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Art title insurance addresses one of the most pressing issues facing the art world.  The application and underwriting process is timely, straightforward and efficient:  the auction house conducts its research, ARIS conducts an independent review, the client is quoted the premium cost, and the policy is issued in favor of the seller, the buyer or both.  Title insurance increases the liquidity and value of art in the marketplace because policies eliminate doubt and exposure to title claims.

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Posted with permission from ARIS Corporation.

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Beware of "fortune cookies" for advice, even when it's not the kind you crack, read, and eat. Just ask Najung Seung, who claims that Mary Dinaburg, a partner at gallery Fortune Cookie Projects, duped her into buying a Julian Schnabel painting entitled Chinkzee for a price three times its market value.  Initially, Seung paid Dinaburg $118,000 for a John Wesley painting entitled Bulls and Bed, only to discover that Dinaburg had sold the painting to someone else.  Rather than returning the payment, Dinaburg offered Seung a $200,000 credit towards the purchase of Chinkzee at the "gallery" price of $380,000, and further represented the painting was worth at least $500,000.  But Seung soon learned that Chinkzee had been sold months earlier at an auction for $156,000 based on an estimate price range of only $60,000 to $80,000, and that the market value was no more than $110,000.  As a result, Seung filed suit against Fortune Cookie Projects, seeking the return of her money based on fraud, negligent misrepresentation, promissory estoppel, and unjust enrichment.
 

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Harvard Law School recently announced the formation of the Harvard Journal of Sports and Entertainment Law (“JSEL”). JSEL will provide the academic community, the sports and entertainment industries, and the broader legal profession with scholarly analysis and research related to the legal aspects of the sports and entertainment communities.
 

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In 2001, the European Parliament passed Directive 2001/84/EG, which requires all EU Member States to incorporate a so called “Droit de Suite” into their respective national copyright law codes by December 31, 2009. A key goal of the Directive is to eliminate competitive barriers that existed in the contemporary and modern art market between Member States whose respective copyright laws had codified Droit de Suite decades ago (e.g.. France and Germany), and Member States whose respective copyright laws were silent on the principle (e.g. Great Britain, Austria, and the Netherlands).
 

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For over 200 years, $500 million in gold and silver cargo sat undisturbed on a seabed off the coast of Portugal. Then, in May of 2007, Florida-based Odyssey Marine Exploration announced the discovery of a vast treasure at an undisclosed location it called "the Black Swan." Within weeks, Spanish officials identified the Swan as the Spanish colonial-era galleon "Nuestra Señora de las Mercedes," declared her treasure to be the rightful property of the Spanish people, and demanded that Odyssey reveal its secret location. Now, two centuries after British cannon fire left the Mercedes "breaking like an egg, dumping her yolk into the deep," the Spanish warship has found herself at the center of another battle—exposing the fragile relationship between maritime law and cultural heritage protections.
 

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Last year's Presidential election was historic on many accounts. Both campaigns saw an unprecedented turnout, as Americans from all walks of life came out in record numbers in support to their candidate of choice. Controversial artist Shepard Fairey, whose work includes "street art, commercial art and design, as well as fine art seen in galleries and museums all over the world,” was one of these Americans. (Complaint, Fairey v. The Associated Press, 09-cv-01123, U.S. District Court, Southern District of New York, at ¶ 9).  Fairey's "Hope" and "Progress" posters depicting President Barack Obama became symbols of the Obama campaign and its grassroots support. The image became a familiar sight on the morning commute, adorning cars' bumpers and back windows. A special version of the poster was created for President Obama's inauguration and another version of Fairey's Obama work now hangs in the Smithsonian Institution's National Portrait Gallery in Washington DC.
 

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“Defective art” is buzzing up the art scene, but not in that postmodern kind of way. This time, it’s not so cool. For instance, director Steven Spielberg recently dealt with defective title when he discovered that his Norman Rockwell painting, the Russian Schoolroom, had been stolen from a Missouri gallery 16 years earlier. Spielberg has since returned the painting to the FBI, where it sits in custody battle between two other alleged owners. Casino magnate Steve Wynn, on the other hand, accidentally poked the tip of his elbow into his 75-year old Picasso painting, La Reve, leaving the work in defective condition. Wynn had originally struck a deal to sell the painting for a record sum, but is now in court disputing issues concerning loss of value.
 

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Museum collections have long tantalized would-be buyers and dealers of fine art. With most museums displaying a third or less of their collections at any given time - before it moved into its new building in 2004, the Museum of Modern Art was able to display only 10 percent of its magnificent collection - there's a lot of beautiful and valuable art that's not often seen by private collectors or the general public.
 

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Charitable donations of artwork can give rise to substantial tax benefits, but donors need to be aware that not all donations are treated equally for tax purposes.

Many donors are not aware that the use to which the recipient organization puts the art will impact the amount of the charitable deduction the donor receives. Most donors assume that the deduction will be equal to the fair market value of the artwork at the time of the contribution (subject to certain limitations based on the donor's adjusted gross income). This is the case, however, only if the artwork is related to the exempt purpose of the charitable organization. If it is not, then the amount of the deduction is reduced by the amount of gain that would have been long-term capital gain had the donor sold the property at its fair market value when it was contributed. In other words, the amount of the charitable deduction will be limited to the donor's basis in the artwork (i.e. what he or she paid for it) rather than the artwork's fair market value. For donors who have held artwork for a long period of time, this difference can be substantial.
 

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