Knoedler gallery collapse (2011)

At the end of November 2011, the Knoedler gallery, opened in New York in 1846 and one of the oldest in the country, closed overnight. For some fifteen years, a dealer, Glafira Rosales, had brought it about forty canvases presented as unknown works by Rothko, Pollock and Motherwell, said to come from an anonymous collector. They had been painted in a garage in Queens. The gallery resold them for about 80 million dollars. The suit brought by Domenico De Sole, who had paid 8.3 million for a 'Rothko', settled in February 2016, in the middle of trial. For the insurance market, the case moves the loss elsewhere. The buyer lost nothing physical: the canvas is intact, the attribution is what collapses, and the fine art policy, which excludes authenticity, does not pay. Recovery therefore targets the seller, under the authenticity warranty given in the invoice or implied, and for professional fault. On the dealer's side, a gallery's professional liability policy covers a misattribution made in good faith, within its per-claim limit and annual aggregate; it nearly always excludes fraud or knowledge of the fake, and the insurer then argues that the dealer could not have ignored provenance that thin. Forty claims over the same supplier can also be handled as a single serial loss, under one limit. The title and authenticity covers some collectors buy grew out of files like this one. Not to be confused with the Beltracchi affair, where the forger made up the provenance of the works himself, with no major gallery at the center of the circuit.