Six degrees of Mark Rothko and Bernie Madoff
In 1970, when Mark Rothko committed suicide, he left behind no note, just large, gorgeous, completely unique paintings.
Soon after, in a highly-publicized lawsuit, Rothko’s two young children sued the three executors of the estate and succeeded in having them removed from their posts due to conflict of interest. The executors sold the paintings for less than their true value to the Marlborough Gallery. One of the three executors was the owner of Marlborough. In addition to being removed as executor, he was fined approximately $9 million for both selling as a representative of the estate and buying as the owner of the Gallery, at prices less than their true worth, and then allegedly splitting the difference with his co-executors and granting himself years to pay at no interest.
Fast forward to Mark Rothko paintings, August 2009, when a disgraced financial advisor does a little Rothko business of his own. J. Ezra Merkin lost an alleged $2.4 billion of his clients’ money by farming it out to Madoff. With his assets frozen while under investigation by Andrew Cuomo, Merkin has sold his considerable Rothko collection to an unknown buyer through retired art dealer Ben Heller, who put the collection together for Merkin years ago:
Aug. 14 (Bloomberg) — J. Ezra Merkin, whose Ascot Partners LP invested billions with convicted Ponzi schemer Bernard Madoff, sold his Mark Rothko-packed art collection for $310 million last month to a still-unknown buyer, according to court filings.
The sale generated $37.5 million in fees and left art dealers also puzzling over the identity of Merkin’s agent, named in court documents as “TLIA, LLC.”
That mysterious entity received $26.5 million for its role in the transaction.
Heller, the no-longer “mysterious” agent, is married to the mother of “The Closer” star Kyra Sedgewick. Kyra Sedgewick is married to Kevin Bacon. All are victims of Madoff:
In an interview earlier this year, Heller told Bloomberg News that he is among Madoff’s victims, having lost $3.4 million in a charitable trust and over $10 million in personal funds.
The sale was approved by New York State Attorney General Andrew Cuomo, who froze Merkin’s assets and is suing him for concealing his $2.4 billion investment with Madoff. If Cuomo wins, funds from the art sale will go toward recouping investor losses. The sale produced $191 million, after fees, taxes and legal expenses, to be held in escrow.
The visual arts have become so outrageously priced and traded that even best practices rival the trappings of our banking system and brokerage houses, and investors have taken over the asylum.
Art brings out the very best, and the very tragic, in its creators. And apparently, it inspires the rest of the deadly sins in its collectors.
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- Merkin Reaches Accord With Cuomo on Art Sale (nytimes.com)
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