The Warhol estate undervalued, finds court

The judge’s ruling resolves the crux of the legal war between the foundation and the lawyer for Warhol’s estate


A judge has ruled that the Andy Warhol Foundation of the Visual Arts established in the artist’s memory had undervalued the art in Warhol’s estate. The paintings, prints, photographs and drawings are worth $390.9 million, instead of the some $95 million estimated by the Foundation, the court announced on 14 April. The fair-market value of Warhol’s entire estate, which included securities and real estate, was $509.9 million, judge Preminger of Manhattan Surrogate Court concludes, more than double the £220 million claimed by the foundation. The judge’s finding resolves the crux of the legal war between the foundation and the lawyer for Warhol’s estate, who has claimed that the foundation’s low estimate of the estate’s value has prevented him from receiving the fee he believes he deserves. Edward W. Hayes, the lawyer, sued the foundation for 2% of the estate’s value, a percentage which he says reflects the terms of his contract with the estate. To date, he has been paid $4.8 million. He is claiming an additional $12 million. Haye’s fee will be determined in a separate verdict. Also at issue is the method the foundation and its appraiser, Christie’s, used to reach the initial low figure. Christie’s applied a blockage discount, which valued the estate on the assumption that all the works would be sold at the same time, lowering the value of individual pieces. That approach estimated paintings at one- third of their value, the judges ruled, and the drawings, prints and photographs at one-eighth their worth. Haye’s expert witnesses valued the works based on prices reached at auction and in private sales. The Warhol estate contains more than 768 paintings, 19,000 prints, more than 66,000 photographs, and some 5,000 drawings. The judge also faulted the Warhol Foundation’s president, Archibald L. Gillies, for discussing future sales of works with Christie’s while the appraisal was being conducted. The verdict may have the unintended effect of broadening the Warhol Foundation’s philanthropic reach, since New York State law requires the foundation to distribute at least 5% of its assets to charity each year.

Originally appeared in The Art Newspaper as 'The Warhol estate: a bigger bottom line'