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Former Knoedler boss Freedman will ‘tell her story’ in court

Judge dismisses attempts to throw out lawsuits and orders trial over fake Abstract Expressionists

The next chapter in one of the art world’s biggest scandals will begin on 25 January, when the once irreproachable Knoedler Gallery and its former director Ann Freedman stand trial in two lawsuits that allege they knowingly sold fake paintings.

The trial was ordered by judge Paul Gardephe in October when he denied motions by Knoedler and Freedman to throw the lawsuits out. He said there was “ample” evidence that Freedman “understood that the [paintings] were not authentic”. The cases have been brought by collector John Howard and Sotheby’s chairman Domenico De Sole and his wife, Eleanore.

Knoedler and Freedman deny wrongdoing, as does gallery owner and co-defendant 8-31 Holdings. The judge dismissed all claims against 8-31 head Michael Hammer and former employee Jaime Andrade.

Knoedler and Freedman did not dispute making misrepresentations about the fakes, Gardephe said, but they argued they were not liable because they had believed the works to be genuine. They said they had been duped by the art dealer Glafira Rosales, who offered 32 fakes which she said had come from a “Mr X”. Knoedler, which closed in 2011, sold the bulk of them for around $60m. Rosales pleaded guilty to tax evasion and money laundering in 2013.

Gardephe decided that Freedman’s supposed ignorance was contradicted by “fabricated stories of provenance, which shifted dramatically”; Rosales’ willingness to repeatedly sell “masterworks” to Knoedler “for a fraction of their value”; her refusal to sign a statement that the paintings were authentic; “absence of any documentation”; and a 2003 report by the International Foundation for Art Research (Ifar) rejecting the provenance and questioning the authenticity of a work by Jackson Pollock. “Defendants nonetheless continued to sell the Rosales paintings,” Gardephe pointed out.

Gardephe considered that Freedman’s reliance on experts who she said thought the works to be genuine was “exaggerated”. In pre-trial proceedings, he said that “many experts” had testified that “they did not make a statement as to any work’s authenticity”.

Freedman’s lawyer, Luke Nikas, says: “This case is about integrity, and as much as we may respectfully disagree with the decision, it has an important silver lining: Ann Freedman will now have the full opportunity to tell her story and prove her good faith.”

‘Buyer beware’ always applies, but collectors have legal recourse As experts shy away from giving opinions and authentication boards close down, the old adage caveat emptor has never been more freely applied to the art market: buyers should beware. But the October ruling by federal court judge Paul Gardephe suggests that collectors have legal recourse if they are duped.

The defendants in the Knoedler lawsuits argued that the collectors who had unwittingly bought faked works from the gallery had no business relying on what then director Ann Freedman told them. Their lawyers contended that the collectors were sophisticated people who, with minimal probing, could have learned the truth.

But Gardephe, citing a months-long investigation by the International Foundation for Art Research (Ifar) into a painting by Jackson Pollock, said that discovering the truth would have required an “extraordinary effort” that is not demanded by the law.

The collectors argued that their reliance on Freedman was justified because of Knoedler’s prestige. Gardephe found a jury could agree: “Knoedler’s sterling reputation lent credibility to Freedman’s assertions… Plaintiffs do not operate art galleries… they are consumers who relied on representations made by one of the most reputable and most established galleries in New York City.”