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Artists and Heirs Claim Hundreds of Works from Salander-O’Reilly

Attorneys and experts handling the Salander-O'Reilly Galleries bankruptcy proceedings have presented the U.S. Bankruptcy Court, Southern District, with a list of approximately 560 artworks that are the subjects of claims, most by the artists or their respective heirs.

NEW YORK—Attorneys and experts handling the Salander-O’Reilly Galleries bankruptcy proceedings have presented the U.S. Bankruptcy Court, Southern District, with a list of approximately 560 artworks that are the subjects of claims, most by the artists or their respective heirs. In a filing made on Nov. 21, attorneys for dealer Lawrence Salander, as well as attorneys for the committee of unsecured creditors, recommended that the listed works be returned to their respective claimants.

One of the largest claims on the list, for 145 works, was made on behalf of the Elaine de Kooning estate by Michael Luyckx, trustee of the estate. The list also includes works by such lesser-known artists as Maro Gorky (daughter of Arshile Gorky), John Griefen and Horacio Torres, among others.

The motion, which is scheduled to be heard by the court on Dec. 11, comes after several months during which experts sorted through claims on thousands of objects that were inventoried at the now-shuttered Salander-O’Reilly Galleries on Manhattan’s Upper East Side, as well as in the Manhattan townhouse and Millbrook, N.Y., home of the gallery owner and his wife, Julie Salander.

Claimants were instructed to follow a protocol that required them to provide detailed information about the work or works, the factual basis for their claim and any documentation—such as consignment agreements, contracts or letters—that would support the assertion of an interest. The protocol gave priority to claims by living artists and their heirs.

In addition to the works listed in the filing, there are thousands of others remaining in the inventory either whose ownership is in dispute or which are indisputably owned by the bankruptcy estate. The latter works will eventually be sold, once experts determine the best method of sale.

Salander himself also faces legal actions by several plaintiffs who assert that the debts he owes them should not be dismissed by the bankruptcy court because they were incurred as a result of fraud. These include a complaint by Carol Cohen, the widow of former Madison Square Garden CEO Alan Cohen, which alleges that Salander defrauded her of at least $3.4million.

According to Cohen’s claim, in 2007 she agreed to have Salander store several of her artworks, including pieces by Jean Dubuffet, Robert Henri and Fernand Léger, at the gallery. Cohen claims that unbeknownst to her and despite her rejection of a consignment agreement proposed by the dealer, Salander sold the works and kept the proceeds.

Cohen’s attorney declined to comment, citing the pending legal claims. According to Salander’s response, the works were “released” to various galleries and collectors. John Moscow, a spokesperson for Baker & Hostetler, which is representing Salander in this matter, told ARTnewsletter, “We have attempted to help Cohen recover the paintings or the money due for the paintings. We do not agree with her claim that she did not want the paintings sold. That litigation is proceeding.”

According to a claim made by Milan-based gallery Nella Longari, in 2005 Salander accepted several works pursuant to a contract, eventually selling them without informing Nella Longari or passing on any of the proceeds to the gallery. Attorney Francesco DiPietro of New York–based law firm Wuersch & Gering, which is representing Nella Longari, said that, further complicating matters, in some instances “Salander appeared to have sold pieces to more than one person even when the gallery itself didn’t own them.” Nella Longari’s filing requests that the bankruptcy court uphold the debt of €775,000 ($1.1million) it claims it is owed.

A similar claim, filed last summer by art collectors Monty and Sarah Diamond, asks that a debt of $835,500 also be found nondischargeable by the bankruptcy court. Around March 2006, according to the complaint, the plaintiffs consigned 12 artworks to Salander—five by Milton Avery, ranging in value from $3,000 to $200,000, and seven by Henri de Toulouse-Lautrec, ranging in value from $12,500 to $100,000. According to the complaint, Salander by his own admission sold most of the works at prices below their estimated values and traded several others “as part of a larger exchange.” According to the filing, Salander “has never provided any compensation or remuneration” to the Diamonds for the works.

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