Sometimes you start writing an article with an assumption that rapidly collapses. That happened with this Artnet Magazine article on the Steve Wynn vs Lloyds Lawsuit, over Picasso’s “Le Reve.” To recap, Wynn is suing Lloyds for $54 million, the difference between $139 million, (the sum that hedge-fund king Steve Cohen agreed to pay for it September 19) and $85 million (what Wynn says it’s worth after he put his elbow through it 24 hours later, despite a $90,500 restoration.)
Usually such cases hinge on both sides debating the damaged piece’s value both before and after the accident. So I assumed that Lloyd’s would contest the $139M, because that was arguably not Le Reve’s “fair market value’ at the time of the accident, just what Cohen had agreed to pay. So I was hoping this case would start a courtroom battle (and an artworld discussion) on the distortional market effect of hedge-fund guys like Cohen and Ken Griffin, who are bringing a whole new definition to “money is no object.” But that discussion will have to wait, since Lloyds is apparently unwilling to contest that price, which would force it to pit an after-the-fact estimate versus a signed contract.
On a side note, the opportunity for insurance fraud in such an environment seems huge: All it takes is for two buddies to set up an absurd deal and create a huge “valuation,” then “accidentally” damage the work. The owner gets to keep the painting and get a huge payout, which he can share with his partner in crime. Nota bene to Wynn and Cohen’s lawyers: I’m talking about the problematic precedent this sets, not what actually happened with Le Reve. It does not require the sending of sternly worded warning letters.