The trial between mega-collector Ron Perelman and a group of insurers began on Monday in New York Supreme Court, nearly seven years after a fire struck Perelman’s home in the Hamptons, costing him, per his argument, five paintings by Andy Warhol, Ed Ruscha, and Cy Twombly insured for a collective $400 million claim.
In his initial court filings, Perelman claimed that the insurers refused to honor his 2020 claim for coverage on the five works—two by Andy Warhol, two by Ed Ruscha, and one by Cy Twombly—that were in his East Hampton home known as the Creeks during a 2018 fire. The insurance companies have argued in their filings that the works had “not sustained any detectable damages.”
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Perelman’s lawyer C. Bryan Wilson argued on Monday that the policies issued by the insurance groups Lloyd’s of London Ltd, Chubb Ltd. and American International Group Inc allow the American businessman to “claim the full value the insurers agreed to pay for the works — many times their market value — even if there was nominal damage to them,” according to Bloomberg News.
Perelman has claimed that the fire robbed the works of their “oomph.
“All of the pictures lost their luster, lost their depth, lost some of their definition and lost a lot of their character,” he said in the complaint. This assessment has been reiterated in a court context by attorneys and experts hired by the collector during the years-long insurance investigation.
The collector’s legal defense added in his opening remarks that “it was effectively raining inside the house” as firefighters worked to control the flames, and the five works were relocated several times “on a cool, damp night and sat in high humidity for more than 12 hours”. Legal representation also noted that the insurers paid for more than 30 other artworks damaged by the same fire, many of which were held on the same floor as the contested artworks.
Justice Joel M. Cohen is overseeing the bench trial without a jury after issuing a summary judgement last May, stating there was a lack of clarity over whether or not the five works were actually damaged.
As ARTnews reported in 2024, the attorneys for the insurers showed evidence that Citadel founder Ken Griffin and mega-dealer Larry Gagosian, who works with both collectors, paid a visit to the Creeks in 2020 before the claim was filed on the five works. “That visit, the insurance companies have argued, is proof that Perelman lied during the investigation. After that visit, Griffin did in fact buy paintings from Perelman, one of which, Brice Marden’s Letter about Rocks #2, for $30 million, was in the same room as the Twombly and the two Warhols during the fire.”
Bloomberg News also noted that testimony from Griffin may be played at the trial, and could provide details on the current wealth of Perelman, who was once estimated to be the richest man in America. The court filings revealed Perelman sold 71 works for $963 million through Sotheby’s auctions and private sales between 2020 and 2022.
The sell-off occurred after the value of shares of Revlon Inc., which Perelman’s holding company had acquired for $1.74 billion in 1985, fell significantly due to the impact of the Covid-19 pandemic on global stock markets. According to reports, Perelman had been using those as collateral for loans, however a Deutsche Bank issued a margin call—a request for additional capital in a brokerage account—prompting the sale of the artworks.
Revlon filed for bankruptcy in 2022.
Jonathan Rosenberg, an attorney for the insurers, stated that Perelman filed the contested insurance claims for the five artworks when the art collector started having “serious financial difficulties”, noting the margin calls from lenders and the art sales.
The insurers described the lawsuit as a “money grab” by Perelman, challenging his assertion he never considered selling the five artworks. Griffin’s testimony is part of the evidence for the trial, and Bloomberg News noted that portions of the deposition by the Top 200 collector may be played in court.
The witnesses for the trial will include Perelman, chemist and fine art analyst Jennifer Maas, as well as conservator and engineer Marion Mecklenburg. The trial is expected to last three weeks.