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An Old Master in Ruins

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Salander hoped to sell Apollo the Lute Player for $100 million—a direct challenge to works like Jeff Koons’s Hanging Heart, which was sold by Sotheby’s last November for over $23 million.  

As for the dealer in Salander, he couldn’t imagine how the market wouldn’t come around and follow his lead up Calvary. “I don’t think you need an M.B.A. from Wharton to understand this,” Salander tells me. “You have the greatest art in the world. A Donatello for sale. A Donatello? I couldn’t believe it. Parmigianino? The guy died when he was 37 years old. There aren’t a lot of pictures by this guy. And it’s less expensive. When Francis Bacon is $75 million, Parmigianino looks pretty cheap at $10–12 million.”

A Parmigianino may be comparatively inexpensive in today’s art market, but at $10 million or $12 million, it is far from cheap. Salander needed money to buy his art, and more money to hold on to it while he developed new buyers. He says he had a seven-year plan. “It wasn’t going to be producing money until towards the end of this thing,” he says, “because I was more interested in building the market for the big hit at the end.” So Salander took out a $19 million mortgage on his home and used the revenue to buy more art.

Then, in 2006, looking to end his money problems, Salander made a fateful decision, enlisting as a silent business partner a family friend named Donald Schupak. (Their daughters were friends from Dalton.) Schupak in turn brought in a Las Vegas casino owner named Jack Binion. Son of alleged crime boss Benny Binion, Jack had pioneered the World Series of Poker at his family’s Horseshoe casino and had developed interests in riverboat gambling.

As Salander describes it, Schupak lined up $10 million in financing from Binion and nearly another $5 million from additional sources. In mid-April 2006, Salander, Schupak, and the other partners formed Renaissance Art Investors, Inc. As part of the deal, Salander says he sold half-shares of $30 million of the gallery’s old-master and Renaissance art for an approximate $15 million payout from RAI. Still, the infusion of cash would not be enough to cover his mounting debts. He was sinking deeper into trouble.

Art galleries are largely unregulated businesses, and artists rarely file commercial documents to secure their loans to dealers, so until their day in court it’s impossible to know whether— or if so, just how severely—Salander defrauded his clients. Since the 71st Street gallery opened in 2005, dozens of artists, estates, collectors, and investors have come forward with serious allegations: that Salander withheld money he owed them; that he sold work he did not own; that he sold work whose provenance was misrepresented; and that he amassed over $100 million in debt from these schemes to float his old-master plans.

“These great sculptures. Donatellos. And Luca della Robbias. And the idea I could have this stuff!”

“The first clue I had that something was wrong,” says Lance Esplund, the chief art critic for the New York Sun, “was when I was trying to get paid for a catalogue essay I had written in 2006. The accountant kept dodging me.” At the start of 2007, a sea of artists, estates, and creditors began to make claims against Salander and his gallery for unpaid goods and services, and for mishandling artists’ work. Earl Davis, the son of the artist Stuart Davis, sued Salander for selling nearly 50 of his father’s paintings without remuneration, or even his consent. (De Niro would later claim that Salander had tried to unload paintings by his father to a gallery in Rome.)

The tennis star John McEnroe sued Salander for not delivering payment on an investment. Paul Rosenberg & Company, Salander’s former landlord at 79th Street, sued Salander-O’Reilly for up to $1.6 million in back rent and other debts.

It’s not that Salander did not have assets at that time—he admits he was continuing to buy up valuable work—he just did not have the cash (or perhaps the inclination) to pay everyone as money came in. Or as Joe Saracheck, the court-approved restructuring officer overseeing the bankrupted gallery, explains it, “The art business is much like the diamond business, but unlike diamonds, you cannot just liquidate art.”

By last summer, the lawsuits were showing up in the trade press, which in turn encouraged more creditors to come forward. In the month of August alone, Salander’s longtime partner Myron Kunin claimed in court that his “trust and confidence has been betrayed” by Salander for defaulting on the $7 million purchase of a Georgia O’Keeffe painting. Arthur Carter, the former New York Observer publisher who had exhibited his sculptures with Salander, filed suit for $1.2 million against the gallery for loans gone bad. The dealer Stanley Moss was awarded a $1 million judgment against Salander for outstanding payments on purchases. Roy Lennox, a managing director at the hedge-fund company Caxton Associates, sued Salander for $4.6 million and an additional $10 million in punitive damages, accusing him, among other things, of attempting to settle debts by passing off art with dubious attribution. Salander’s colleagues at the gallery quickly made for the exits.


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