Court makes decision in battle over Warhol estate

The Andy Warhol Foundation is appealing the case, which will be heard in October


New York

A New York surrogate’s court has reached a decision in the fierce protracted battle over the estate of Andy Warhol. In a windfall that might have brought a spark of emotion even to the face of the imperturbable Warhol, Judge Eve Preminger ruled that two lawyers who had represented the estate be awarded $7.2 million (£4.5 million), plus $250,000 in legal fees.

The case had been brought by Edward Hayes, who had represented the estate. His claim was disputed by the Andy Warhol Foundation for the Visual Arts, the estate’s main beneficiary.

Hayes was appointed the estate’s lawyer by Warhol protegé and the estate’s executor Fred Hughes the day after Warhol died in February 1987. Hughes is credited with astute management of Warhol’s business affairs in the last fifteen years of the artist’s life. Hayes had originally requested $12 million from the estate, based on a fee of 2% of the estate’s $600 million estimated worth. The Foundation had countered with Christie’s appraisal of the art in the estate at $95 million, and the value of the total estate at $220 million. The Foundation maintained that the sum of $4.85 million which Hayes had already received was adequate. (When the court began to examine this dispute, Fred Hughes changed sides. He agreed to accept the Foundation’s assessment of the estate’s value, in return for $5 million in cash and title to some Warhol paintings to which the foundation had claimed ownership. Hughes also agreed to fire Hayes as the estate’s counsel, and to take the Foundation’s side in court against Hayes.)

A year ago, after rejecting Christie’s evaluation, Judge Preminger set the value of the art at $390.9 million, and the fair market value of the estate at $509.9 million. The estate includes art by Warhol (some 700 paintings, 9,000 drawings, 19,000 prints and 66,000 photographs), as well as works by other artists, real estate and securities.

Hayes, a former prosecutor and street-wise criminal lawyer with no experience in trust and estate work before his hiring, was assisted by Francis Harvey, who will share 25% of the settlement.

“I never said I was the good fairy”, Hayes maintained. “I made a deal, I lived up to my end of the deal, I delivered”.

The judge in the case concurred. Preminger credited Hayes with presiding over the sales of Warhol’s art, negotiating the artist’s retrospective at the Museum of Modern Art, and “insuring Warhol’s status in the fickle and fluctuating art market”.

Preminger concluded that “as a result of [Hughes’s and Hayes’s] efforts, this estate not only survived but flourished in a turbulent market”.

Even though Hayes did not keep records of the time he spent on the Warhol estate and the court refused to recognise his deal with Hughes, the judge awarded his fee on the basis of several thousand hours spent on estate matters. One calculation, based on 3,000 hours, puts his hourly rate at $2,400, more than O.J. Simpson’s estimated per hour legal costs.

“I would tell you at a million dollars a year I’m cheap, compared to [Warhol Foundation President] Arch Gillies at $250,000 a year. If he costs you millions and I make you hundreds of millions, he’s expensive and I’m cheap”.

The cost of the litigation to the Warhol Foundation is estimated at some $4 million. The Foundation is appealing the case, which will be heard in October.

According to Peter Gates, a lawyer representing the Foundation, “Hayes may not be the good fairy, but he certainly lives in fairyland. The judge actually rejected his ‘deal’ as unfair and unenforceable. What the judge awarded him, while legally unsupportable in our view, was still less than half of what he was asking for. As for his ‘delivering’, he farmed out any real legal work needed by the estate to real lawyers: the estate paid approximately $5.2 million to more than thirty lawyers Hayes hired to do the work. Hayes never made the estate a dime. On the contrary, Fred Hughes made all the good decisions. The estate is still in litigation, paying for the mistakes Hayes committed in those few instances where he did anything. Of course, it’s impossible to tell what he did, since he kept no records”.

The dispute made by the Warhol Foundation might affect the institution’s ability to fund its philanthropic projects, on which the Foundation now spends some $1 million per year. Also, the foundation’s struggles may have affected the fortunes of the Andy Warhol Museum in Pittsburgh, which opened one year ago. The Warhol Museum’s director, Thomas Armstrong, quit earlier this year, well before meeting his goal of raising $20 million for the museum’s endowment. Armstrong’s fundraising job was compromised, sources say, by the wide attention given the bitter lawsuit over the estate.

In an attempt to forestall other misunderstandings, on 5 May the Foundation announced the formation of the Andy Warhol Art Authentication Committee, Inc., a corporation whose purpose is to examine works of art submitted for review and rule on their authenticity. Until the formation of this group, authentication was done by the foundation, principally by Vincent Fremont, the organisation’s sales agent. Now Fremont is joined on the committee by interior designer Jed Johnson, curator David Whitney, and art historians Neal Printz and George Frei, who are preparing Warhol’s catalogue raisonné.

The committee will choose among three possible opinions. It will either certify a work unanimously, or declare it not to be by Warhol, or if rifts prevail over the authenticity of a soup can or a Marilyn, a work will be consigned to a status that Warhol Foundation president Arch Gillies, evoking Tolkien, calls “the middle kingdom”.

Dealers agree that certification of Warhols is essential to their sale, although the Foundation assumes no liability for its judgement of a work. Fakes are proliferating, especially in Europe, says Andrew Terner, a private dealer in New York: “I cannot sell a painting without a certificate”. Many of those forgeries seem to be turning up in Italy, dealers say, and the works of Keith Haring and Jean Michel Basquiat are also prime targets for faking.

Originally appeared in The Art Newspaper as 'The lawyer always wins'