Court Orders Art Dealer Asher Edelman’s Company to Pay $1 Million in the Botched Sale of a Keith Haring Painting

A New York Supreme Court judge says collector and financier
Asher Edelman must foot the bill for a failed multi-million-dollar
art deal involving a $5 million Keith Haring painting.

Edelman initially saw the work at art dealer Lio Malca’s loft in
late 2016 and then arranged a viewing of it with a representative
for “a Middle Eastern royal family” that was supposedly interested
in buying it as part of a set of five works Edelman would be
selling them, according to the court documents.

Malca claims in the lawsuit that Edelman’s company, Edelman
Arts, agreed to purchase the work for $5 million and was sent an
invoice for that amount. But Edelman Arts never paid and instead
told Malca that “the intended buyers of the art—to whom Edelman
Arts had hoped to resell the work—no longer wanted to buy it. In
Malca’s view, the invoice remained outstanding, regardless of what
happened on Edelman’s end; their deal was done,” according to court
papers.

Meanwhile, Edelman says in the lawsuit against his company that
he believed the deal was “definitively off” since it was “merely an
agent for the ultimate buyers and… the transaction was canceled
within a reasonable amount of time.”

“The facts and law on the summary judgement are questionable,”
Edelman says. “It has no net financial impact on the company.”
Edelman also cited a separate lawsuit against the original intended
purchaser of the Haring, the Middle Eastern Royal family, which he
says his company has won in federal court.

In an interesting twist, following the failed art deal, Malca
put the Haring was up for auction at Christie’s in November 2017,
acting on behalf of consignors identified only as SL Fine Art. They
negotiated a $4 million guarantee from Christie’s, according to the
ruling, and the painting sold for a hammer price of $3.5 million,
requiring Christie’s to pay the $4 million for the work.

Five months later, Edelman Arts filed a complaint seeking to
void his unpaid invoice with Malca. Two days later, Malca
countersued Edelman Arts for $1 million—the difference between the
previously agreed-upon price of $5 million and the $4 million he
received from the auction house.

The judge ruled in favor of Malca (granting him summary
judgment, which is intended to prevent the case from going to a
full trial), arguing that he had provided “sufficient evidence… of
contract formation, breach and damages, while Edelman Arts’s
various defenses fail to raise material issues of triable
fact.”

“The decision highlights that art dealers are subject to
liability when they agree to purchase an artwork in their own name
(even if they intend to immediately resell the artwork to a
client), particularly if they use a resale certificate to make the
purchase and paper the resale as a separate
transaction,” Malca’s attorney Paul Cossu told Artnet
News:

The judge ordered Edelman Arts to pay Malca $1 million plus
interest from April 2018, when Edelman first filed his claims.

Update: An earlier version of this story
said that Edelman did not respond to a request for comment when in
fact he did. This post now reflects those comments. 

The post Court Orders Art Dealer Asher Edelman’s Company to
Pay $1 Million in the Botched Sale of a Keith Haring Painting
appeared first on artnet News.