The pending cases also demonstrate the immense power mega-artists like Koons wield over their market. Essentially Koons had a deal with Gagosian over his yet-to-be-completed $US4 million granite sculpture of Popeye that if it was on-sold at any time in the future he (Koons) would get 70 percent of anything above the original sale price. It’s the artist’s resale fee on steroids. And just in case anyone thought there would be some wriggle room, Koons also insisted on 80 percent of any resale profit should the sculpture come back into Gagosian’s hands before it was completed. That’s a seriously powerful player at work.
Welcome to the world of dealer/artist/collector relations where collectors not only purchase works from art dealers but also consign them back for resale, exchange them for other works and sell back direct. Tons of room for confusion and misunderstanding there. As one US attorney put it, “There’s a certain level of informality in the art market that is not helpful to any of the parties.”
The court papers filed by Ron Perelman (you can get them here) claim that as the already paid for Popeye sculpture was running seven months late, it was decided to add it to some other art works as part payment for yet another, grander acquisition. All the pieces went back and forward with Larry Gagosian receiving the returned Perelman’s works and Perelman getting his new painting.
Then all hell broke loose as Perelman claimed Gagosian “Fraudulantly induced [Perelman] to purchase Popeye a sculpture by Jeff Koons and forced [him] to accept an exchange rate significantly below its fair market value”. Gagosian responded in kind accusing Perelman of engaging in “a series of sham settlements and deceptive maneuvers”.
Put simply, Larry reckoned that Ron hadn’t paid for Popeye so obviously he wasn't going to get the full price back for it but Perelman found out about Jeff's 70 percent so he figured that Larry wasn’t going to offer him very much at all because he wasn’t going to make any profit so Ron decided to sue which really really upset Larry who thought Ron was a friend and anyway he hadn’t ever sued one of his clients before but what the hell you have to make a start somewhere besides so far as Larry was concerned Ron didn’t even own the damn Popeye work because he hadn’t paid for it duh not that Ron was having anything to do with that as an idea because he had copies of his cheques. It’s complicated.
You can read the whole amazing story here in the Huffington Post and in even more juicy detail here via Bloomberg.
Image: Jeff Kons's Granite Popeye (simulation only)
