The Knoedler & Company forgery scandal—which brought down the once-esteemed gallery in 2011 and spawned numerous protracted lawsuits—came to an abrupt halt Wednesday when collectors Domenico and Eleanore De Sole announced a settlement with Knoedler and its parent company 8-31 Holdings, Inc., the remaining defendants in the case. The De Soles had settled with Ann Freedman, the gallery’s former director, on Sunday. Luke Nikas, an attorney for Freedman, told Artsy in a statement: “Ann is pleased to be able to reach this settlement. She stands behind the work that she sells. From the very beginning of these cases, Ann never wanted to keep a penny of the commissions she made on these works.”
The case against the gallery and holding company was slated to proceed this week, with Freedman and Michael Hammer, Knoedler’s owner, expected to testify on Tuesday. According to ARTNews
, just before they took the stand in front of a packed courtroom, the judge dismissed the jury for the day “due to unexpected developments.” Although the trial was set to resume the following morning, it never did. Instead, the De Soles settled with Knoedler and 8-31, effectively resolving the $25 million lawsuit over the family’s purchase of a fake Rothko. Charles Schmerler, Knoedler’s attorney, told ARTNews
that Freedman’s earlier settlement had served to “enable a fair, reasonable, and good settlement for the other parties.”
Lawyers would not disclose the terms of either settlement, although artnet News
reported that the gallery settled a similar lawsuit brought by hedge fund manager Pierre LaGrange for just $6.4 million—despite the fact that he originally purchased his fake Pollock from Knoedler for $17 million. Whether that settlement included an additional sum for the co-owner of the forged work, Canadian investor David Mirvish, is unknown.
The high-profile trial had the potential to determine the crucial (and potentially game-changing) point of law at the heart of the case: Is it the responsibility of the gallery or the purchaser to verify a work’s authenticity? Below, we bring you up to speed in this complicated dispute and discuss what the settlement means for the art world going forward.
As we’ve previously reported
, the prestigious Upper East Side gallery Knoedler & Company shuttered in 2011 amid allegations it had sold some $60 million in forged works falsely attributed to major
. The paintings came to the gallery by way of art dealer Glafira Rosales
, who claimed that a secretive Swiss collector had consigned them. Dubbed “Mr. X” by Rosales, the mysterious figure never actually existed. In fact, Rosales commissioned the works from a struggling Chinese artist based in Queens named Pei-Shen Qian (who has since fled to China); she paid him anywhere between a few hundred and a few thousand dollars for each multi-million dollar forgery.