News

‘Portuguese Saatchi’ in hot water over alleged €1bn debt

Three Portuguese banks have filed a lawsuit to recover funds from Joe Berardo, whose vast collection on show in Lisbon is one of the most visited in Portugal

José Berardo has been sued by three banks © Pedro Vilela

The vast modern and contemporary art collection of José "Joe" Berardo, the Madeira-born collector once dubbed the “Portuguese Saatchi”, is at stake after three Portuguese banks filed a lawsuit to recover debts from the businessman totalling almost €1bn.

Berardo’s 900-strong collection—comprising major works by Pablo Picasso, Nan Goldin and Francis Bacon—is on show at the Centro Cultural de Belém in Lisbon as part of a private-public partnership with the Portuguese government. It is one of the most visited museums in Portugal.

In April, three banks filed a lawsuit to recover debts from the entrepreneur totalling €962m. The banks—Caixa Geral de Depósitos (CGD), Novo Banco and BCP—had previously tried to seize a portion of Berardo’s collection after he allegedly defaulted on repayments.

The recent controversy prompted the Portuguese parliament to hold an inquiry that involved summoning Berardo to an open question session. In the hearing on 10 May, the businessman insisted that he “has no debts” and stressed that his only capital asset is a garage in Funchal, Madeira. His comments enflamed the Portuguese Prime Minister António Costa who was “shocked” by the entrepreneur’s attitude, according to local reports.

Berardo, who is the chairman of the holding company Metalgest, began taking out loans in the late 2000s; the bank CGD lent the entrepreneur around €400m (€350m to the José Berardo Foundation and €50m to Metalgest).

The three banks began legal proceedings in 2017 in a bid to seize 75% of Berardo’s collection, which was pledged as collateral. The art holdings are owned and managed by a company known as the Berardo Collection Association.

After the proceedings stalled, all parties tried to reach an agreement in January but the negotiations broke down. The latest lawsuit filed in April seeking €962m names José Berardo and three associated companies: the José Berardo Foundation, Metalgest—Sociedade de Gestão, Sgps, SA and Moagens Associadas, SA. “The legal strategy is to prove that Berardo is the beneficiary of the associated companies [and therefore liable],” according to the local news website Expatica. It is unclear if the banks will pursue Berardo’s collection under the new lawsuit.

Berardo’s lawyer, André Gomes, did not respond to requests for comment. CGD also declined to comment. A spokesman for BCP says that the bank does not comment on matters involving customer relationships.

Meanwhile, the Portuguese state is tied up in a deal with Berardo over his collection. In 2006, the businessman signed an agreement with the Portuguese government to loan art from his collection on a long-term basis to the Belém Cultural Center in Lisbon; the section of the building housing the works is known as the Museu Coleção Berardo, one of the most visited museums in Portugal.

The deal was renewed in 2017 giving the Portuguese government the option to purchase works from the collection until the agreements ends in late 2022. “While this contract is still in force, the Berardo Collection Association may not sell cultural goods,” the Portuguese Ministry of Culture says in a statement. The government subsequently pays a subsidy to the Berardo Foundation, which goes towards operational expenses at the Museu Coleção Berardo. The culture ministry declined to comment further.

Appeared in The Art Newspaper, 313 June 2019