With a trial looming, the Knoedler Gallery, its former director Ann Freedman, and Knoedler’s owner 8-31 Holdings have reached a settlement with the New York collector John Howard. Howard had bought a fake work by Willem de Kooning from the gallery for $4m. The lawsuit arose from Knoedler’s selling some $60m of fake Abstract Expressionist art in a scandal that sent shivers through the art world when it broke in late 2011.
The parties informed the court of the settlement by a letter delivered Wednesday afternoon (2 December). The terms of the settlement are confidential.
In October, the Manhattan federal judge Paul Gardephe issued an opinion denying the defendants’ motions to dismiss the case and ordered a trial to begin in January. In settling, the defendants skirted a potential liability of $12m—Howard alleged the defendants not only committed fraud but were also liable under the federal RICO law [Racketeer Influenced and Corrupt Organizations Act], which triples a plaintiff’s damages. Howard, for his part, avoided the difficult task of convincing a jury that the defendants committed fraud.
The forgery scandal entangled well-known collectors such as Jack Levy and prominent dealers such as Richard Feigen and Manny Silverman, who served as intermediaries. It also spawned ten lawsuits. Including Howard’s case, five of them have now settled. The trial of a sixth, brought by Sotheby’s chair Domenico De Sole and his wife, Eleanore, is scheduled to begin on 25 January.
“We are pleased to have resolved the case with Howard, and we feel very good about the upcoming De Sole trial,” says Freedman’s lawyer Luke Nikas. Attorneys for Howard and the Knoedler defendants have not yet responded to inquiries.
