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Paddle 8 Bankruptcy a Harbinger in the Time of COVID19 and the Coming Art World Crisis

Posted by Nicholas O'Donnell on March 24, 2020 at 8:59 AM

Early last week the online auctioneer Paddle 8 filed for Chapter 11 bankruptcy in the Southern District of New York, on the heels of a recent lawsuit demanding payment for works of art sold at a charitable auction last November. While the Paddle 8 bankruptcy seems to have been driven by business conditions long before the complete upheaval of the art and business world due to COVID19, it is all but certain now that the cascading closures of businesses large and small for the foreseeable future will bring a wave of bankruptcies in the months and year to come. As such, taking a closer look at the Paddle 8 situation can be instructive for art market participants of all sorts, particularly with respect to the consignment and sale of art. Put simply, most businesses are going to need to think very soon about their roles as creditors who are owed some good or service, in the hopes of avoiding becoming debtors who need the help of bankruptcy laws to reorganize or stave off liquidation.

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Topics: Bankruptcy, Bankruptcy Code, Bankruptcy Court, consignor, U.C.C.-1 statement, New York Arts & Cultural Affairs Law, Salander O'Reilly, ArtNet, Force majeure, coronavirus, COVID-19, Chapter 11, Paddle 8, Auctionata AG, online auction, Tom Otterness, Valentine Uhovski, Rameshkumar Ganeshan, 11 U.S.C. § 541(b)(1), 11 U.S.C. § 362(a), Penumbra, G.L. c. 104A, § 2, John Ahearn, Kiki Smith, Jonas Mekas, Jim Jarmusch, Walter Robinson, Michael McClellan, security interest, N.Y. Arts & Cult. Affairs Law § 12.01, automatic stay, Acts of God, Paper Chase

Richard Prince, Social Media and the Public Domain: Reports of Copyright’s Demise are Premature

Posted by Nicholas O'Donnell on May 29, 2015 at 6:15 AM

Reactions to the Richard Prince Instagram story continue to filter in, and highlight the perpetual confusion between what is publicly available and what is in the public domain. They are not the same thing, with important legal consequences.

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Topics: Richard Prince, Missy, Copyright Act, Prince v. Cariou, Canal Zone, Patrick Cariou, Suicide Girls, vulture.com, Yes Rasta, 17 U.S.C. § 107, Jerry Saltz, Instagram, Copyright, transformativeness, Fair Use, ArtNet, New York Magazine, § 107

Kunstmuseum Bern Blames Gurlitt Restitution Delay on Will Contest, Claimants Are Having None of it

Posted by Nicholas O'Donnell on February 18, 2015 at 8:04 AM

We recently discussed how the will contest concerning the will in which Cornelius Gurlitt left his estate to the Kunstmuseum Bern was complicating efforts to restitute any Nazi-looted works within the collection. Since the will contest, in and it itself, certainly seemed plausible, the resulting effect it could have on returning questionable works was not hard to see.

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Topics: Uta Werner, Max Liebermann, Gurlitt Collection, Seated Woman, Two Riders on the Beach, Matisse, Carl Spitweg, Gurlitt, Breslau David Toren, Art Recovery International, Kunstmuseum Bern, Henri Henrichsen, Christopher Marinello, David Friedmann, ArtNet, Paul Rosenberg

New Graffiti Copyright Lawsuit Continues Growing Trend

Posted by Nicholas O'Donnell on January 28, 2015 at 7:54 AM

News came last week that another lawsuit has been filed over allegations of misappropriation of graffiti images. In this case, as summarized nicely by Cait Munro on ArtNet (I haven’t seen the complaint yet), graffiti artist Craig Anthony Miller:

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Topics: Craig Anthony Miller, "Elephant Mural", Graffiti Art, Visual Artists Rights Act, VARA, Toll Brothers, Copyright, 5Pointz, Cait Munro, ArtNet

Sponsor Plans to Reintroduce Resale Royalty Rights, Old Contract Idea Resurfaces as Alternate Solution

Posted by Nicholas O'Donnell on January 14, 2015 at 11:55 AM

After word got around that the American Royalties Too Act of 2014 had expired, (covered by Whitney Kimball at ArtFCity, Coline Milliard at ArtNet here, and Jillian Steinhauer at Hyperallergic here), the natural question of course remains, “what’s next.” Steinhauser spoke to John Doty, director of Jerrold Nadler’s office. Doty said, “Congressman Nadler does plan to reintroduce the bill this Congress. An exact date and exact bill language have not yet been decided.

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Topics: Resale Royalty Rights, Resale Royalties, Coline Milliard, Hyperallergic, Moral Rights, Kibum Kim, Whitney Kimball, art, ArtFCity, Jerrold Nadler, Jillian Steinhauer, The Contract, Copyright, Seth Sieglaub, John Doty, ArtNet, Robert Projanksy, American Royalties Too Act of 2014, Artist’s Reserved Rights Transfer and Sale Agreeme

Changes in U.S. Law Regarding Cuba Will Affect the Arts

Posted by Nicholas O'Donnell on December 19, 2014 at 5:39 AM

This week’s biggest news story (apart from Above the Law’s Awesome Law Blogs of 2014) is the historic reopening of diplomatic relations between the United States and Cuba after more than fifty years. Like a coda to the end of the Cold War, we all found ourselves watching the President of the United States describing how there will once again be a U.S. embassy in Cuba. For those of us who have not been alive as long as diplomatic ties have been severed and the Castro regime has been in place, it was a remarkable sight indeed.

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Topics: Castro, Sudan, Gabriela Rangel, Auctions, U.S. Treasury’s Office of Foreign Assets Control, President of the United States, OFAC, Above the Law, Congress, Art Basel Miami Beach, North Korea, economic embargo of Cuba, Galleries, Wall Street Journal, President Obama, Art Fairs, State Sponsor of Terrorism List, Cuban peso, the Americas Society, 12 Awesome Law Blogs of 2014, Iran, ArtNet, Syria, Foreign Affairs, Art Law Report, State Department, Cuba, Cold War

Appellate Ruling Bolsters Role of Fractional Interests in Estate Planning

Posted by Nicholas O'Donnell on October 1, 2014 at 4:56 AM

The Fifth Circuit Court of Appeals has overturned a Tax Court decision in a ruling that has major implications for estate planning and works of art. While the central basis for the decision in favor of the Estate of James Elkins was the inexplicable failure by the IRS to rebut the taxpayer’s evidence, the decision nonetheless offers guidance for an important estate planning tool: fractional interests. Eileen Kinsella has also analyzed the case at Art Net (I’m quoted) here.

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Topics: estate tax, Estate of James Elkins, fractional interest, Eileen Kinsella, GRIT, Tax Court, 5th Circuit Court of Appeals, Court of Federal Claims, Estate Planning, ArtNet, Grantor Retained Income Trust, Tax, Elkins

Audio Now Available of “Art Fairs: An Irresistible Force In The Art World?” at Sotheby’s Institute

Posted by Nicholas O'Donnell on July 28, 2014 at 6:27 AM

I took part in a panel discussion at the Sotheby’s Institute on May 27, 2014 entitled “Art Fairs: An Irresistible Force In The Art World?”

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Topics: Eileen Kinsella, Entertainment Arts & Sports Law Section, Kristina Nazarevskaia, Richard, Elizabeth Dee, Events, Edward Winkleman, Art Fairs, Indpendent, New York State Bar Association, Judith B. Prowda, galleryIntell, John Haber, Nicholas M. O'Donnell, ArtNet

Reactions and Reviews of “Art Fairs: An Irresistible Force In The Art World?” At Sotheby’s Institute Last Week

Posted by Nicholas O'Donnell on June 2, 2014 at 6:03 AM

I took part in last week’s panel discussion at the Sotheby’s Institute entitled “Art Fairs: An Irresistible Force In The Art World?” Moderated by Judith Prowda, the panel was comprised of Edward Winkleman, Elizabeth Dee, Richard Lehun, and me. We reviewed the financial, practical, ethical, and legal effects that the expansion of art fairs has had on the trade.

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Topics: Eileen Kinsella, Sotheby’s Institute of Art, Entertainment Arts & Sports Law Section, Kristina Nazarevskaia, Richard Lehun, Elizabeth Dee, Sullivan & Worcester LLP, Stropheus Art Law, Events, Edward Winkleman, Art Fairs, Indpendent, New York State Bar Association, Judith B. Prowda, galleryIntell, Nicholas M. O'Donnell, ArtNet

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About the Blog


The Art Law Report provides timely updates and commentary on legal issues in the museum and visual arts communities. It is authored by Nicholas M. O'Donnell, partner in our Art & Museum Law Practice.

The material on this site is for general information only and is not legal advice. No liability is accepted for any loss or damage which may result from reliance on it. Always consult a qualified lawyer about a specific legal problem.

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