Ann Freedman, former Knoedler Gallery president and director, and Michael Hammer, owner of Knoedler and its parent company 8-31 Holdings, had been due to take the stand when the Manhattan District Court judge recessed the trial “due to unexpected developments.”
On Sunday, (7 February) Freedman reached a settlement for an unknown sum with Domenico and Eleanore De Sole over their $25 million (£17 million) claim against the gallery for selling them a counterfeit Mark Rothko painting in 2004. The trial against Knoedler and 8-31 was due to continue this week.
Speculation is rife among journalists that the sudden halt to court proceedings on Tuesday indicates that a settlement is being negotiated between Knoedler, 8-31 and the De Soles. Knoedler’s lawyer suggested the recess was due to a scheduling conflict while the lawyer for Freedman said he did not know why the jury had been sent home. The De Sole’s lawyer offered no comment.
Prior to the recess, the De Sole’s lawyer questioned Knoedler and 8-31’s chief financial officer, Ruth Blankschen, over her involvement in the forgery scandal that led to the gallery’s closure in 2011. Blankschen told the court that profits from the sale of forged artworks had enabled Hammer to purchase company cars including a $520,000 (£358,000) Mercedes-Benz for his own use and a $482,000 (£332,000) Rolls Royce.
Other expenses included a $10,000 (£7,000) trip to Paris for his wife, Dru Ann Hammer, which was charged to an American Express credit card in Knoedler’s name.
Blankschen testified that she paid Long Island art dealer Glafira Rosales $9,000 (£6,000) in an envelope for each fake work she supplied the gallery with. Rosales commissioned the fake works from Chinese artist Pei-Shen Qian who painted them in his garage in Queens. The payment was just short of the USA Internal Revenue Service limit according to which any cash transaction over $10,000 (£7,000) must be reported.
The trial was due to recommence this morning (10 February) at 9:30am.