A Nonprofit Founded by Jonas Mekas Is Suing Online Auctioneer Paddle8 for Allegedly Failing to Hand Over the Proceeds From a Charity Auction

A cinema non-profit co-founded by the late filmmaker Jonas Mekas
is suing online auctioneer Paddle8, along with several of its
executives, in New York State Supreme Court for allegedly
misappropriating funds from a charity auction that Paddle8 held for
the non-profit, the New American Cinema Group, in November.

The sale included works donated by artists John Ahearn, Kiki
Smith, Tom Otterness, Jonas Mekas, Jim Jarmusch, and Walter
Robinson, among others. According to the complaint, the cinema
organization still had not received the funds from Paddle8 months
after the sale. Meanwhile, collectors had started calling to
inquire about the whereabouts of works they purchased at the
auction. (The New American Cinema Group is believed to be in
possession of the artworks, but lacks the funds to release
them.)

“Paddle8’s pattern of conduct in withholding, and apparently
misappropriating, funds that belong to a non-profit is very
troubling,” Paul Cossu, a pro bono attorney for the cinema
organization, told Artnet News in an email. “As an auction house,
Paddle8 “has a fiduciary obligation to hold and safeguard such
funds in trust for its consignors.”

Cossu said his firm is asking the court to appoint a
receiver to take control of Paddle8’s assets and “ensure that any
funds belonging to these charities are protected from further
misconduct by Paddle8.”

Included as defendants are former Paddle8 CEO Valentine Uhovski,
financial controller Rameshkumar Ganeshan, and director of
operations Michael McClellan.

A source familiar with the situation told Artnet News on the
condition of anonymity that Uhovski, who was appointed CEO in
November, resigned in mid-February. Uhovski’s
predecessor, Izabela Depczyk, also resigned as CEO after
two years in December.

“Valentine’s tenure as CEO at Paddle8 was extremely short
lived,” a spokesperson for Paddle8 told Artnet News. “This recent
change in leadership has caused some disruption and the company is
addressing these problems individually. Some have apparently risen
to the level of dispute, but the company expects to resolve all of
these situations quickly and amicably.”

Word appears to be spreading that Paddle8 has not kept up on
other debts as well. Artist Elliot Arkin told Artnet News that
although he was promptly paid for a consignment of his work after
an auction in November, a fellow artist told him that he was not
paid for his own sale, and that a second lawsuit was expected to
soon be filed.

This was the fourth time the New American Cinema Group had
enlisted Paddle8 for a charity auction, having held three prior
sales where it received the proceeds within one month of the
auction. However, this time around, after four months passed, the
organization inquired as to when it could expect the proceeds and
was assured “payment would be made shortly,” according to the
complaint.

The amount owed to the New American Cinema Group is not
specified in the complaint but is said to be under $30,000 and in
the five figures, according to a source familiar with the case.

In late February, representatives of the non-profit went to
Paddle8’s offices in Manhattan to demand payment. Paddle8’s Michael
McClellan allegedly suggested that the company would take out a
loan to make the payment. (Artnet News has learned that McClellan
has also since left the company.)

“Our goal for this auction was to finance our climate-controlled
cooling system that’s installed in our film archive, and which is
vital for maintaining our 5,000-plus films, which date from 1917 to
the present day,” said New American Cinema Group director MM Serra
in a statement. “These funds are necessary for the continued
survival, and distribution of, this vast archive of avant-garde
film titles.”

Serra added: “I am deeply concerned that these vital funds for
our non-profit have been misappropriated.

The post A Nonprofit Founded by Jonas Mekas Is Suing Online
Auctioneer Paddle8 for Allegedly Failing to Hand Over the Proceeds
From a Charity Auction appeared first on artnet
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