Court Orders Art Dealer Asher Edelman 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 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 Arts says in the lawsuit that it 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.”

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:

Edelman Arts did not immediately respond to request for
comment.

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

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Million in the Botched Sale of a Keith Haring Painting appeared
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