A Case of Good Taste

Wine auctions offer great opportunities…if you know what to look for.

OUR BUBBLY LAW-SCHOOL classmate Rose had done very well working at Booz Allen. Now, instead of poring over cases, she wanted to buy and sell cases of wine at auction. As big fans of the wine auction world—with many clients in this area—we were happy to help. Continue reading “A Case of Good Taste”

Apples and Picassos

“Like-kind” art trades may bring tax benefits, but only if carefully executed.

OUR NEW CLIENT Joe was a Wall Street trader and avid collector
of works on paper. Although not all his trades panned out”
(Iceland didn’t want any submarines because it has no navy),
Joe’s tax bill was still high. When he came to us, he reckoned he
had found the perfect solution: “like-kind exchanges” of his
art under Section 1031 of the Internal Revenue Code, which
he thought would permit him to defer taxes indefinitely while
allowing him to trade his works for other assets. Although
we see many proposed like-kind exchange transactions, those
that are done correctly in the art world are about as rare as
Icelandic admirals—and so it was with trader Joe’s.

His first brainstorm was to swap some Warhol lithographs
he had inherited for a two-bedroom condo in New York’s
Tribeca neighborhood. The art and real estate were both
worth about $2 million, so he presumed the exchange would
have no tax consequences.

Continue reading “Apples and Picassos”

In Lien Times

Art can be valuable collateral, but pitfalls await lenders and collectors alike.

SINCE ART AND MONEY go together like peanut butter and jelly, it’s little wonder that many banks (including a number of our firm’s institutional clients) have shown an increasing appetite for making loans secured by art.  So Anton’s call to us came as not surprise. Continue reading “In Lien Times”

Repatriation’s New Frontier

Interest in the retrieval of ill-gotten treasures is growing in Korea.

AS OUR READERS KNOW, discussions of legal cases in the United States involving the return of looted European art are almost as common as bad puns in our columns.  But while savvy collectors pass on purchasing pieces of the Parthenon, they may not realize the considerable risks involved in acquiring Asian works stolen from countries such as Korea. Continue reading “Repatriation’s New Frontier”

An Ounce of Protection

Art title insurance can help hedge against an uncertain past.

As one of our smarter clients once observed, the problem with the future is that it’s hard to predict.  This is particularly true in the art world, where uncertainty regarding ownership of works of art can be extremely damaging, and where a title dispute can result in huge legal expenses.  On the bright side, this is one reason we have such nice offices on Park Avenue. Continue reading “An Ounce of Protection”

Original Twin

Art owners’ control over reproductions stops where copyright ends.

IN OUR EXPERIENCE, museum directors are an unflappable lot, but Eve was going bananas in our conference room. She had stumbled on a Web site selling posters with an image of a painting taken from her museum’s homepage-a still life of a bowl of fruit by a 17th-century Dutch master-and her trustees wanted us to sue the site for copyright infringement. Immediately! Continue reading “Original Twin”

Invested Interests

AS ATTORNEYS for a range of art-collecting clients, from those who merely dabble in the market to those who have made a Gagosian amount of money buying and selling art, we find that we give the same ironclad advice over and over: Your art investment is potentially worthless if you fail to protect it legally. Moreover, without the proper protocols in place, you stand to lose more than your purchase price in the event of a legal challenge. Many pitfalls, from issues of authenticity to ownership disputes, can be avoided with proper legal procedures. In the hope that you end up like Larry G-and not as a cautionary tale in one of our future columns-we have answered a few of the most common investment-related legal questions from our e-mail inbox.

Continue reading “Invested Interests”

Destructive Impulse

An artist may tear down aesthetic assumptions, but not another artist’s work.

One of the nice things about our art-law specialty is that we routinely field oddball legal questions from clients (Still planning to bequeath the Schnabel to your schnauzer, Mrs. R?). Occasionally, though, we meet someone truly peculiar, like Robin, a young sculptor with an ominous fixation. Continue reading “Destructive Impulse”