Gagosian Gallery Faces Two Lawsuits Over Non-Delivery of Koons Statues

7 Min Read By: Katherine J. Kim

There is a very tiny world out there in which people pay millions of dollars in advance payments for “factory-manufactured” balloon animal stainless steel sculptures—some in the shape of Greek and Roman goddesses—only to be told by “sales and contract performance drones” that there would be years of delay due to “the high volume of data” from “numerous scans of balloons,” along with technical difficulties in “reverse engineering” and “Computer-Aided Design processes (known as ‘CAD’).” This world—rich, strange— is detailed in Steven Tananbaum’s filed on April 19 in New York County court against the Gagosian Gallery and artist Jeff Koons. Eight days later, on April 27, Hollywood producer Joel Silver filed a similar referencing Tananbaum’s complaint.

Tananbaum alleges breach of contract and violations of New York UCC §2-609 (Right to adequate assurances) and Article 15 of New York’s Arts and Cultural Affairs Law, specifically   which is meant to protect art buyers of sculptures. According to Tananbaum, the world of Gagosian features “unadorned avarice and conspiratorial actions in connection with factory-manufactured industrial products called Jeff Koons sculptures,” all run by a “well-oiled machine” that “exploit[s] art collectors’ desire to own Jeff Koons sculptures.” And underneath it all lies a “fraudulent financial routine that harkens the name Ponzi.”

Gagosian Gallery is the largest art gallery in the world, a complex economic and cultural entity whose workings are central to the complaints. There are 16 locations globally and several hundred employees. It has its own private planes. Art galleries can purchase art directly from the artist and represent them to the public (i.e. primary market) or they can purchase art from entities other than the artist (i.e. secondary market): Gagsosian Gallery does it all. It represents living artists, artists’ estates and resells secondary market art. It clears about $1 billion in art sales each year while publishing about 40 books annually. When representing an artist, it is in the best interest of Gagosian, like any art gallery, to create buzz around the artist’s work; one way to create buzz and to sell to the global market is by attending art fairs. In 2000, there were 55 major art fairs around the world. Last year there were 260. A booth at Frieze art fair in New York City might cost $125,000 to rent for a weekend. With added on-site handling costs to build out the booth and shipping and handling costs of the art itself, a large gallery may need to sell hundreds of thousands of dollars of art just to break even.

Jeff Koons is the most commercially successful artist of all time; he has managed to create intrigue and interest for his balloon animal sculptures. In 2012, Koons’ stainless steel Tulips sold at Christie’s for $33,700,000.00—this was a record high for Koons, and the second highest auction price ever recorded for a living artist. Only one year later, in November 2013, his Balloon Dog (Orange) sculpture, which is a stainless-steel sculpture in the shape of a balloon animal that stands 121 inches tall, sold at Christie’s for a realized price of $58.4 million and became the record price at auction for a work of art by a living artist. Bottom line: Jeff Koons’ auction price high went from $33.7 million to $58.4 million in a single year.

The demand for Koons’ balloon animal sculptures has only increased. Last year, rapper and businessman Jay Z commissioned a 40-foot balloon dog from Koons to be on stage with him at the V-Festival in Weston Park, England. Koons has entered commercial deals with Google to design phone cases inspired by his Gazing Ball series, which involve generic classical Greek sculptures of plaster with a shiny blue glass sphere attached. Last year, with much fanfare, Louis Vuitton released a line of handbags designed by Koons called the “Masters Collection.” Each handbag was covered in one of a series of paintings by artists such as Rubens, Da Vinci, or Van Gogh; they could easily be mistaken for a bag at any museum gift shop.  They were priced at around $4000 and bore the LV monogram in one corner and a Koons monogram in another. This October, Louis Vuitton will release a second line of “Masters” designed by Koons—they feature the same concept, only with paintings of different artists like Turner and Monet. As Tananbaum’s complaint alleges, this is the commercial world of Jeff Koons and the gatekeeper is Gagosian Gallery.

In September 2013, Steven Tananbaum agreed to purchase Balloon Venus Hohlen Fels (Magenta) for $8 million from Gagosian Gallery with an estimated completion date of December 2015 and paid a deposit of $1.6 million. A few months later in early 2014, Joel Silver agreed to purchase Balloon Venus (Yellow) from Gagosian Gallery for $8 million with an estimated completion date of June 2017 and made a deposit of $1,600,000.00. In 2014 and early 2015, Tananbaum made additional payments totaling $3.2 million and Silver made additional payments totaling $2.2 million.  

In 2015 and 2016, both Tananbaum and Silver were periodically informed that the completion dates for their works would be pushed back a few months; later, they were informed the art would be delayed two years. During this time, Tananbaum made his third payment of $1.6 million and Silver did not make his two scheduled payments.

Then, despite the delayed delivery of the previous piece, in December 2016, Tananbaum agreed to purchase two more stainless steel balloon sculptures by Koons: Eros for $6 million with an estimated completion date of January 2019 and Diana (edition 3 of 3, an edition being part of a limited-run series) for $8.5 million with an estimated completion date of August 2019.Tananbaum made an additional deposit of $1.2 million for Eros. Regarding the Diana series, in January 2017, Gagosian gave Tananbaum an option to cancel after review of the first edition of Diana (which had a completion date of October 2018), and Tananbaum paid a deposit of $2.125 million for the third edition of Diana.

In January 2017, after learning that the completion date had been pushed back another two years to July 2019, Silver attempted to cancel the purchase and requested a refund. Gagosian counsel informed Silver that any more missed payments would result in a forfeit of payments already made. A was subsequently signed by Gagosian, Silver, and Koons. It included a new payment schedule for the remaining $4.8 million owed and a new completion date of December 2020.

By January 2018, Tananbaum had paid $4.8 million on the Balloon Venus agreement, $2.4 million on the Eros agreement and $4.25 million on the Diana agreement. It was at this time Tananbaum was informed that the new completion date for Balloon Venus would be August 2019 and for Eros would be October 2019. In February 2018, he was informed that Diana edition 1 would “not be ready this year.” In April 2018, Tananbaum filed the complaint. Around the same time, Joel Silver filed a similar complaint after his offer to make additional payments to an escrow account was rejected by Gagosian.  

When a work of art is on display or for sale, the year the work was completed is always shown next to information such as size and medium. For Jeff Koons’ balloon animal stainless steel sculptures, the completed date is instead usually a range of 6 to 8 years.  His “iconic” Play-Doh sculpture—which was on view at the Whitney Museum for the Koons retrospective in 2014 and is currently on view at the Rockefeller Center in advance of its auction date at Christie’s—took nearly twenty years to complete (1994-2012). Play-Doh is made of aluminum, stands at 11 feet tall, and resembles the leftovers of a Play-Doh project.

According to their complaints, Tananbaum and Silver asked for information about the foundry, fabricator, studio, photos, production schedules and any evidence that production had even started when learning of production delays. Neither received any photos nor specific information about production. Tananbaum’s complaint detailed a number of works—including one that was the subject of another lawsuit involving Gagosian—that were prioritized before Tananbaum’s. These actions and inactions may support Tananbaum’s NYUCC claims and both Tananbaum and Silver’s NYACAL claims. Defendants’ responses are due June 20, 2018 in the Tananbaum case.

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ABOUT THE AUTHOR

Chicago, IL

Katherine J. Kim

Katherine Kim is an intellectual property attorney in Chicago.  Her firm provides patent, trademark and copyright services to entrepreneurs, artists and small businesses.

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