservation expert that the art will be safe in the gallery.

To contact the writer of this story: Philip Boroff in New York at pboroff@bloomberg.net.

Last Updated: October 19, 2007 19:02 EDT