Sotheby’s De Sole Settles $25 Million Suit Over Fake Rothkoby
Knoedler gallery sold dozens of forged paintings to clients
Sales resulted in $32.8 million in profit for the gallery
Sotheby’s Chairman Domenico De Sole and his wife settled their lawsuit against Knoedler & Co. gallery in New York, ending a four-year legal battle over a fake Mark Rothko painting.
Lawyers for both sides announced the accord Wednesday in Manhattan federal court in the middle of trial, following a Feb. 7 settlement with art dealer Ann Freedman, former president of the gallery. Terms of the latest agreement weren’t disclosed.
The De Soles in 2004 paid $8.3 million for the painting, later revealed as a fake. They sued Freedman, Knoedler & Co. and 8-31 Holdings Inc., which owned the gallery. The $25 million the plaintiffs were seeking in damages represents the painting’s theoretical value today had it been authentic, their attorneys said during the trial.
The outcome was “a reasonable and good settlement” for the parties, Charles Schmerler, an attorney representing the gallery and 8-31, said Wednesday.
The De Soles’ lawsuit, filed in 2012, was one of 10 claims against Freedman and the gallery, of which six have been settled. Knoedler and 8-31 will continue fighting the other four claims, Schmerler said.
The trial, which began on Jan. 25, was the first public airing of one of the biggest art frauds in recent history.
From about 1994 to 2008, Knoedler allegedly sold dozens of forged paintings attributed to such postwar artists as Rothko, Jackson Pollock and Willem de Kooning to collectors including hedge fund manager Pierre Lagrange; Jack Levy, a former global co-chairman of mergers and acquisitions at Goldman Sachs Group Inc.; and John Howard, chief executive officer of private-equity fund Irving Place Capital.
Having made $32.8 million in profit from the sales, according to testimony by a plaintiffs’ accountant, the gallery shuttered as claims from defrauded clients piled up.
“Our clients are extremely satisfied,” Greg Clarick, an attorney for the De Soles, said after the settlement. The trial gave them an opportunity “to come forward and step-by-step to tell their own story.”
The case is De Sole v. Knoedler Gallery LLC, 12-cv-2313, U.S. District Court, Southern District of New York (Manhattan).